Is Doing Business In Thailand Even Worth It?

[Sunbelt Asia]

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.

Have they ever thought of going global ? I know of one company that is BOI that has done this and is growing by leaps and bounds...

http://www.mustang-technologies.com/About_...anyOverview.htm

Just saw this from another post...

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.

Bar in Silom? Pretty tough odds of being a success as for a profitable venture but it can happen. If it is risk capital, then live your dream.

www.lawyer.th.com

[~G~]

Have they ever thought of going global ? I know of one company that is BOI that has done this and is growing by leaps and bounds...

http://www.mustang-technologies.com/About_...anyOverview.htm

They are global, that system was implemented in several countries with great success. They have the rights for several countries in the region. Decided to start with Thailand, and that's were it got stuck!

[Sunbelt Asia]

Have they ever thought of going global ? I know of one company that is BOI that has done this and is growing by leaps and bounds...

http://www.mustang-technologies.com/About_...anyOverview.htm

They are global, that system was implemented in several countries with great success. They have the rights for several countries in the region. Decided to start with Thailand, and that's were it got stuck!

Think you are misunderstanding what I mean by going global. It’s using the cheap labor here and the company is getting paid in euros and dollars from the USA and Europe by providing their outsourcing. In my definition, it’s not being global by having offices around the world.

If this company does that, no one from the West could care less if they have a Thai as a director or shareholder. By concentrating on Thai companies, I agree this can be a tough market. Most Thai companies only look at the cost factor.

Thailand has cheaper labor costs and office rents than Singapore, Hong Kong and Korea. It is a good regional base with the infrastructure to do outsourcing.

www.lawyer.th.com

[~G~]

Think you are misunderstanding what I mean by going global. It’s using the cheap labor here and the company is getting paid in euros and dollars from the USA and Europe by providing their outsourcing. In my definition, it’s not being global by having offices around the world.

If this company does that, no one from the West could care less if they have a Thai as a director or shareholder. By concentrating on Thai companies, I agree this can be a tough market. Most Thai companies only look at the cost factor.

Thailand has cheaper labor costs and office rents than Singapore, Hong Kong and Korea. It is a good regional base with the infrastructure to do outsourcing.

I am not sure whether this is the right thread to discuss whether Thailand is a leading place for software outsourcing, compared to India or East Europe for example (but hey, you started it )

Thailand has one major problem when it comes to supplying outsourced services, which is the level of English.

Take Data Entry. You will not find very cheap labour with good enough English. This will simply not happen here. In Thailand, good English = expensive workforce. You know it, that's why your lawyers don't speak English.

Take Programming. Can be done, but again language problem plus much higher costs than India. On average you might pay 10K extra here only for good english, which is a given for a University graduate in India. Degree and no reasonable English? It is sadly very normal in Thailand, an exception in its competitors.

Software outsourcing can be done here. But it requires a layer of (expensive) project managers fluent in both Thai and English. That is probably how Mustang are doing it.

Anyway, it is not relevant to that specific business which has a finished system, whose revenues are coming from comissions resulting from mass usage of the system rather than from providing development services. In that case, the technical staff is very small so that lower wages and office costs do not play a significant part in the expenses. Marketing does. They came here to sell to the Thai market, that what didn't work.

Edited April 18, 2006 by ~G~

[sting01]

http://www.mustang-technologies.com/About_...anyOverview.htm

sound old website to me, the news are from 2003, or maybe that is true who is caching the pages (long latency I suppose).

The guys are doing what they do in india. So yes G have the right point : the language skills.

Personally I never seen the interest to do what others are currently doing ... to much concurence. By experience I know it's better to search and find a 'niche market'. Outsourcing? Well anytime I come in TV I speak about outsourcing, because that is the way to go. But not read take the outsourcing project at $ 50M, Thailand do not have any infrasructures to allow it (infrastructure run from the social laws to the international bandwidth including the language border with the people here and the cultural issues).

On the other hand, there is possible to get a full load of craps projects, cheap labor so cheap projects, that are actually send in india and romania.

So my own opinion (but it's just that) is a society as MT will be hardly viable on the long run if only existing in thailand, mean if administrative people AND coders are here. Why? well, what about the bandwith in Phuket? What about the international bandwith? What about the legal not working days (vacations, days for illness, days for spiritualy improve yourself ....). I really wonder what could be Sun microsystem answer if one day someone tell them : the applet is not lade becaus the coders went to a buddist monastry' . I know that is usual in the business for yuppies tired to earn millions, but I doubt it can be possible on the long run.

