Is Doing Business In Thailand Even Worth It?

[Sunbelt Asia]

Do not trust anyone......and be extremely sceptical about the business figures which are presented to you........

Very true

.

You are far better starting a new business from scratch with your own new ideas than buying a so called established business which has more than likely run it`s course and is now struggling.

Why do you think that all these businesses are on the market.....because they are wildly successful?......or because the current operator can`t wait to unload the mill stone around his neck.

100% disagree; Some would say I'm biased as this is my business. But the facts speak for themselves on the success ratio around the World on someone acquiring a business versus starting up..

A person who looks at 10 different existing businesses and picks the best one. Has a far better chance of succeeding than one starting from zero.

Why?

He is ringing the cash register the first night versus 4 months later.

He has seen the business and it is a proven business model versus a business plan that may or may not work.

He is getting training from the previous owner versus using trail and error.

He has trained staff that is worth their weight in gold versus hiring and firing till he has a good staff.

He has a two year head start with people knowing the company rather than fighting for every customer to come in the door.

Why is a business like this for sale? For human reasons… divorce, partnership dispute, relocation, retirement, health problems, burn out.

Are all businesses making money?

Absolutely not but it doesn’t take much eye to see a well oiled machine versus a broken down jalopy. There are truly some great opportunities for some people to take over. A person who is selling because they are motivated by money, are easy to spot.

The ones that need to sell because of human reasons; these are the ones to look at closely. Then look at the growth of the business and check the books against invoices, credit card receipts and customer counts. Bottom line, follow the money the company has made to see if it’s real.

The true winner in a successful business transfer is almost always the buyer. That’s why the seller has to be motivated to sell because of human reasons. Otherwise hes nuts to sell.

I'm hosting a talk show called Legal Eagle. Just had an idea to start bringing on people that have taken over existing businesses a couple years ago and have them talk about the experience. Think it would be great to hear real case stories.

www.sunbeltasia.com

[Pattaya_Fox]

Although you disagree 100% with starting a business the fact remains that all successful businesses to-day were once start up businesses or extensions of start up businesses.

In the context of the OP`s desire to start a small business then:-

To take over an existing business can be costly.

To take on existing staff can be counter productive.

To train your own staff to work to your methods can be more productive.

To start a business from scratch with the right identity in the right location with the right staff can be a winner.

As I said in the market in which he is looking to operate there are many failures....you`ve only to look at the bars etc in Pattaya, which are continually being marketed and continually fail.

Having said that there are good businesses out there to be purchased...it`s down to the individual purchaser as to how he/she wishes to enter the market....i.e. new business or existing one.

[Pattaya_Fox]

1st period 110,000 X 36 = 3,960,000 = 360,000 increase

2nd period no increase I assume that you mean 100,000 X 36

3rd year 10% increase 110,000 X 36 = 3,960,000 = 360,000 increase

total increase paid on original agreed 100,000 per month = 720,000 over 9 years

720,000 divided by 108 = 6666 increase per month above 100,000 per month

There will also be an accounting benefit to the landlord as the rent for the first period was increased and paid before the end of the period.

I understand and thanks for pointing this out. Also, for letting me explain the example I gave in more detail.

If a landlord wanted to give you a 3 year plus 3 year lease which is norm. This is one of the suggestions to get a longer lease.

110,000 per month for 6 years and 121,000 per month for years 7-9. The net additional cost for this suggestion is 360,000 Baht. Why do I say that?

In theory if the Landlord was willing to give a 3+3+3 with a 10% increase cap for each term...

Years 1-3 would be 100,000 Baht per month

Years 3-6 would be 110,000 Baht per month

Years 7-9 would be 121,000 Baht per month

But when I’m willing to give 110,000 Baht for the first term, I'm paying 10,000 Baht more per month or 360,000 Baht for the first term.

The second term is the same amount... 110,000 Baht per month

The third term is the same amount... 121,000 Baht.

If he was willing to give you a 3+3+3 lease anyway, then you are not going to increase his payout for the first term to 110,000 Baht from 100,000 Baht.

Hence this example, is for only when the landlord only wants to give me 3 years or a 3+3 term. My real cost to get the additional term above the norm 10% increase per term was 3,333 per month for 9 years. No matter how you looked at it, in a prime location you were going to have a increase for the second and third term of at least 10% I don’t want it to be

Years 1-3 100,000 Baht per month

Years 3-6 150,000 Baht per month

Years 7-9 225,000 Baht per month

By the way, this even worked once when a landlord wanted 20% per term. I gave a tad more money in the first term, no increase in the second term and only a 10% increase in years 7-9 to have a net savings. Some Landlords look at only today and not the future, this example sometimes works with that kind of personality.

www.lawyer.th.com

I would have thought it better to get the 3+3+3 with 3 year rent reviews to a maximum of 10% increase and subject to a relevant percentage increase in the gross profit figure.

