Love Thailand Dearly, But Reevaluating Having A Business Here

[lemoncake]

a suggestion? perhaps pay per working day....if they work 5 days per week that will be just over 20 days which is 6000 baht?

reagards.

Can not do that , must pay for days off also. That's by law.

Will be even harder to find staff when minimum wage is 9000 per month, who would work for 6000? Legally that is

[WinnieTheKhwai]

Oh please, labor is just one of many expenses for any business. One will not need to double the price of your product or service to cover any anticipated minimum wage increase. Sure, a modest price increase may be necessary. So too would be a tightening of other costs and, I know this is sacrilegious, but a small cut in the owners personal income may be in order until you can figure out how to increase your efficiency and your sales. So stop crying in your beer.

Agreed. Especially considering that people on a minimum wage have been denied any kind of participation in the overall increase in growth and opportunities in Thailand. And besides, any business that wants above average employees, respects those employees AND recognizes the benefit of them actually staying on, is already paying more than the minimum wage. So its a much more modest increase, if at all.

The bigger question is probably about the continued viability of this particular business, in the current form.

[lemoncake]

The correct way to calculate the price rise would not be to increase the prices by the same % as the wage rise. however many do just that and loose many customers.

Also to make it harder, because many just add the 30% increase into the pricing, it is no longer ONLY about the wages but also the cost of goods and services..

I also agree making such a huge jump "overnight" was/is the worst idea and it will show shortly.

Government should have made gradual rise say 5%-10% every 6 months or so, this way businesses can adjust and perhaps increase prices slowly.

There use to be a restaurant in Pattaya(notice i say use to be) when the wages went up, he raised his prices with the same %, The place was always packed with regulars who felt being scammed because the same dish over night cost them 30% more.

The place slowly emptied out and closed down just recently

Now to answer OP, If its worth having business in Thailand?!, I think about it every single day, and the conclusion i have come up with is, it is not possible to get rich from having a business here, but is possible to have a living.

The headaches with staff, rules and laws does at times get too much and money made sometimes is not worth it, but is it really any better in any other place in the world?

Yes Burma looks attractive, but we do not really know the conditions there just by looking from the outside.

[DLock]

Gonzo has valid concerns.

Simply raising prices to cover the increase in salary as a percentage of overall costs is limited thinking.

Your suppliers will increase their costs. Your delivery fees will go up because someone has to pay their drivers more and cover their costs. etc etc.

So, in reality, you may have significant increases across your P&L that will force you to either absorb them in your bottom line or increase your prices to cover the upstream increases that have been passed on to you.

Bottom line is that this 300baht increase mandated by the Government was ill conceived and poorly thought through. But it worked. It rallied the masses around a massive pay increase that the Government did not have to fund.

Brilliant.

[Ulysses G.]

Bottom line is that this 300baht increase mandated by the Government was ill conceived and poorly thought through. But it worked.

Yes, it worked. It got them elected.

[Oscar2]

considering the cost of living in Thailand now, 9000 Bahts minimum is a reasonable step forward. the cost of food, healthcare, raising children, etc. has skyrocketed over the last 5 years.

[hellodolly]

Gonzo has valid concerns.

Simply raising prices to cover the increase in salary as a percentage of overall costs is limited thinking.

Your suppliers will increase their costs. Your delivery fees will go up because someone has to pay their drivers more and cover their costs. etc etc.

So, in reality, you may have significant increases across your P&L that will force you to either absorb them in your bottom line or increase your prices to cover the upstream increases that have been passed on to you.

Bottom line is that this 300baht increase mandated by the Government was ill conceived and poorly thought through. But it worked. It rallied the masses around a massive pay increase that the Government did not have to fund.

Brilliant.

Very well said it is not only the increased wages you pay your employes it is also the increased cost you pay for products. Net result is higher cost of living. It is inevitable. Also there will be businesses going out of business. Result unemployment. They say that will not be a problem being as there is a shortage of workers all ready. But how does a dish washer suddenly become a electrician or plummer. NOT.

