Starting A Business, Is It Worth The Hassle?

[samjjohn]

Myself and my wife are planning on moving to Thailand next year. We were originally going to save enough money to live comfortably for a year with no job and go from there. However the last few days we have thought of setting up a very small business. Maybe a coffee shop or Internet cafe. We don't want it so we can make millions we just want enough to live a decent life style.

We are hoping to have around 2 million bht to buy a small business and allow for set up costs. I've been reading on here and am worried this may be to much hassle. We are in the early stages of planning but what are peoples initial thoughts, is it worth the hassle, what should we be concerned about as farangs about bribes, key money and rip offs in general.

Any tips or general advise would be really appreciated.

[damo]

Hi,

Good post, not that I can really help. Im in a simillar situation and am eagerly waiting to hear from other posters.

When we come over I will be taking the back seat and not getting involved and leaving any business persuit to my wife. I want to spend my time in LOS with my kids and enjoying not working for a while. We don't want to committ to any business immediately prefering to have some fun and settle in first.Three months is fair and then my wife will start her business. We have some irons in the fire so-to speak and have a something to work with now before we have arrived.

I have done all this once before and don't want to be bothered again, not for a small business. If you want to persue something larger then it may be worthwhile.

If I want to work I'll do it here in Australia, if I want to holiday I'll goto Thailand. it's just the way it really is ( im only 37).

Hope this helps.

[stiggy]

Forget Internet cafe hundreds of them and you'll end up with kids playing online games all day long or moaning backpackers

Find a business thats easy and you can leave if needed for a break.

Good luck and as long as your patient and getting a small business running is more for something to do and a bit of fun, go for it.

[simple1]

Have you any preference for a location in Thailand as location will dictate your setup costs. Stating the obvious you will need a business plan. Most SME's in Thailand will not have P/L you can rely upon as truthful to ascertain the value of the business so if you identify a location and business of interest go there a number of times at different times to ascertain the foot traffic (prior to expressing any interest). How much will you need to fund your lifestyle expectations and the profitable cash flow required to pay yourselves a salary, cover operational and capital costs. There are countless coffee & internet shops in Thailand. It will be a challenge to recoup your investment in say a three year (lease) period if you are thinking of buying an existing business. If you are avoid expat business brokers. Is your wife Thai and do you intend to work in the business? Personally it would not be worth the effort and likely you will loose your seed money.

Maybe other TV members will have a more positive view.

[crobe]

Just one question - is your wife Thai??

If you are both non-thai then it will be very difficult as you need Thai partners for most businesses.

If she is Thai then the easiest way is to form a limited partnership (her 51%, you 49%), otherwise you will need to have a certain amount of Thai employees signed up, and Thai partners, in order to register a limited company.

My wife and I have such a partnershio for the last 7 years, and we have sufficient capital in the business for what we need - you will also need capital of around 3m-5m (in order to be able to employ people).

Such a partnership has benefits in terms of tax status for the partners.

The best advice I can give you is to find a very trustworthy and reputable accountant, who can prepare your company papers and will also take care of your tax affairs, including corporate tax and VAT.

Some of the larger firms charge more, but an initial consultation in English is sometimes free.

Crobe

[how241]

Start a business that you enjoy doing. That way if you only make small money, most likely, you will still not mind being there everyday. Be careful and check out the potential business for a long time before jumping in. Not easy to sell a business here.

[jamescollister]

Have to agree with most of the above posts small businesses make Thai returns, which are not big. Coffee shops and internet cafe etc are money losers. You either have to spend big or have something different to offer. Does the OP have a trade which is valued in Thailand. Diesel mechanic, metal fabricator etc , these are people need where I am. We have enough bamboo bars, coffee shops, they come and go on a monthly basis, Think outside the square and do your home work. There are opportunities to be had, but you have to look hard. Jim

[tombkk]

I agree that there are too many coffee shops and internet cafes already. But if you know what you are doing and have experience in that business, maybe you will come up with a new idea and attract customers. Who knows, stranger things have happened. But I would suggest you take your time, live here for a while, and then decide what is needed and what fits your past experience.

Keep in mind that you need 4 Thai employees and 2 million Baht capital for each work permit, and you cannot work without it.

I recommend against buying a business, as you never know who will come with old outstandings and will ask you to pay up once you own it. Open a new company, it's not that difficult.

[koolbreeze24]

Don't do it. I learned the hard way. If Thais aren't involved there will be pay-offs to cops, lawyers, etc. Just not worth the hastle. Invest your money and live off that.