The problem with paying the landlord more up front when he has not asked for it is that he may think that you are a soft touch and he may try to get higher increases at a later date.

If the landlord and the purchaser cannot agree, then there are many more business to look at...or even start one up from scratch.

[rishi]

To start a business from scratch with the right identity in the right location with the right staff can be a winner.

Exactly! Good research and a lot of consideration and taking one step at a time can make it - without middlemen.

[DJ_Illusion]

The problem with paying the landlord more up front when he has not asked for it is that he may think that you are a soft touch and he may try to get higher increases at a later date.

If the landlord and the purchaser cannot agree, then there are many more business to look at...or even start one up from scratch.

Is it Possible to start one up from scratch in Thailand ? I heard Foreigners are not alowd to own land nor Solely own the property on it in thailand true or false?

[Heng]

True, but chances are you don't have enough to purchase your location (for most high foot traffic or main artery road/drive by businesses) anyway. You can start from scratch by renting (although myself, I'd never recommend doing that).

[Tolley]

There is a lot of negative comments about doing business in Thailand and there is some justification for it.

However I think something like 80 percent of small business go broke in Australia in the first 18 months.

Any small business is a big risk that is for sure no matter where you do it.

In Thailand you obviously have a lot of other things to consider that could be barriers to success. ie legal system, culture, language etc

Now if you throw into the mix the fact that many people who try to start businesses in Thailand have no previous experience then you are already making the odds very hard to succeed.

Also many try to mak money in the nightlife industry which is a very risky area to do business.

I know a few people who have made good money in Thailand but they were not involved in the nightlife industry. eg dental clinics, franchises, health services, export, and the big one is outsourcing where Thailand is being used for its cheaper labour and infrastructure costs.

[Sunbelt Asia]

I would have thought it better to get the 3+3+3 with 3 year rent reviews to a maximum of 10% increase and subject to a relevant percentage increase in the gross profit figure.

I disagree on the gross profit scenario and now I have the landlord looking at my books and easy for him to say I'm cheating him with it tied up in courts.

Most landlords want 10-20% so if I can get it at a max of 10%, I'm happy. Although I still put wording in that it can be negotiated, etc. with the cap of 10% increase.

The problem with paying the landlord more up front when he has not asked for it is that he may think that you are a soft touch and he may try to get higher increases at a later date.

The lease has the max increase already in it. He can't raise it higher than this.

If the landlord and the purchaser cannot agree, then there are many more business to look at...or even start one up from scratch.

100% agree. The lease is the business with some businesses. A number of good locations turned out to be a pass as the conditions we demanded could not be negotiated to what we wanted. It was then “ Next”...

www.lawyer.th.com

[Digger]

Until you have run a business, you cannot underestimate the importance of cashflow - its easy to say well, I have XXX,000, baht in the bank account - that will keep me running for XX months - however the reality is that cash registers ringing from day one is critical. If u have no customers, staff get complacent, they cannot practice what you teach them, they leave fearing your going to go broke - lots of issues arise due to these types of problems. - not least of all with your own self confidence. The costs of having a business start from day one regardless of if you have any customers - you need to pay staff, pay for stock (and turn that stock if its perishable), pay rent, etc etc

For example, if you buy a business, you can see what revenues are the base - if you feel its underdeveloped, your skills can be put to the test by lifting the sales through innovation, understanding the customer etc. However it all depends on the financial price on offer.

If your looking at a nightlife type business, you need to get either big dollars behind you for brand building and marketing or work on developing the marketing on the cheap by using the customers you already have - I have seen countless good businesses go under because they do not understand the importance of marketing - just opening the doors on a new business is not enough - you have to go out and get them in and spending money and people go where other people are going.

FYI, a lot of businesses offered for sale by Sunbelt seem to be reasonably priced, some not so - ultimately it depends of the value to the buyer - i.e if the location is right and the lease favourable, you could do well buying a poor business just for the benefit of that lease, but remember the importance of cashflow - it is so critical - assets dont generate an income - its the cash going into the cash register that mean the success or failure of a business.

[Sunbelt Asia]

Although you disagree 100% with starting a business the fact remains that all successful businesses to-day were once start up businesses or extensions of start up businesses.