The government should be looking for a way to hold down inflation as well as give employes a better wage. One of the ways they could do this would be to eliminate the red tape and graft that a employer must go through there by allowing him more money to pay his staff. This would also include corruption in the elected officials which does nothing but add to the taxes a employer must pay.

What is the use of higher wages if you can not purchase any more things with them than you can with what you are already earning? The people who pass these laws will the increase in wages even slightly make a difference to them with the amount of money they are making the price increases will not even be noticed.

[DLock]

Bottom line is that this 300baht increase mandated by the Government was ill conceived and poorly thought through. But it worked.

Yes, it worked. It got them elected.

That was my point.

In what may be seen by the People as a massive quality of living increase, in reality, the salary increase will do little to raise the standard of living at the bottom end.

As Gonzo alludes, the costs to provide salary increases mandated by the Government will undoubtedly be passed along the supply chain so that whatever could be bought for 200 baht on a 6,000baht per month salary, will now be 300 baht on a 9,000baht salary.

It may not affect the lower end as much as the middle/upper end, but not only will business owners be forced to pay more for zero productivity gains in their staff, they will be forced to pay more where they shop, eat and drink to cover the rises in other businesses staff costs.

I don't know the qualifications of those that made these random decisions, but economics is not one of them.

[kilvingtono]

Off topic a little bit, but here goes. Can someone tell me if Thai's are paid a full 7 days per week while only working 6. Is the monthly figure worked on 4.3 weeks per month? Thanks for your help.

[lemoncake]

Off topic a little bit, but here goes. Can someone tell me if Thai's are paid a full 7 days per week while only working 6. Is the monthly figure worked on 4.3 weeks per month? Thanks for your help.

they must be paid the full week the day off included. You can offer a job with condition that they are paid daily, however after i believe 30 or 60 days of work, they must be paid for days off.

Does not mean all businesses do it, but thats the law.

[Gonzo the Face]

Very good discussion going on in my opinion. One portion of the OP seems to have caught the most attention. That is the wage increase.

Some good input posting by some showing involvement of real thought, and, of course true to form, some just blowing thoughtless anal smoke.

Lets just take a look at the wage discussion. Yes an increase of this sudden magnitude will have a ripple effect through all of which is Thainess. Some posters see the benefit to a certain group with the creation of this program. The only befefit throughout the program is that it got the certain party elected. Yes, the little people of limited education may feel that they have received a windfall for their vote, but in reality that will soon come crashing down upon them when full reality hits the streets.

Lets make it simple for the masses. Rather than showing as a salary increase to the worker, lets look at another way so its full implications may be seen. It will have an affect on all in Thailand eventually, so lets consider it as equality and look at it in this manner. Rather than a worker increase in wages, just everyone just add one additional " 0 " to all your income, {great} and add another " 0 " to every expense you have [ not so great]

Think the ramifications of that one through

Only good news in this thread, seems to be that at least some people are thinking.

G

Edited December 16, 2012 by Gonzo the Face

[Mapguy]

Here's something to chew on:

http://en.wikipedia.org/wiki/Minimum_wage

[hellodolly]

Another point is that those who are not full time workers will be paying full time inflation.

Plus the ones who lose there jobs.

[moe666]

Gonzo has many valid concerns but never heard what he wants to do to make his business better. He is worried about things he has no control over, why not focus on what you can control not what you cannot.

[Lancelot]

The new 300 baht daily minimum wage was a pretty slick move by the government- make the voters happ and stimulate the economy at no cost to the politicians

I'm not familiar with the new las but I would imagine that there would be multiple exclusions, such as does not apply to hourly workers, employers with three or less employees, domestic help, family members etc. Think about it, how could a noodle stand afford to pay a 9,000 baht monthly salary to its service staff?

Probably only legitimate, large business will pony up the money and they are probably compensating their employees at that level or more already.

But I wouldn't want to be a foreign business ower with thai employees because I would imagine there might be "selective" enforcement of the law, depending on your nationality

Prove me wrong

[DLock]

Gonzo has many valid concerns but never heard what he wants to do to make his business better. He is worried about things he has no control over, why not focus on what you can control not what you cannot.