[happysanook]

So if you have a Thai partner, then it's possible to open a business without the Thai employee requirement?

If you have no employees, do you have to show 3 million baht capital?

[tombkk]

If you have a Thai partner, you are able to open a company. Without Thai partner there are only a few exceptions (with very high capital requirement, or BOI promotion for example) to open a company. There is no requirements for Thai employees to open a company.

However, without employees, you can't apply for a work permit. If you do not intend to work for the company, you won't need a work permit and hence there is no minimum capital requirement.

Minimum capital of 2 million Baht and four employees are required for your work permit and permission to stay, not for the company as such.

[happysanook]

If you have a Thai partner, you are able to open a company. Without Thai partner there are only a few exceptions (with very high capital requirement, or BOI promotion for example) to open a company. There is no requirements for Thai employees to open a company.

However, without employees, you can't apply for a work permit. If you do not intend to work for the company, you won't need a work permit and hence there is no minimum capital requirement.

Minimum capital of 2 million Baht and four employees are required for your work permit and permission to stay, not for the company as such.

Hmmm...Thanks...

Is it possible to still obtain non-B visa based on owning the company if you don't have employees?

As the owner, can I be there at the place of business giving direction of some sort...? I'm guessing "officially" not...if not, to what degree could I be at the place of business without it being considered "working"?

[jamescollister]

If you have a Thai partner, you are able to open a company. Without Thai partner there are only a few exceptions (with very high capital requirement, or BOI promotion for example) to open a company. There is no requirements for Thai employees to open a company.

However, without employees, you can't apply for a work permit. If you do not intend to work for the company, you won't need a work permit and hence there is no minimum capital requirement.

Minimum capital of 2 million Baht and four employees are required for your work permit and permission to stay, not for the company as such.

Hmmm...Thanks...

Is it possible to still obtain non-B visa based on owning the company if you don't have employees?

As the owner, can I be there at the place of business giving direction of some sort...? I'm guessing "officially" not...if not, to what degree could I be at the place of business without it being considered "working"?

If you have no employees whom would you be giving directions to, dog, cat. Better to let your Thai wife open the business, you are allowed to speak to her.

Bit more reaserch on your part and you may find some exceptions on the 4 employees rules. Jim

[brit1984]

I would recommend concentrating on a business (or businesses) in which you already have solid experience back home.

Setting up a new business in a new country is difficult, setting up a new business in a new country and a new industry is very difficult.

However, given the Thai economy's strong growth prospects, there are many opportunities for successful and profitable entrepreneurship here.

Sent from iPhone; please forgive any typos or violations of forum rules

[tombkk]

If you have a Thai partner, you are able to open a company. Without Thai partner there are only a few exceptions (with very high capital requirement, or BOI promotion for example) to open a company. There is no requirements for Thai employees to open a company.

However, without employees, you can't apply for a work permit. If you do not intend to work for the company, you won't need a work permit and hence there is no minimum capital requirement.

Minimum capital of 2 million Baht and four employees are required for your work permit and permission to stay, not for the company as such.

Hmmm...Thanks...

Is it possible to still obtain non-B visa based on owning the company if you don't have employees?

As the owner, can I be there at the place of business giving direction of some sort...? I'm guessing "officially" not...if not, to what degree could I be at the place of business without it being considered "working"?

If you sign a cheque, give instructions to employees (which you say you won't have), greet any customers, or send an email, you need a work permit. There is an actual definition of "work" in the alien employment law, it's something like "extorting your own energy to get something done" or such, somebody will surely correct me on the wording.

If you check the accounting books, which is your right as a silent partner, you are OK without a work permit.

Actually, the Labour Department itself has criticized the strictness of the law, so you can expect something to be changed soon. Within the next 10 or 20 years, that is.

Again, please remember that the non-imm B visa allows you to apply for a work permit. It does not allow you to work.

[tombkk]

I would recommend concentrating on a business (or businesses) in which you already have solid experience back home.

Setting up a new business in a new country is difficult, setting up a new business in a new country and a new industry is very difficult.

However, given the Thai economy's strong growth prospects, there are many opportunities for successful and profitable entrepreneurship here.

I agree with this. In addition, I myself worked for companies in Thailand (both Thai companies and multinationals) before opening my own company here. I don't think I would have survived on my own without the practical experience I gained as an employee in this country.

