Economics Of Doing Business In Thailand

[witold]

I just returned from a 2 month trip to Thailand.  I rented a motorcycle and essentially circumvented the country putting on about 15K kilometers going as far North as Mae Sai, as far West as Mae Sot, as far East as Nong Khai, and as far South as Betong.  I would ride into a city, find the city center, find a hotel, and stay for few days or leave if I didn't care for the place.

This was my first time in Thailand and one of the few surprises for me was the amount of farang-oriented/higher-end businesses that appear to be empty all day.  I would walk down a street lined with bars or restaurants or massage places in Chiang Mai for example, and they would all be virtually empty.  Sometimes they would have a few customers.  And this is during peak business hours!  

This really piqued my interest as I have finance background and I am interested in these sorts of things.  

Can you guys throw out some sample numbers for different businesses in different regions for me?  I know labor is dirt cheap, and it appears that leases are dirt cheap as well?  

If you have some interesting or mundane business stories to share I would love to hear those as well. 

[nakachalet]

hi witold

did u have a reasonably good time?

r u sure that u r in thailand..... lol

and not a word whether u liked the place....?

cheap labor? cheap lease?

it depends on who u talked to and what u were looking at? but generally, u r correct in ur assumption.

there are plenty of well wishers coming to thailand with limited amount of money to really do anything worthy of continuous business.

they just like many others before them seeing something profitable in thailand and thought they could do much much better, or at least as good and as efficiently as the others....

most forgot one major difference.... in thailand, china, india, malaysia etc. most businesses are run by proprietors, wife, minor wife or wives, sons, daughters, granfather-mohter, et cetera....

their businesses are very profitable.... and many businesses i personally know since whence.... have been in existence since early 1900....

fafangs like us.... can not afford to conduct business like that for sure....

another quick way to make money in tourist areas is beverages and foods.... just barely 2 months ago, a good friend from taxes wanted to own a bar in phuket, the lease is 500,000 baht for 5 yrs, renewable, and the rental pmt is 30,000 per mo.... the owner/lessors, husband and wife showed you all the taxes and dialy income and expenses etc.... the net income per month after all expenses including amortization, was 80k....

a fabulous income....

wound u like the deal....?

since u have a degree in finance.... could you give us the old timer an analyse of whether or not we farangs should take up this opportunity.... yes, a detail of your best analyse....

if u like, u can use the harvard business model for this analyse ok? or whatever model that u cherish would suffice for us.... and thx much in advance....

Edited February 20, 2010 by nakachalet

[chiangmaibruce]

The Thai Board of Investment has a web site with a number of downlaodable reports including one called "The Costs of doing business in Thailand". This may be of some interest to you, as a further point of reference only: http://www.boi.go.th/english/services/guides.asp

A further general reference that may be of some interest is this:

www.silkwormbooks.com/catalog/info/investment-guide-thailand

[witold]

This was a last minute trip so I didn't do a lot of research beforehand.  In general, I like the place!  I thought I knew enough about Thailand before the trip but many of my preconceived expectations were not met. I thought the country would be much less crowded, less touristy, and generally more scenic.  Still, I left with a very positive impression.  I liked some of the less crowded places quite a bit, I found some regions very scenic, and the overall atmosphere is great everywhere because of the relaxed attitude and friendliness of the people.  Combined with perfect weather, it turned out to be a very nice relaxed vacation for me.  A good place to visit or stay short time...

As a place to live, I have some serious reservations.  I got the impression that Thailand is living off of it's reputation from 20-30 years ago and the atmosphere for foreigners is getting worse and worse with increasingly tougher immigration/stay requirements, crackdowns on some of the workarounds for business ownership, increased costs, etc.  Maybe I've read too many forums and listened to one too many expats I met in some bars while traveling.  

Back to my question, the business atmosphere looks a bit odd to me in Thailand and that is why I wanted to hear some business related stories, experiences, statistics... 

Edited February 20, 2010 by witold

[jazzbo]

... and from the current posting on the BOI website of WHY THAILAND?

Stable, Supportive, Government

Thailand's political stability has long provided foreign businesses with a high degree of confidence in the country and security for their operations... In its 2005 international competitiveness rankings, IMD praised the ability of Thai government leaders to understand business challenges and institute effective policies to flexibly adapt to economic changes.

Oh well, a great place to be a buyer.

[Bizz]

The Thai Board of Investment has a web site with a number of downlaodable reports including one called "The Costs of doing business in Thailand". This may be of some interest to you, as a further point of reference only: http://www.boi.go.th/english/services/guides.asp

A further general reference that may be of some interest is this:

www.silkwormbooks.com/catalog/info/investment-guide-thailand

thank you for URL