Feel free to offer some suggestions.

[cloudhopper]

The new 300 baht daily minimum wage was a pretty slick move by the government- make the voters happ and stimulate the economy at no cost to the politicians

I'm not familiar with the new las but I would imagine that there would be multiple exclusions, such as does not apply to hourly workers, employers with three or less employees, domestic help, family members etc. Think about it, how could a noodle stand afford to pay a 9,000 baht monthly salary to its service staff?

Probably only legitimate, large business will pony up the money and they are probably compensating their employees at that level or more already.

But I wouldn't want to be a foreign business ower with thai employees because I would imagine there might be "selective" enforcement of the law, depending on your nationality

Prove me wrong

Your entire post is nothing but speculation, there is nothing to prove. Wage and price controls of all types inevitably fail and lead to black market economies. It is better to be employed at the free market rate than unemployed at the controlled rate in every case.

[mic6ard]

Very good discussion going on in my opinion. One portion of the OP seems to have caught the most attention. That is the wage increase.

Some good input posting by some showing involvement of real thought, and, of course true to form, some just blowing thoughtless anal smoke.

Lets just take a look at the wage discussion. Yes an increase of this sudden magnitude will have a ripple effect through all of which is Thainess. Some posters see the benefit to a certain group with the creation of this program. The only befefit throughout the program is that it got the certain party elected. Yes, the little people of limited education may feel that they have received a windfall for their vote, but in reality that will soon come crashing down upon them when full reality hits the streets.

Lets make it simple for the masses. Rather than showing as a salary increase to the worker, lets look at another way so its full implications may be seen. It will have an affect on all in Thailand eventually, so lets consider it as equality and look at it in this manner. Rather than a worker increase in wages, just everyone just add one additional " 0 " to all your income, {great} and add another " 0 " to every expense you have [ not so great]

Think the ramifications of that one through

Only good news in this thread, seems to be that at least some people are thinking.

G

Yep That's the main problem with the wage hike. Sure it'll help to offset the living expenses, but everything combine is still higher than 9k/mth.

Rent (for newer place): 4k+

Food (1 bowl of noodle-special, O-liang):70/meal so add in dinner and beer money = approx 150/day? (might be closer to 250)

loans:...

You see what I'm getting at? It actually make sense to hike the wage. I remember working in the US, and my wage suddenly increase due to living cost IN THE AREA increased (according to the employer's calculation).

However Gonzo raised a good point regarding service sector of the industry. We're already hurting due to higher expenses (gas, electricity, supplier fees and other raw materials).

And you know what? the affect of the hike was only minimal when you calculate the % increase base on your TOTAL wage, i.e. including those already receiving high wages (managers, etc). So a 30% hike in wage won't mean 30% hike in food price, it still be a noticeable amount.

[Gonzo the Face]

Just came over the TV Newsflash....... No more Non Imm B multi entry visas from KL....

In reading further, it doesn't bode well for the cause..... Starting to believe that Thailand for sure doesn't want foreign investors or foreigners here

Another nail in the coffin...... Anybody know how many nails it takes to seal the deal???

Just work your way thru the doldrums and wham ! ! ! ...another kick in the crotch

[onthedarkside]

Just came over the TV Newsflash....... No more Non Imm B multi entry visas from KL....

In reading further, it doesn't bode well for the cause..... Starting to believe that Thailand for sure doesn't want foreign investors or foreigners here

Another nail in the coffin...... Anybody know how many nails it takes to seal the deal???

Just work your way thru the doldrums and wham ! ! ! ...another kick in the crotch

And you only just worked out that Thailand does not want foreign businessman I've been in business here in Thailand for over a decade, invested a lot of money, employed Thai staff, pay all the various taxes, always correct paperwork/WP/etc. Even married to a Thai national. Yet every year when i apply for my annual extension and WP the authorities make it much harder to qualify. I too am just about ready to pack it in.

[Gonzo the Face]

Just came over the TV Newsflash....... No more Non Imm B multi entry visas from KL....

In reading further, it doesn't bode well for the cause..... Starting to believe that Thailand for sure doesn't want foreign investors or foreigners here

Another nail in the coffin...... Anybody know how many nails it takes to seal the deal???