Yes, you are correct. Even Starbucks, KFC and McDonalds.were start ups that were for sale and then acquired.

The point is, imagine if it was possible to be at a horse track and be able to put your bet on a horse after its passed the first 1/8 mile instead of before the race. You of course have an advantage if somehow you were able to bet on the best looking horse after the first 1/8 mile.

As a different analogy, imagine 10 people all with a business plan. All of them speculate that they will make a profit in the second year. Come back in two years and you will find that some have done so, some have broken even and others failed. There are no guarantees in business, but the odds of success would be dramatically higher if you were able to look at those same businesses after two years and then pick the one that’s doing well, and is only selling because of a human reason. You would then certainly have an advantage.

On a start up, you have many unknowns. You may do very well, but the odds are not with you, and you would be very lucky to have spectacular results in the first two years. But it does happen. We have helped set up over 900 clients in business for start ups, and I estimate 80% are still in business. Only a few have skyrocketed from day one however.

On the other hand with the over 500 existing businesses that were acquired, most are doing ok and many more are making over 200,000 baht in Owners Discretionary Cash per month. I know a couple that are earning over a million baht net per month.

To take over an existing business can be costly.

It just depends how you determine costly. If somebody starts a business and is in operation for six months then fails, this was costly. If the same person took the same money invested in a business and was able to get a 50 % ROI per year then this certainly would not be costly. By the way, did you hear about the guys who started a bar in Pattaya? They spent so much money on the build out that once they were open, they only stayed open for a grand total of three days, as they could not pay the rent! They ran out of money. This would never happen with an existing business as you would know your costs up front and what your budget is.

Also, some sellers will do owner financing and you are able to get in the business at a fraction of the cost to start up.

Ask most any professional restaurateur, and he or she will tell you that it is usually cheaper to take over an existing restaurant than it is to start from scratch, because of the build out costs and equipment. One client e-mailed me two weeks ago to invite me to his grand opening. He stated “By the way, you were right. This bar is costing me much more than it would have cost to buy an existing nightclub. I had no idea of the costs of the equipment and construction.”

To take on existing staff can be counter productive.

You are not required to take on the existing staff (unless the seller makes this a condition, but 90% of the time this would not be an issue).

However, if a buyer stated this with regard to the staff, unless this business was being valued as an equipment sale, I would suggest they look at another business. Why would they be looking to change the staff? This type of person is either looking at the wrong business, or will fail. You don’t make drastic changes on an existing business; it’s like a watch – if it works, don‘t fix it. If the buyer wants to fix something, he or she needs to look at an equipment asset sale, not a “cash flow model” business.

To train your own staff to work to your methods can be more productive.

Once again, this buyer had better look to buy an asset sale, or start from scratch. The odds are high that the reason the business is successful is because of the staff. Once again the warning would come up “Don’t screw up a good business!”

To start a business from scratch with the right identity in the right location with the right staff can be a winner.

100% correct.

Although in most all cases, the good locations don’t have a “For Rent” sign. You have to acquire an existing business to get the best locations.

As I said in the market in which he is looking to operate there are many failures....you’ve only to look at the bars etc in Pattaya, which are continually being marketed and continually fail

Agreed. As I have stated over and over again, the beer bar business in Pattaya is not one to enter if you are interested in making money. If it’s for a hobby, or for pride of ownership, then that’s another story.

.

Having said that there are good businesses out there to be purchased...it’s down to the individual purchaser as to how he/she wishes to enter the market....i.e. new business or existing one.

I agree with this statement and this post was not solely for the OP. I was clearing up the statement you had that “existing businesses can be millstones”. Thanks for being open minded that there are good businesses that can be acquired.

www.sunbeltasia.com

[Sunbelt Asia]

If your looking at a nightlife type business, you need to get either big dollars behind you for brand building and marketing or work on developing the marketing on the cheap by using the customers you already have - I have seen countless good businesses go under because they do not understand the importance of marketing - just opening the doors on a new business is not enough - you have to go out and get them in and spending money and people go where other people are going.

Good stuff Digger. Couldn’t say it better myself. How many businesses burn up the marketing budget during the leasehold improvements because the contractors went over budget? They say oh well, I will get it back once I open up. But if no one knows who they are when they open, they open to a empty place. It’s easy to spend money but much harder to make it. It can become a big drain. Guys go where the good-looking girls are. The good looking girls go where they can make money which means a busy club.

Huge advantage to have that branding and you have the gals and guys from the day you take over. You can do it with a start up but you better be paying a higher salary and get a buzzzz going. Those girls will only stay for a short period if the place is dead.