Or they use external people, western coders who choosed to live here. But the salaries should not be small.

[Sunbelt Asia]

Yes I know India and Eastern Europe gets lots of outsourcing projects because of cheap labor with English skills, Thailand can not compete at the barebones level.

But Thailand can compete with getting project managers from India or Eastern Europe with experience. Because these PM's would rather work and live here than in India. Why do people work at a much lower level than they could get at other countries? Because of the lifestyle this country offers. The presentation then is made that the work is not cheap but the quality of the work makes up for it.

In order to win you don't have to get the whole loaf of bread just 70-80% of the margin.

However, to be frank. This case just happen less than 2 hours ago. A client states I have cash in the bank that I need to get outside the country and I don't want to pay 15% withholding tax. Any way around this?

He says " I can't take this as a salary as I will be paying 37% tax." I responded that this was only on 4 million Baht or higher for the year. He responds "I'm already at 30% as I take 300,000 Baht salary a month!"

Now I remember this guy. He is from the Scandinavian area and arrived around two years ago with just a million Baht. Think I remember him more as he was a very nervous type. Asked a zillion and one questions. He said if I lose this million Baht, I will go back home. He set up shop in Phuket. No idea how he ever worked around the lousy Internet connections in Phuket but obviously he has done well. He has been doing search engine optimization for clients.( Looking at his website, looks like none of the clients were in Thailand but located in Europe)

However the shocker is he tells me he is going to Romania to set up an office there! I did not have time to go in more detail as I was busy with another client but I certainly look forward to talking to him again.

Romania over Thailand? I don’t think so, not for me. But for a guy that has done very well, he is making that choice!

www.lawyer.th.com

[sting01]

Yes I know India and Eastern Europe gets lots of outsourcing projects because of cheap labor with English skills, Thailand can not compete at the barebones level.

But Thailand can compete with getting project managers from India or Eastern Europe with experience. Because these PM's would rather work and live here than in India. Why do people work at a much lower level than they could get at other countries? Because of the lifestyle this country offers. The presentation then is made that the work is not cheap but the quality of the work makes up for it.

In order to win you don't have to get the whole loaf of bread just 70-80% of the margin.

However, to be frank. This case just happen less than 2 hours ago. A client states I have cash in the bank that I need to get outside the country and I don't want to pay 15% withholding tax. Any way around this?

He says " I can't take this as a salary as I will be paying 37% tax." I responded that this was only on 4 million Baht or higher for the year. He responds "I'm already at 30% as I take 300,000 Baht salary a month!"

Now I remember this guy. He is from the Scandinavian area and arrived around two years ago with just a million Baht. Think I remember him more as he was a very nervous type. Asked a zillion and one questions. He said if I lose this million Baht, I will go back home. He set up shop in Phuket. No idea how he ever worked around the lousy Internet connections in Phuket but obviously he has done well. He has been doing search engine optimization for clients.( Looking at his website, looks like none of the clients were in Thailand but located in Europe)

However the shocker is he tells me he is going to Romania to set up an office there! I did not have time to go in more detail as I was busy with another client but I certainly look forward to talking to him again.

Romania over Thailand? I don’t think so, not for me. But for a guy that has done very well, he is making that choice!

www.lawyer.th.com

Romanania = well educated for western european standart (people are fluent in 3 languages), with a population hightly skilled in IT.

My main concurents are not indian coders, mostly they got the boot quickly, but Romanians coders, who have the same skills as I and the same wages. But they do speak well formated english, and they are willing to success (read work hard).

Yes, mostly IT society go there to select coders. But btw us, live there .... Who want to live in Timisoara? Or in Carpathia mountains?

But I am glad to hear than somewhere I am not that fool and what you way seems confirming what I thought (or tried to explain).

P.S. I think Thailand can compete and certainly win. But there is things to consider, things that are not how much of millions it can give in 3 or 5 years. It need another way to approach the problem, if not the game is over before to start it. There is several advantages for thailand, but they are not used, or misused. Anyway it's a huge subject, and not sure I have the full picture.

Edited April 18, 2006 by sting01

[~G~]

It seems as if this guy simply wants to quickly withdraw the money and leave, hence the 300K withdrawals. I will be quite surprised if he's doing over 300K a month from SEO services alone.

I was working for a software company abroad a few years ago, the company specialized in software for the Aviation field and was moderately successful. After 9-11, airlines had other concerns and the company closed down. The founder later opened a company in Romania and is doing very well.

As for the pleasantness of living in Thailand, it is a factor, but it cannot paint red figures in green.