Just work your way thru the doldrums and wham ! ! ! ...another kick in the crotch

And you only just worked out that Thailand does not want foreign businessman I've been in business here in Thailand for over a decade, invested a lot of money, employed Thai staff, pay all the various taxes, always correct paperwork/WP/etc. Even married to a Thai national. Yet every year when i apply for my annual extension and WP the authorities make it much harder to qualify. I too am just about ready to pack it in.

Stop by some time and we can commiserate. Beer on me...... as hard times are here, make that one beer with 2 straws.

[WinnieTheKhwai]

Just came over the TV Newsflash....... No more Non Imm B multi entry visas from KL....

In reading further, it doesn't bode well for the cause..... Starting to believe that Thailand for sure doesn't want foreign investors or foreigners here

Another nail in the coffin...... Anybody know how many nails it takes to seal the deal???

Just work your way thru the doldrums and wham ! ! ! ...another kick in the crotch

I can see that's inconvenient for some, but why would anyone need to leave the country at all to apply for a new visa when working here long time for the same business/company .... ?

I haven't seen the inside of a Thai embassy or consulate in 14 years.

[mania]

It is a tough one for sure.

I can see both sides & have no answers.

I agree the guy on the bottom was long overdue for a boost in minimum income.

But I can also see that it will be eaten up by increased taxes (due to increased income )

& expense being higher ( due to increase production costs ) & passed onto them like it or not

cancelling in a sense their raise.

I have seen it happen for decades in the USA

Unions fought to get their members higher wages which really went too

high given the jobs. That in turn caused the employers to raise the price of their products

& pass that cost along right back into the economy.

It was like a dog chasing its tail. Worse yet eventually many American made products were

no longer competitive on the worlds stage & companies either folded or went to

a country where they could produce for less due to lower wages & then the US worker

lost jobs completely.

Yes vicious circle it is.

But, getting back to the truly little guy.

The guy making 200 baht a day & not able to supplement with

another job because in Thailand one job usually takes all your time.

(days not limited to 8hrs)

What is not fair for him is regardless of his raise or not expense has risen for

him these last years anyway. It would be fine to keep wages that low

if there was some across the board agreement that popular everyday

products & expenses would also remain static but they don't.

Yes tough one for sure

[Ulysses G.]

I can see that's inconvenient for some, but why would anyone need to leave the country at all to apply for a new visa when working here long time for the same business/company .... ?

One reason is to get a business visa inside Thailand, you have to pay tax on a salary of 60,000 baht (for Americans) whether you actually make that much, or not. If you get a business visa from outside the country, you don't have to declare such a high salary and can pay less tax. The downside is having to leave the country to get the visa and having to go across the border to Burma every 3 months.

[hellodolly]

Just came over the TV Newsflash....... No more Non Imm B multi entry visas from KL....

In reading further, it doesn't bode well for the cause..... Starting to believe that Thailand for sure doesn't want foreign investors or foreigners here

Another nail in the coffin...... Anybody know how many nails it takes to seal the deal???

Just work your way thru the doldrums and wham ! ! ! ...another kick in the crotch

And you only just worked out that Thailand does not want foreign businessman I've been in business here in Thailand for over a decade, invested a lot of money, employed Thai staff, pay all the various taxes, always correct paperwork/WP/etc. Even married to a Thai national. Yet every year when i apply for my annual extension and WP the authorities make it much harder to qualify. I too am just about ready to pack it in.

Stop by some time and we can commiserate. Beer on me...... as hard times are here, make that one beer with 2 straws.

The article said nothing about not being able to get one in Cambodia or Laos.

[lemoncake]

Just came over the TV Newsflash....... No more Non Imm B multi entry visas from KL....

In reading further, it doesn't bode well for the cause..... Starting to believe that Thailand for sure doesn't want foreign investors or foreigners here

Another nail in the coffin...... Anybody know how many nails it takes to seal the deal???