FYI, a lot of businesses offered for sale by Sunbelt seem to be reasonably priced, some not so - ultimately it depends of the value to the buyer - i.e if the location is right and the lease favourable, you could do well buying a poor business just for the benefit of that lease, but remember the importance of cashflow - it is so critical - assets dont generate an income - its the cash going into the cash register that mean the success or failure of a business.

I agree. In the restaurant business, in the first year, location is 60% of the equation; the other 40% is service, food and atmosphere. You have a bad location you may have the perfect everything but its going to take people a while to make it a destination. It just does not happen overnight.

My wife bought out a retail store business that was doing poorly and turned it into a restaurant that is in a GREAT location. She invested over 5.5 million Baht and the first month was a loss, now 2 years later; it’s doing 5 times what the monthly gross was that first month. I shudder to think how long she could have handled emotionally having losses past the first month and it certainly would of happen if it was a destination. Now it gets mention on the forums for good food and has word of mouth advertising. If she ever wanted to sell, it’s a BIG advantage now versus that first month or even first year. Sales are 100% higher for the same time period last year. Ironically if I put a value on the business even with the growth and profit of 200,000 Baht per month, the fair market would be 6 million Baht with an asking price of 7.2 million Baht. Only 500,000 Baht more for the fair market investment than what she invested from scratch. When you count the stress of losing money the first month, then this is nothing. It’s not for sale but if it was, the buyer on this business would be the lucky one.

www.sunbeltasia.com

[ThaiPauly]

Good reply "G" I thought much of what you said about doing business with Thais is true in that it is difficult in the extreme.

Most people know my story. I had a chain of magazines in the UK and tried to replicate the same model here with DISASTEROUS results Why? Because Thais would just not make buying decisions , my company did 99.9% of its business on the telephone in the UK out here the situation was reversed completely...you may be lucky to secure an appointment on the phone, let alone a sale... then when you get in front of them with something that is obviously going to do them good...they won't buy in case it does not make them extra money and then they would loose face. But they never close the door, just leave your foot stuck in it, but you are going nowhere.

After being burnt a few times out here I brought my Wife a restaurant in the full knowledge that whatever was written in the ledger was complete <deleted>, but the price was so low that we thought that we could build it up from a virtual scratch start and we are now turning over 300% more than when we first opened it and changed the name.

The books did indeed turn out to be nothing more than complete fantasy, but I have to look at them and laugh, however if I was making my buying decision based on the books I would have been bitterly dissappointed.

I guess my point is that I would never again depend on Thais to support any business or try and do any kind of business with them (we dont stop Thais from eating at our restaurant of course ,but they walk in off the street,) I would never CHASE their business, however I will try to attract Foreigners through a marketing campaign.

So just bear in mind what some of the brighter posters have said here and you could be OK.

Oh and I think you are absolutley right to ask your questions on this forum... if people can help to steer your ship in the right direction then its happiness all round. But there will always be folks that want to see you fail.... thats just human nature unfortunatley,

Get all the advice you can them assemble it to make THE RIGHT decision.

Good Luck

TP

Edited April 6, 2006 by ThaiPauly

[meadish_sweetball]

It depends where you look though. I know a fair few foreigners who make a decent profit here - in most cases nothing extravagant, but definitely enough to live very comfortably. But it is not for everyone. It takes connections, the right mindset, a willingness to adapt to a certain degree, a long series of trial and error situations, an angel's patience and a strong determination. And at the outset, as with business elsewhere, a solid business idea.

Make a serious effort at understanding the culture. Observe and ask, and never make the mistake of drawing too far-reaching conclusions based on hearsay or a few negative experiences. Look for solutions instead of complaining. It does not take Einstein to identify problems, it is the people who succeed despite the problems that you should ask for advice.

meadish, first, thanks for the good post.

I have a business here and making enough to support myself with a reasonable lifestyle. I have taken a few turns and identified those areas which for me might lead to bankruptcy, versus those that can be profitable.

I have not been here for many years, but can identify some patterns.

Although I have some Thai clients, I mostly stay away from dealing with Thai companies, or Thai customers in general. I had many business meetings with major companies in Thailand, most were fruitless. I found the pace they take (or don't take) decisions extremely frustrating. Finally, after months of dragging things, giving you a decision, only to change their mind a week later. And this is not some small condo owner I speak of, but Public Thai companies.

I don't go for the average Thai consumer, as I prefer to stay away from the ruthless price wars going on here at all levels.

