Buying An Existing Business

[Kanaka]

I've been looking to buy a small business in Chiang Mai. My problem is that I don't know the rules. Do I need to go through all the procedures and financing as if I was starting a new business? Is there any articals I can refer to on the web or this site ? If there is anyone who has gone through buying a business who can share their insites? Do I automatically receive any visa or financial advantages by being a business owner? If anybody has answers to any of these questions please help me out.

[Sunbelt Asia]

Advantages of Investing in an Existing Business

Business has a track record

Immediate cash flow from day one

Trained employees in place

Trained manager in place

Training by the owner

Vendors already set-up

Established customers base - on-going business

Licenses in place - easy to transfer and some assumable

Lease easier obtained - landlord knows the business

Public acceptance and awareness

All essential inventory and equipment in place

Already endured the failure time period

Advertising/Marketing on-going - knows what works

Financial institutions favors a business with a track record. (Chance with a start-up... almost nil)

Credit cards system established

Insurance in place - business has a performance model

Lower unemployment rate in most cases

Accountant/bookkeeper in place and can continue

Signage, logos, slogans and possible patents in place

Financing by the seller in a case by case basis.

Do I need to go through all the procedures and financing as if I was starting a new business?

Share transfer.. you have the endorse shares and assign the new shareholders. You should have a good lawyer to be sure you're protected. Our fee is 9,500 Baht for the agreement (around detailed 12 pages) which are done to your case needs.

Asset purchase... you need a new corporation and asset purchase agreement. The agreement contract is 4,500 Baht. The new corporation legal is 7,500 Baht.

Financing... Never heard one bank that would finance a start up. Existing business, more likely to get financing from the Seller.

Is there any articals I can refer to on the web or this site ?

www.sunbeltasia.com Click on "Own a Thai business." on the home page. Nine articles can be found under that heading.

If there is anyone who has gone through buying a business who can share their insites?

Did around 120 Business transfers last year and have been doing this for 20 years. 18 years in the USA and 2 years in Thailand. I'm in charge of five offices in Thailand here. Happy to help with any questions.

Do I automatically receive any visa or financial advantages by being a business owner?

No. You need to apply for the visa outside the country unless the firm you are acquiring has BOI status. ( Board of Investment). On the "B" visa or "O" visa we can help.

Regards,

Greg Lange

Managing Director

Sunbelt Asia

[email protected]

[cdub]

I'm wondering Sun Belt....

We know that there are tought rules for foreigners in order to create a company in Thailand (number of thai shareholders, amount of shares etc.)

So why on your site you dont' specifiy the type of the "structure" (limited, partnership etc.) for each of the business you have on your sell list ?

And why you don't specify the structure of the capital (number of thai shareholders for example) ?

I mean, OK I can invest and buy an existing thai company, but what's the point if I can not own legally this company ????

(sorry for my poor english).

Christophe

[Sunbelt Asia]

Thank you for your letter Christophe.

We know that there are tought rules for foreigners in order to create a company in Thailand (number of thai shareholders, amount of shares etc.)

Not really. Our lawyers do it 5 days every week. It's what they do and we find that every case is different. But in every case, their is a solution to do it legal.

So why on your site you dont' specifiy the type of the "structure" (limited, partnership etc.) for each of the business you have on your sell list ?

Because 99% of the listings are acquired with someone forming a new corporation and acquiring the assets( trade name, equipment, inventory, good will) Very few of our listings are ever acquired in a share transfer. We don't advise it.

And why you don't specify the structure of the capital (number of thai shareholders for example) ?

Same answer. What it was going on before, how much the corp set up of capital, shareholders is meaningless if you form a new corp and acquire the assets.

mean, OK I can invest and buy an existing thai company, but what's the point if I can not own legally this company ????

I understand what your concern is but we have four full time licensed lawyers who will form a legal corporation. No matter what nationality you will control it either through BOI, Amity, using voting Rights, Alien License, MD power to bind the company or with two separate Thai Corps owning each other. Every solution is legal. Our lawyers knows the laws and its how our lawyers advise that you're comfortable but also the Thai government is comfortable as well. That is our commitment to advise the best legal solution to your case. Our professional fees you'll find is the lowest in Thailand.

Regards,

Greg Lange

Managing Director

Sunbelt Asia

www.sunbeltasia.com

[cdub]

Because 99% of the listings are acquired with someone forming a new corporation and acquiring the assets( trade name, equipment, inventory, good will) Very few of our listings are ever acquired in a share transfer. We don't advise it.