[meand]

I'd come and if you stay a while and are convinced you like it, i'd buy a condo. I find it easy to make small amounts of money here, doing various things, and if you have that rent free "base" it is a really strong position. Food and your other expenses can be very cheap. Very stress free, especially if you have a little of that cash left over.

Edited June 19, 2012 by meand

[happysanook]

If you have a Thai partner, you are able to open a company. Without Thai partner there are only a few exceptions (with very high capital requirement, or BOI promotion for example) to open a company. There is no requirements for Thai employees to open a company.

However, without employees, you can't apply for a work permit. If you do not intend to work for the company, you won't need a work permit and hence there is no minimum capital requirement.

Minimum capital of 2 million Baht and four employees are required for your work permit and permission to stay, not for the company as such.

Hmmm...Thanks...

Is it possible to still obtain non-B visa based on owning the company if you don't have employees?

As the owner, can I be there at the place of business giving direction of some sort...? I'm guessing "officially" not...if not, to what degree could I be at the place of business without it being considered "working"?

If you have no employees whom would you be giving directions to, dog, cat. Better to let your Thai wife open the business, you are allowed to speak to her.

Bit more reaserch on your part and you may find some exceptions on the 4 employees rules. Jim

Ummm... No. Not the dog... The partner....

Mind telling me what the exceptions are regarding the 4 employee rule? Or where I could find the list...

[Spoonman]

If you have a Thai partner, you are able to open a company. Without Thai partner there are only a few exceptions (with very high capital requirement, or BOI promotion for example) to open a company. There is no requirements for Thai employees to open a company.

However, without employees, you can't apply for a work permit. If you do not intend to work for the company, you won't need a work permit and hence there is no minimum capital requirement.

Minimum capital of 2 million Baht and four employees are required for your work permit and permission to stay, not for the company as such.

Hmmm...Thanks...

Is it possible to still obtain non-B visa based on owning the company if you don't have employees?

As the owner, can I be there at the place of business giving direction of some sort...? I'm guessing "officially" not...if not, to what degree could I be at the place of business without it being considered "working"?

If you have no employees whom would you be giving directions to, dog, cat. Better to let your Thai wife open the business, you are allowed to speak to her.

Bit more reaserch on your part and you may find some exceptions on the 4 employees rules. Jim

Mind telling me what the exceptions are regarding the 4 employee rule? Or where I could find the list...

Something along the lines of Thai wife = 2 Thai employees and No Thai wife = 4 Thai employee.

[gnazi71]

Hi Samjjohn,

I have a thai wife and I am in your situation.

We want to live in Thailand and are looking for a job or put up a business.

But it is very hard.

For the moment we look, we google, we speak to the relatives in LOS but ... nothing

If we put together all the people like us we should have a huge capital to invest....

bye

[Gary A]

I don't consider myself stupid but maybe I am. I tried starting a business with partners three times. The first time I had a Thai partner and was cheated out of my entire investment by my partner and a crooked Thai law firm. That was quite painful financially. The second time I tried it with a farang friend. The Thai company setup dealing with the government, customs and taxes ate up what little profit that was made. That was a total loss also but I didn't lose that much. The third time was with another farang. The manufactured product was a sure thing and certain to be a success. He turned out to be a conniver and a thief. Again I didn't lose that much.

Maybe the moral of my story is to never have a business partner. As for myself no more business ventures. I'm content to live out the rest of my days being stress free and comfortable just collecting my pensions.

[Mikey1]

Interesting topic. I thought I was alone as a farang with thai wife wanting to set up a business in Thailand.

I have an accountancy business in UK, ( Im not an accountant ) . Currently we have a UK tele sales based company that makes appointments for

my Field sales managers to go out to SME companies in Uk to pitch for business.

Could I employ people in Thailand to do that ? Obviously excellent English speaking people only ( no heavy accents etc )

Maybe it could be done on a commision only basis say £50 per appointment subject to quality criteria,

Any thougths / views?

Many thanks

Mike

[jamescollister]

Interesting topic. I thought I was alone as a farang with thai wife wanting to set up a business in Thailand.

I have an accountancy business in UK, ( Im not an accountant ) . Currently we have a UK tele sales based company that makes appointments for

my Field sales managers to go out to SME companies in Uk to pitch for business.

Could I employ people in Thailand to do that ? Obviously excellent English speaking people only ( no heavy accents etc )

Maybe it could be done on a commision only basis say £50 per appointment subject to quality criteria,

Any thougths / views?