I do not compete with Thais in their field. Mostly their expenses are lower. Mostly they don't need to handle they same visa-wp-company overhead. They don't have to rely on a sales person for customers who don't speak english. I can speak Thai to some extent, but not enough for business negotiations.

For the services we provide, I sell quality, never tries to be the cheapest. In the Thai market, price is more meaningful than quality - and these are words I heard from Thai managers, not only my perspective.

For the products we provide, I do not aim for the Thai market at all. I found that I can succeed with much better results selling to other markets. They can take timely decisions. They are not scared of innovation and are much more open to new ideas.

----

I make a living, but in relation to the effort I put into it, I expect much more.

- I personally know 2 very successful business people, one of them with a solid business experience of over 20 years. They are here negotiating with Thai companies for around two years, still cannot close a deal. And they have a great service successful in many other countries.

- I personally know other people with good experience in their field being here and still trying to break even. Again, those people were very successful elsewhere. And I am not talking about the average "BillyBoy" coming to start a beer bar in Pattaya or Samui.

I am yet to see a foreign entrepreneur coming here and successfully selling to Thais. Those on this board claiming success in this field are either Thais, "luk krung"s or have a Thai spouse as the actual manager of the business.

I agree with all your general conclusions.

[Sunbelt Asia]

I am yet to see a foreign entrepreneur coming here and successfully selling to Thais. Those on this board claiming success in this field are either Thais, "luk krung"s or have a Thai spouse as the actual manager of the business.

My first year in business in Thailand, the numbers were staggering. I can laugh about it now but back then it was stress city! We had 116 Thais on average look at a business and only one would acquire it.

I was used to in the States, 40 prospective buyers to equal one acquisition.

The foreigner prospective buyers in Thailand were the same as other countries. 1 in 40.

It to be frank was embarrassing when telling the Head Office in the States these numbers. To top if off, everything was double. All listings had to be in Thai and English and translated.

I did lot of research and found that Thai offers would be coming in much higher on a 1 year old restaurant than a restaurant that had been around 15 years. It was because they felt the assets were in better condition on a newer business. Ironically they were putting bids in when a business had many customers. They understood that customers were important but that didn't enter into the bid.

5 years later, Thai prospective buyers ratio is the same as Foreign prospective buyers... 1 in 40.

What happen?

Thai staff from 5 years ago, now know they need to educate the Thai buyer at first. Plus they have now build up a good referral base. They explain to the Thai buyer, we have mostly cash flow model businesses and not pure equipment asset businesses. You can't simply go in and value a successful business if it was in liquidation mode at a auction, you need to look at the books and do due diligence. If it has customers, the seller expects to be paid for their hard work getting it to that level. Business is all about cash flow.

By the way, one business that does much better in Thailand with a foreigner involved. Is a Italian restaurant. My wife is bidding on a restaurant and the Foreign seller will only sell it if she has a Foreigner greeting people.

I was very surprised, so did a recent survey asking 50 different Thais" When eating at a Italian restaurant would you prefer a Foreigner or Thai greeting you" 42 out of the 50 said "Foreigner" Why I asked? " The food will taste better! "

www.sunbeltasia.com

[LivinLOS]

Well I have just read through the thread and there were post after post I wanted to comment on.. As it is I have to say I side with the naysayers, I have now decided never to do business in Thailand at all..

This is from someone who had thier first company formed at 14, have had 9 days employment (for others) in my life as I have always been my own boss.. Ended up with a multi national and 400 employees in my early 20's and retired for life by mid / late 20's.. Been a director of probably 30 companies some of which imploded but always were worth a punt. Of those Businesses the most profitable and biggest of them was done in countries where I didnt speak the language and didnt know local rules laws customs or have any contacts, basically it never was enough to hold me back before.

Even with that kind of history in business the longer I stay the more I just see that not only are the odds stacked against you at every turn but the returns and rewards are so pitiful even if it works.. I started a online activity and turned 7k USD profits in the first 3 days, I know guys buying 2 mil bar leases (for 2 years !! and the price being almost but not quite more than you can possibly afford is how I see it all the time also) who dont make that in 2 or 3 months.. I could make more money playing poker online than most of the foolish attempts at business in the nightlife trade I see..