[sting01]

It seems as if this guy simply wants to quickly withdraw the money and leave, hence the 300K withdrawals. I will be quite surprised if he's doing over 300K a month from SEO services alone.

I was working for a software company abroad a few years ago, the company specialized in software for the Aviation field and was moderately successful. After 9-11, airlines had other concerns and the company closed down. The founder later opened a company in Romania and is doing very well.

As for the pleasantness of living in Thailand, it is a factor, but it cannot paint red figures in green.

I do agree.

Some thoughts :

SEO is a particulary business in IT, mostly it's more abuse of customers than anything (my 2 cents, just that). So yes you can make money on it, but mostly it's one shoot client (they do not come back). I avoid it as the plague anyway, the rare time I did it, it was because the client was too big to let him going somewhere else, and it was the only case I asked for a formal contract (usually words are enought) describing clearly the needs and precising what are the goals and for how long.

I always considered the best way to go is to stress out on what I, my business, my location are different, and so what are related advantages.Thailand can be attractive, if the advantages are stress out (not sure it's correct to say that) or highlighted (Sunbelt noticed the central position for exemple)...Sophia Antipolis in France was created followed that concept. The main point to not forget is as you said a sunny weather will not change red number in a bank account. The way to go (Still my 2 cents) is to think from forward to back : What is final goal? Where are my potential/existing customers? How can I touch them? How can I distribuate my product? How can I mass product my products? How can I create my products? It will always be bottle necks at one point or another, but as long as they are clearly discovered, it's possible to fix the various bottlenecks.

[Sunbelt Asia]

It seems as if this guy simply wants to quickly withdraw the money and leave, hence the 300K withdrawals. I will be quite surprised if he's doing over 300K a month from SEO services alone.

This 300K salary was just a portion of the Owners Discretionary Cash the company was making. The reason why I know this, was he took a high salary per month for the first 6 months he was in business as a salary and then up it then to 300K per month. Now the reality is he could be anywhere Poland, USA or Thailand with his laptop. The only edge in Thailand was a nice lifestyle in some peoples eyes and lower cost and much less taxes than most of the Scandinavian countries.

I know another client who does translation of Japanese. He could be anywhere but lives like a King in Pattaya. He brought existing clients and referral business when he set up his business here the same as the search engine client.

As for the pleasantness of living in Thailand, it is a factor, but it cannot paint red figures in green.

That it can not.

The grass is always greener on the other side of the fence but if they just move to any other country. If they lost in Thailand, odds are very high they'll lose there. If they win here, the probability is high; they'll win there as well!

If you are an Entrepreneur in Thailand or Romania or India, you must be future oriented by being fast moving and flexible, willing to change quickly when something is not working. No matter where you are, you must be skilled at selling against your competitors by showing the difference and uniqueness in your products and services. Your friends should continually seek ways to offer their products and services in such a way that they're more attractive than anything else available.

They must be a problem solver and seek solutions to the roadblocks that inevitably arise wherever they are in the World. Not just say “I’m stuck in red" The bottom line, they must be focused on sales, cash flow and revenue at all times. If they have red ink with no hope in site, change direction. That must happen to win!

The bottom line put Bill Gates in Thailand or Romania or India or even in South Africa. He will make money. It’s not the country, it’s the person themselves that decides their own fate because a business plan is not a stagnant document. Instead, it is an ever-changing guide, which all the top Entrepreneurs adapt because they have to, to win!

You have spoken for them, but tell them" Failure is not an option!" they must adapt and then work harder than ever before. They must be the dreamer who sees mountains where now is just flat land; who sees great buildings where no buildings are as of yet; who sees the opportunity around every corner, in every soi, in every square inch of misery and then use their vision and creativity to change that business plan to make it a winning one.

www.sunbeltasia.com

[~G~]

You have spoken for them, but tell them" Failure is not an option!" they must adapt and then work harder than ever before.

These guys can actually set an example for determination, they are highly motivated and most energetic; I don't know exacty how is it going for them now, but shifting their main efforts from Thailand to other countries they have license for may very well be just the adjustment they need.

As for my business, I have started with one field, cut it out a few months later when it proved too problematic to generate any revenues there, not to mention profits. I moved to another field, managed to make some minor profits in that, than added a completely different field, which finally gives some decent returns.

[stumonster]

6.2.4 Human resource development (Category 7.15)

what does this cover - would a company set up to supply expat and thai labour fall into this catagory?

[pattygreenstar]

it is bUllsh*t unfair thai 50 baht, farang 200 baht. i am thai i also don't like this country. if i can choose to born i will never never never born here.. dam_n