Fair enough. I got the point ! Now it's clear.

;-)

One another thing regarding your website. After a few looking, I found the site of your collegues in the States :

http://www.sunbeltnetwork.com/SearchMain.jsp10

It appears that they have the same database than you (for Thailand) but with more data. For each company, in addition of the the other figures, they put the "Payroll" (which is an interesting figure...), the "Rent", and the surface of the building/venue (if relevant).

And last, they have a Keyword mode research. Which is very usefull.

You should upgrade your own website.

Regards,

Christophe

[Sunbelt Asia]

It appears that they have the same database than you (for Thailand) but with more data. For each company, in addition of the the other figures, they put the "Payroll" (which is an interesting figure...), the "Rent", and the surface of the building/venue (if relevant).

And last, they have a Keyword mode research. Which is very usefull.

You should upgrade your own website.

My IT guy is going to love you :-) Corporate's website does have a good search tool. Payroll and rent comes out of the Cash flow number so when we designed Sunbelt Asia's website, we left that data out. We input data on all the listings on 6 different websites! 380 Sunbelt offices did a total of 9,000 listings last year. We did 900 listings ourselves! So imagine our workload. Some of our Thai listings are quite detailed as you might find on www.businessesforsale.com Just not enough hours in the day to do everything.

The keyword we've been working on for two months. Good point and the IT guy is to get the year end bonus in the morning. Hmmm, something to talk about. :-)

[Kanaka]

Thanks Greg

You will be hearing from me soon.

[SunbeltAsia]

Thanks Greg

You will be hearing from me soon.

<{POST_SNAPBACK}>

[ZOVOX]

I have been looking for a small business myself for some time, and the one thing that concerns me is that 'company formation' was not solely intended to be used for purchasing small businesses. Later, the thai government could change the law to tighten this loophole: for example, they could greatly increase the required capital requirements or minimum wage for work permits etc etc.

[Sunny Valentine]

So why on your site you dont' specifiy the type of the "structure" (limited, partnership etc.) for each of the business you have on your sell list ?

Because 99% of the listings are acquired with someone forming a new corporation and acquiring the assets( trade name, equipment, inventory, good will) Very few of our listings are ever acquired in a share transfer. We don't advise it.

Regards,

Greg Lange

Managing Director

Sunbelt Asia

www.sunbeltasia.com

<{POST_SNAPBACK}>

Am in search of a business as well, and have looked at your Offerings on your Homepage quite often.

What puzzles me (in sight of the way you seem to advise the transferring) is the amount of detail you put up for the business current lease or rental contract. As I understand Thai law and especially the reality of the game here, you have to make a brand new rental / lease contract once you take over the business in the way advised by you. Meaning that all this "Only 10000 Bt. monthly rental with lease valid until 2006, renewable to same conditions, rent paid in advance until the End of 2005 will almost certainly mean nothing to the landlord once you take over the Company's assets and name.

Or am I wrong?

Sunny

[SunbeltAsia]

they could greatly increase the required capital requirements or minimum wage for work permits etc etc.

On a Thai limited company. the required capital requirement is only 35 baht ( 7 promoters at 5 baht each) Could this change? Yes but nothing looks like they will.

For a foreigner looking to get a WP. Different story. This can change. Always seems to be ways to solve any potential problem and still be lega though.

www.sunbeltasia.com

[SunbeltAsia]

What puzzles me (in sight of the way you seem to advise the transferring) is the amount of detail you put up for the business current lease or rental contract. As I understand Thai law and especially the reality of the game here, you have to make a brand new rental / lease contract once you take over the business in the way advised by you. Meaning that all this "Only 10000 Bt. monthly rental with lease valid until 2006, renewable to same conditions, rent paid in advance until the End of 2005 will almost certainly mean nothing to the landlord once you take over the Company's assets and name.Or am I wrong?

You are correct. Why the business writer goes into detail on this point? Even though the old lease is torn up, it still is used as a guideline for the new lease.

If the previous lease was 80,000 per month for three years plus three years.

That will be the the same condition you'll request from the landlord. You may get the same terms or perhaps the landlord will ask for 85K per month.

You'll know in advance, if the current lease is year to year then you'll have your work cut out for you to get a 3+3+3 contract. We help you negotiate with the landlord.

www.sunbeltasia.com