The one annoying part is it would be fun to have a business simply for the activity, it would employ people, I would have something to focus on but the ideas I float instantly hit some farang roadblock. Case in point I had started to work on an idea of a local WiMAX hotspot for both long term expats broadband and temporary tourist access.. Its a goldmine on paper but immediately I am told that it would get classed as an ISP (Why doesnt starbucks ??) and it needs an ISP license.. Initial enquiries were 'farang business forget it' maybe I allow the obstacles put me off but why waste my time ?? Money isnt the issue its for the fun of it.. If I am going to have bigger obstacles put in my way than a Thai business then why pay taxes and employ them. Just enjoy the pool / climate / food / girls and dont give back, seems thats how they want it.. Thailand as a premier place to do business ?? Please..

I am guessing DJ illusion is Frankcyber ?? As the only 3 story club I know of in town was the club Pirate that never really took off.. Otherwise there are no 3 story clubs that I know of..

Edited April 8, 2006 by LivinLOS

[jdinasia]

LOL ^^^^^

[LivinLOS]

Care to elaborate..

[Sunbelt Asia]

I know guys buying 2 mil bar leases (for 2 years !! and the price being almost but not quite more than you can possibly afford is how I see it all the time also) who dont make that in 2 or 3 months.. I could make more money playing poker online than most of the foolish attempts at business in the nightlife trade I see..\

Nightlife trade is very profitable for some entrepreneurs and others it is a black hole especially many that have a hard time is if it’s a beer bar in Pattaya. Very profitable is over 100% ROI in 18 months which has been achieved. Not everyone should play poker against you but they do and not everyone should open a bar but they still do. If they can afford the lost if it goes south, either in playing poker or owning a bar, but will has lots of fun, then go for it. Life is too short if you have some mad money and this is your dream to play in the World Series of Poker or owning a bar. Look at Chris Moneymaker!

By the way a myth exist that money is the key motivator that buyers seek to own their own business. Most studies indicate that money is somewhere below the midway point of the list of reasons people are interested in a self-owned business. Those who go into business for themselves and/or buy a business want to run their own show, be their own boss and build something for themselves. Money is the by-product (hopefully) of having the opportunity to achieve business success on their own terms.

If money doesn't provide the driving force behind owning a business--what does?

The following survey shows the real reasons for wanting to be a part of the independent business scene:

#1 Reason: Pride in ownership 2. Being the Boss/Being in control 3. Freedom 4. Flexibility of hours 5. Self-reliance 6. Customer contact 7. Income/Making Money 8. Employee contact 9. Recognition 10. Privacy/ No one looking over their shoulder 11. Security of the future 12. Status

The one annoying part is it would be fun to have a business simply for the activity, it would employ people, I would have something to focus on but the ideas I float instantly hit some farang roadblock.

Have any Software related business plans? What to help Thailand? You can get BOI promotion with just a 1 million Baht register company. Get approval before you even set up the Thai company where you will have 100% ownership as a foreigner. http://www.boi.go.th/english/about/section5.pdf Scroll down to 5.8 Software. This is classified as a priority activity and crucial to the Country’s development. You can get a 8 year Tax Holiday on corporate income tax and exempt duty tax on import of machinery.

www.sunbeltasia.com

[~G~]

Have any Software related business plans? What to help Thailand? You can get BOI promotion with just a 1 million Baht register company.

Yes, the BOI deal is great. I know two people who made a much bigger insvestment than that. Paid plenty of cash for the lawyers to handle the BOI process (yes, I know, Sunbelt is probably cheaper), and got the BOI easily.

You can get a 8 year Tax Holiday on corporate income tax and exempt duty tax on import of machinery.

That's great. Unfortunetaly, these guys are still operating for the second year with no profits whatsoever, as Thai companies are pretty reluctant to cooperate with them. I sincerely hope they'll have some profits before the 8 years end, to make use of this great benefit! What are some petty lawyer fees for BOI, when you've got millions scheduled to come in your business plan!

[~G~]

where you will have 100% ownership as a foreigner.

Yes. that's another great benefit of BOI approval. But, you know what the funny thing is? These guys are now pratically begging prominent Thais to join them in their business so they can show a Thai Director and Shareholder in the company when going to negotiate with Thailand's large bodies!

[DJ_Illusion]

This BOI sounds good so how about if i was to setup a company for anything that lies under this BIO get excempted from tax for 8 years, my company will be 100% foreign owned and then apply for a pub licence ? would it work like that?

Which brings me to the subject about a pub licence, is there such thing as pub/bar licence in thailand ? as far as i know there is alcohol licence and cigarettes licence which was as far as i remember from the revenue department, what about the pub/bar licence?

[Sunbelt Asia]

Paid plenty of cash for the lawyers to handle the BOI process (yes, I know, Sunbelt is probably cheaper), and got the BOI easily.