Just work your way thru the doldrums and wham ! ! ! ...another kick in the crotch

And you only just worked out that Thailand does not want foreign businessman I've been in business here in Thailand for over a decade, invested a lot of money, employed Thai staff, pay all the various taxes, always correct paperwork/WP/etc. Even married to a Thai national. Yet every year when i apply for my annual extension and WP the authorities make it much harder to qualify. I too am just about ready to pack it in.

Stop by some time and we can commiserate. Beer on me...... as hard times are here, make that one beer with 2 straws.

The article said nothing about not being able to get one in Cambodia or Laos.

Thats not the point, the point OP was trying to make is that Thai government seems to do anything and everything possible to make it harder for business people to do business, which now even includes something as simple as visa

[WinnieTheKhwai]

I can see that's inconvenient for some, but why would anyone need to leave the country at all to apply for a new visa when working here long time for the same business/company .... ?

One reason is to get a business visa inside Thailand, you have to pay tax on a salary of 60,000 baht (for Americans) whether you actually make that much, or not. If you get a business visa from outside the country, you don't have to declare such a high salary and can pay less tax. The downside is having to leave the country to get the visa and having to go across the border to Burma every 3 months.

Either way you can't legally work without a work permit. The business visa by itself doesn't allow you to work and receive a salary in Thailand. What you write above doesn't mean 'less tax', it means complete tax dodging of of tax on any income.

And besides the tax on 60K (wasn't it 65K) isn't all that much, especially considering that you also get pretty useful social health insurance.

[lemoncake]

I can see that's inconvenient for some, but why would anyone need to leave the country at all to apply for a new visa when working here long time for the same business/company .... ?

One reason is to get a business visa inside Thailand, you have to pay tax on a salary of 60,000 baht (for Americans) whether you actually make that much, or not. If you get a business visa from outside the country, you don't have to declare such a high salary and can pay less tax. The downside is having to leave the country to get the visa and having to go across the border to Burma every 3 months.

Either way you can't legally work without a work permit. The business visa by itself doesn't allow you to work and receive a salary in Thailand. What you write above doesn't mean 'less tax', it means complete tax dodging of of tax on any income.

And besides the tax on 60K (wasn't it 65K) isn't all that much, especially considering that you also get pretty useful social health insurance.

actually about the health insurance, you do not, but you are right, just having the visa does not give right to work, but is a visa which can obtain work permit providing you meet other requirements, such as Thai employees and a few other things

[Mestizo]

I can see that's inconvenient for some, but why would anyone need to leave the country at all to apply for a new visa when working here long time for the same business/company .... ?

I haven't seen the inside of a Thai embassy or consulate in 14 years.

Sure, if you want to become stagnant in your career and never move on to a better company/ salary.

Your last day of working at Company A, your work permit is cancelled and your visa is nullified. You have 7 days to leave the country. At this point, Company B will usually have you fly down to Malaysia and start the new visa process there, so that you can re-enter the country. I *think* this is also possible in Singapore, but KL is "more easier" for whatever reason.

-Mestizo

[Lancelot]

The new 300 baht daily minimum wage was a pretty slick move by the government- make the voters happ and stimulate the economy at no cost to the politicians

I'm not familiar with the new las but I would imagine that there would be multiple exclusions, such as does not apply to hourly workers, employers with three or less employees, domestic help, family members etc. Think about it, how could a noodle stand afford to pay a 9,000 baht monthly salary to its service staff?

Probably only legitimate, large business will pony up the money and they are probably compensating their employees at that level or more already.

But I wouldn't want to be a foreign business ower with thai employees because I would imagine there might be "selective" enforcement of the law, depending on your nationality

Prove me wrong

Your entire post is nothing but speculation, there is nothing to prove. Wage and price controls of all types inevitably fail and lead to black market economies. It is better to be employed at the free market rate than unemployed at the controlled rate in every case.

Umm, OK.... Maybe reading comprehension was not your best subject in school.

I think the new goverment mandate of 300 baht poer day is vote buying, pure and simple. I also feel it will be difficult to enforce, and then enforced selectively- against foreign business owners.

Proving me wrong would be your argument that the new law is good for Thailand.

Batter up!