Many thanks

Mike

My wife studied English in Uni in Australia for 3 years, after finishing her teaching degree in Thailand. No problem speaking face to face, get her on a phone with a person with an accent and she thinks they are speaking a different language. My muns Irish and on the phone she can not understand a word. Don't think Thailand is a place where you will find many English speakers who can understand a Gordie, Brumie or a Jock. Jim.

[Boyce]

Buy a couple of condo's instead at least you will get a return on your investment, and the property will be in your own name.

[MrZM]

The key to owning a business in Thailand is the rent.

I know of many westerners who are struggling due to western price rents (24,5000/45000 baht per month)!

I have 1 laundry shop and a corner shop, rent on both properties are 3,500 baht per month, it's affordable in a bad month and still clear profits!

95% of companies in Thailand are duplicated, yes they make money, but you have to cut out massive overheads.

[jamescollister]

The key to owning a business in Thailand is the rent.

I know of many westerners who are struggling due to western pri ce rents (24,5000/45000 baht per month)!

I have 1 laundry shop and a corner shop, rent on both properties are 3,500 baht per month, it's affordable in a bad month and still clear profits!

95% of companies in Thailand are duplicated, yes they make money, but you have to cut out massive overheads.

Think the key to the whole thing you said is in the first line. If you can't afford to own the place, you can' afford to spend the money to make the business viable long term. When you own you can sit out the bad times, when you lease, you have to have the money coming in or you go broke. Jim

[ThaiPauly]

I would recommend concentrating on a business (or businesses) in which you already have solid experience back home.

Setting up a new business in a new country is difficult, setting up a new business in a new country and a new industry is very difficult.

I have shared my experiences here before.

I tried to start a biz based on what I was doing very well at in the UK....it tanked.

I then tried my hand at 3 other businesses here that I had never had any experience in , all failed

So I decided to keep the rest of my cash offshore earning interest.

I was lucky that I did not commit more than a couple of million baht to these ventures, if I had continued to throw good money after bad I would be broke by now.

If I had the chance to do it again I would go down the 7/11 route, but I have been so put off with rules and regulations here that I am past bothering.

So my advice would be that unless you absolutley MUST earn a living here don't bother trying, I know some will say that's a very negative approach, but I am just sharing my experiences, It's obviously up to the OP to make a decision for himself, but as previously said stay away from Internet cafe's (which are getting even less business these days with the arrival of smart phones) and coffee shops, I have lost count of the number of them that I have seen come and go here in Chiang Mai.

But good luck to you if you go for something

[MacChine]

NO !! Having to have 4 worker s means instead of hiring two well paid workers who will do their jobs in a competent manner, you'll pay four who are surly and bear constant scrutiny.

The minimum employee rule is why I'm considering eating a loss and closing the business .

OT but Incidentally about condo from prior posts advocating , your foreign heirs cannot inherit a condo, They wil have to bringin the value of the condo in cash and keep it in a bank. They don't tell you that at the overpriced foreign "lawyer's" office I bet.

Edited October 19, 2012 by MacChine

[ajarnpot]

I would recommend concentrating on a business (or businesses) in which you already have solid experience back home.

Setting up a new business in a new country is difficult, setting up a new business in a new country and a new industry is very difficult.

I have shared my experiences here before.

I tried to start a biz based on what I was doing very well at in the UK....it tanked.

I then tried my hand at 3 other businesses here that I had never had any experience in , all failed

So I decided to keep the rest of my cash offshore earning interest.

I was lucky that I did not commit more than a couple of million baht to these ventures, if I had continued to throw good money after bad I would be broke by now.

If I had the chance to do it again I would go down the 7/11 route, but I have been so put off with rules and regulations here that I am past bothering.

So my advice would be that unless you absolutley MUST earn a living here don't bother trying, I know some will say that's a very negative approach, but I am just sharing my experiences, It's obviously up to the OP to make a decision for himself, but as previously said stay away from Internet cafe's (which are getting even less business these days with the arrival of smart phones) and coffee shops, I have lost count of the number of them that I have seen come and go here in Chiang Mai.

But good luck to you if you go for something

Counteropinion: if you can work as hard as the locals then setting up a business is worthwhile, though you may not have the support network that locals may have as well as the language/cultural obstacles, it is acheivable.

[tombkk]

Good point, and I think I am not the only successful farang businessman in Thailand.

Hard work is an important ingredient.

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