We have handled two BOI’s which were approved recently. One project is for a retirement home/hotel for 900 million Baht and pvc pipe mfg for 498 million Baht. Several other large projects as well being applied for with the objective of housing developments, both are more than 1 Billion Baht register capital. Most people think they have to be this large to get BOI when in fact, they will accept 1 million Baht register capital as well.

You are correct; the fees were probably higher than our firm for BOI. Even though big investors like to save money, most important concern to them was getting approved and I’m proud to say, that is why they chose us. The one lawyer from the U.A.E firm last month over dinner said he was promoted because he persuaded his firm to use us. He was a very happy man indeed!

www.lawyer.th.com

[Sunbelt Asia]

This BOI sounds good so how about if i was to setup a company for anything that lies under this BIO get excempted from tax for 8 years, my company will be 100% foreign owned and then apply for a pub licence ? would it work like that?

As you can see, owning a bar is not on the list...

The following activities have been designated as priority activities.

6.1 Agriculture and agricultural products as specified in Section 1 of the Investment Promotion List

6.2 Projects with direct involvement in technological and human resource development, specifically the following

6.2.1 Research and development (Category 7.12)

6.2.2 Scientific laboratories (Category 7.13)

6.2.3 Calibration services (Category 7.14)

6.2.4 Human resource development (Category 7.15)

6.3 Infrastructure, public utilities and basic services, specifically the following

6.3.1 Public utilities and basic services (Category 7.1)

6.3.2 Mass transit systems and transportation of bulk goods (Category 7.2)

6.4 Environmental protection and conservation, specifically the following

6.4.1 Industrial zones for environmental preservation (Category 7.5.6)

6.4.2 Waste water treatment, disposal services of refuse, industrial waste or toxic chemicals (Category 7.16)

6.5 Targeted industries, specifically the following

6.5.1 Manufacture of steel casting using induction furnace (Category 2.12)

6.5.2 Manufacture of forged steel parts (Category 2.13)

6.5.3 Manufacture of machinery and equipment (Category 4.2), specifically the following:

(1) Manufacture of molds and dies and parts

(2) Manufacture of jigs and fixtures

(3) Manufacture of industrial machinery, specifically the following

• Turning Machines

• Drilling Machines

• Milling Machines

• Grinding Machines

• Machine Centers

• Gear Cutting & Finish Machines

• Die Sinking EDMs

• Wire EDMs

• Laser Beam Machines

• Plasma Arc Cutting Machines

• Electron Beam Machines

• Broaching Machines

(4) Manufacture of part and equipment for high precision machining processes, namely, cutting, milling, turning, grooving, shaving, grinding, polishing and threading.

6.5.4 Manufacture of sintered products (Category 4.3)

6.5.5 Manufacture or repair of aircraft and aircraft parts (Category 4.7)

6.5.6 Manufacture of vehicle parts (Category 4.8), specifically the following

(1) Manufacture of ABS

(2) Manufacture of substrate for catalytic converters

(3) Manufacture of electronic fuel injection systems

6.5.7 Heat treatment (Category 4.12)

6.5.8 Manufacture of material for microelectronics (Category 5.6)

6.5.9 Electronic design (Category 5.7)

6.5.10 Software (Category 5.8)

6.5.11 Software parks (Category 7.5)

6.5.12 International distribution centers (Category 7.7)

Which brings me to the subject about a pub licence, is there such thing as pub/bar licence in thailand ? as far as i know there is alcohol licence and cigarettes licence which was as far as i remember from the revenue department, what about the pub/bar licence?

This is all you'll need to sell alcohol. The question is too how long in the night? If your bar is in the Ratchada, RCA and Patpong zone you can get a entertainment license as well. This may allow you to stay open till 2 a.m.

www.lawyer.th.com

[benw10]

Do not trust anyone......and be extremely sceptical about the business figures which are presented to you........

Very true

.

You are far better starting a new business from scratch with your own new ideas than buying a so called established business which has more than likely run it`s course and is now struggling.

Another newbie witha little cash about to jump in to the buisness quagmire of bkk, i found this one entry the most encouraging, i had more exciting plans, but i think a bar in Silom would set me up in bkk giving me the time and experience to learn and develop coping skills in this highly competitive market and exhilirating city i hope to make mt home.

any advice, legal or otherwise most welcome.

[sting01]

One question, specific one, to Sunbelt.

What exactly mean the word sofware? The meaning is usually broad, going from the desktop application, as an instant messager, to some big one as MsOffice, Staroffice, Oracle, Mysql.

Do the fact to develop GNU licenced programs is acceptable? Does the fact to create softs for internet usage (online image processors for exemple) is acceptable? Does the fact to earn money not directly (mean do not sell the product) but not directly (as a subscription for a site that use one of those sofwares) is acceptable?

Sofware can mean an online game (you got it for free, but have to pay to play online, I forgot the name but very popular here) or a desktop application (Excell for exemple). It imply also various technologies as VB6, or Java, or eventually PErl/php. So what are the exact need to fit BOI ?

[simon43]

http://www.boi.go.th/english/about/section5.pdf

I cant seem to resolve this pdf. Just get a blank page...Do other people have success with downloading this?

Although I'm 'busy' with some construction projects in Phuket, my UK business and 20 years experience is with software/comms development, so I still have an interest in startying up some new business in Phuket in this sector. (Well, thats if I ever manage to get a decent internet connection in Phuket...)

Simon

[sting01]

http://www.boi.go.th/english/about/section5.pdf

I cant seem to resolve this pdf. Just get a blank page...Do other people have success with downloading this?

Although I'm 'busy' with some construction projects in Phuket, my UK business and 20 years experience is with software/comms development, so I still have an interest in startying up some new business in Phuket in this sector. (Well, thats if I ever manage to get a decent internet connection in Phuket...)

Simon

http://www.caprichosdemujer.com/section5.pdf

I just installed it on the server where I am currently working. It's free for download untill 8 pm bkk time today, after as I will have finish my work I will delete it, hope it help. I precise to avoid disrespectfull comments, that I am doing the CMS, I am not the site owner. I also invite people to follow ONLY the link I have given, the whole site is shopping card made by a shop in florida. As I am currently logged in the FTP, I simply copied the file to help those who want to read it.

@Simon, about software developents, I had an idea/concept that I am trying to put on paper(read make it presentable). Do you mind if I send you that when ready (end of the week certainly)? To precise , it's not a call for financement, but simply something too big for me , it seems to me necessary to have expertise on other fields than mine to make it success.

[simon43]

hi Sting01, I downloaded the pdf fine - thanks. Just PM me re your idea.

Cheers - Simon

[Sunbelt Asia]

What exactly mean the word sofware? The meaning is usually broad, going from the desktop application, as an instant messager, to some big one as MsOffice, Staroffice, Oracle, Mysql.

As you were having some probs with the link will just print the list here...

Software:

• Enterprise Software

• Digital Content which are included;

(1) Animation, Cartoons & Characters

(2) Computer-generated Imagery

(3) Web-based Applications

(4) Interactive Applications

(5) Games: incl. Windows-based, Mobile Platform, Console, PDA, Online Games, Massive Multi-Player Online Games

(6) Wireless Location-Based service Content

(7) Visual Effects

(8) Multimedia Video Conferencing Application

(9) E-Learning Content via Broadband and Multimedia

(10) Computer-Aided Instruction

• Embedded Software

In my opinion, the BOI is VERY liberal with applications that are Software related.

That's great. Unfortunetaly, these guys are still operating for the second year with no profits whatsoever, as Thai companies are pretty reluctant to cooperate with them. I sincerely hope they'll have some profits before the 8 years end, to make use of this great benefit!

They actually have 13 years to use these forward losses under BOI. As the 5 years forward losses kicks in only after the tax Holiday runs out. They are able to choose what year they want to apply these losses as well. Hence if they make a profit for the next 6 years they would have zero tax. In years 9-13 they would apply this loss in years 1 and 2 to offset any tax owed.

But, you know what the funny thing is? These guys are now pratically begging prominent Thais to join them in their business so they can show a Thai Director and Shareholder in the company when going to negotiate with Thailand's large bodies!

You know what is funnier? Thais feel it is a big advantage to have foreigners as directors and shareholders. I know one guy that is on boards of six different companies. He is just a figurehead as a ‘white face” and gets paid to do so.

I often felt it was just an excuse if someone felt that way. But I do feel, if they really believe this, when they get the foreigner or Thai as the director, it does work in most cases, because they believed it and ultimately made a better presentation of their product.

www.lawyer.th.com

[~G~]

I often felt it was just an excuse if someone felt that way. But I do feel, if they really believe this, when they get the foreigner or Thai as the director, it does work in most cases, because they believed it and ultimately made a better presentation of their product.

After two years of trying almost everything else, they felt that might be helpful. Obviously not any Thai, but someone with the right connections, which might not be so important when you sell sandwitches, but are vital if the business depends on the active cooporation of at least one major Thai company licensed to operate in a certain field.

Edited April 18, 2006 by ~G~