Taking over an existing business?

[monkeyboots]

Does anyone have any first hand experience of taking over a small business from another foreigner? It's a basic 4 Thai employees set up. I'm trying to ascertain whether this has any advantages over actually setting up the same thing for myself. The obvious advantage to the existing owner is that he wouldn't have to pay the closing down costs. Would there be any advantage to me?

Thanks.

[surangw]

find out if you will also take over any current or past bill, loans or other liabilities

[blackcab]

I have plenty of experience of this.

[WishWashMan]

dont do it. open your own.

[vukovar77]

Do not ever take over business in Thailand.There are serious reason why owner want to sell it!!!Of course not in your benefit?Better do start up business alone or the best,do not open business here as a foreigner!

[Kabula]

My recommendation......DON'T!!

Rent everything...spend your money now and enjoy it!

Simplify your life and relax!

Stay single.....

Have backup....

Edited June 14, 2016 by Kabula

[1FinickyOne]

Well, you offer few details - why is the owner selling? What type of business? I would guess that anything profitable would be kept in the family... if the costs are close, and no reputation involved, just setting up your own business would be much cleaner, unless you are buying assets such as machinery at a discount.

[chicowoodduck]

First, go back to Suvarnabhumi Airport and get your brain.....next thing you will be wanting to know is having a Thai gf a good thing? ?

Take life easy....don't invest, and have a good Plan B.....?

[blackcab]

Don't do it...

Said the people who probably have zero experience of business in Thailand and nothing constructive to offer.

[12DrinkMore]

I have plenty of experience of this.

Don't do it...

Said the people who probably have zero experience of business in Thailand and nothing constructive to offer.

The whole of TV is poised waiting for your constructive advice.

[williamgeorgeallen]

ok, so i have been in business for 9 years in thailand. small business with 4 thai employees (2 of which i dont need) you need to research what it is like to be a foreigner living and working here in thailand. my business does ok but i am selling up. every year i get treated like a criminal when i renew my work permit, even though i support 4 thai families and try to give them a better standard of living . but getting back to your question never ever take over an existing business as it is impossible to know what you are getting into. loan sharks, government officials and thais competing for the same customers dont care if you are a new owner of an existing business. i would very strongly suggest you only start a business as a hobbie and only invest money you can walk away from. dont let your pride stop you from walking away from a failing business. i see many guys having to go home to work to subsidize their thai business because they dont want to loose face with their friends and family. yes us ferang are a proud lot as well. i was getting very sour at thailand and thai people. i am now half way through a year off and i am finding i am enjoying thailand again.

hope you found this constructive.

Edited June 14, 2016 by williamgeorgeallen

[paddyjoe41]

DONT DO IT<just listen to what the majority are telling you here and now,DONT DO IT!))100%NO.

[georgemandm]

Do not ever take over business in Thailand.There are serious reason why owner want to sell it!!!Of course not in your benefit?Better do start up business alone or the best,do not open business here as a foreigner!

I agree with you 1 million % , for the life of me I can't understand why so many stupid man think they can make money in thailand opening a business.

Thailand is not a place to make money it is all about the thai lady who sucks western men in to thailand.

it is all about thai pussy the haire loso

[khunPer]

Advantage: You have annual statements and tax records, making a Work Permit easy; and you shall not find 51% Thai shareholders, which can be a problem today, as proof of fund may be necessary.
Disadvantage: You need to do due diligence to make sure all official relations (tax, accounting, permissions) are in shape, and there's no outstanding debts.

I recommend you to use a lawyer to make the necessary paperwork, here-under preferred shares and voting rights – an accountant can probably do the meeting reports for "bank power of attorney" cheaper than a lawyer, but check price – also let the lawyer advice if it's good to takeover instead of opening a new Thai company limited. I would think the costs may be close to the same as opening a new company, but with the advantage of having "good company records" and some "execisting" shareholders.

Wish you good luck...

[WishWashMan]

Do not ever take over business in Thailand.There are serious reason why owner want to sell it!!!Of course not in your benefit?Better do start up business alone or the best,do not open business here as a foreigner!

I agree with you 1 million % , for the life of me I can't understand why so many stupid man think they can make money in thailand opening a business.

Thailand is not a place to make money it is all about the thai lady who sucks western men in to thailand.

it is all about thai pussy the haire loso

The main reason many open business in t.Land is not to make too much money...........lol.

Something to teech poppa how to make his own money to buy beer.

[ozyjon]

Do not ever take over business in Thailand.There are serious reason why owner want to sell it!!!Of course not in your benefit?Better do start up business alone or the best,do not open business here as a foreigner!

This is a valid post and true in many ways,,, also,,

-- many financial annalists predict a financial meltdown by the end of 2016

where will your income come from.

-- those who say i've been in business for 10 years or more and are doing

well, then remember they started when the rules and government were different

you are starting now in a time when many want to get out.

-- i just went to Lisbon to meet a friend who will vacation with me by the sea side,,

in Lisbon, (he has been there a few times) he remarked about how many stores

were closed and many restaurants too.

-- we arrived at our town by the sea side and decided to go for a walk around the

town,,my friend once again mentions how many stores were closed and many

restaurants that we used to frequent also not there any more.

It's your money and i can't tell you how to spend it, all i'm saying is that people

aren't spending so keep an eye on business and investment, if you want to

spend your cash then consider buying silver bullion, not shares, not on paper,

not jewellery but the brick stuff, i did not mention gold,, not gold.

[blackcab]

... if you want to

spend your cash then consider buying silver bullion, not shares, not on paper,

not jewellery but the brick stuff, i did not mention gold,, not gold.

Why?

[chicowoodduck]

Don't do it...

Said the people who probably have zero experience of business in Thailand and nothing constructive to offer.

Yup, can tell you have made millions doing business here in LOS......now back to your room to count 1baht coins in your coffe can under your mat on the floor......??

[thaiduncankk]

Don't do it...

Said the people who probably have zero experience of business in Thailand and nothing constructive to offer.

Yup, can tell you have made millions doing business here in LOS......now back to your room to count 1baht coins in your coffe can under your mat on the floor......??

I did it, and survived for nearly 10 years.

There is a time and place for everything, and now is not the time or the place.

[blackcab]

The key thing is due dilligence. If someone simply says, "Don't do it" then they are pre-judging the situation without being in possession of the full facts.

Every case is different. I personally know people who have purchased businesses here and they have done very well for themselves. Others have crashed and burned.

There really are some decent business opportunities out there for sale. There are also some shockers.

[djlest]

LOL these forums do make me laugh - rule number one - dont listen to bar stoolers or 99% of thai visa as they are idiots - period...

 

i came to Thailand 12 years with nothing but a back pack

 

now i make almost 1 million baht a month (take home after tax) is it easy? NO - is it impossible? NO - how did i do it?

i stopped listening to idiots on Thai visa for a start.... the mind is more powerful if you believe in yourself... not those negative jaded broken barstoolers that gave up long ago...

 

in my humble opinion there is no better place right now to be than thailand to make money... why? developing nations grow fast and furious based on all the business models we excel at.

 

as for a Thai wife or partner - yep! you will get screwed there and you just have to be very savvy... ensure that any business deals you do with lets say - another Thai - you pay them a reasonable return... but dont ever choose someone who is more capabale than you. always make sure they know you have all the cards and the companies go tits up without you.

 

finally to make it here - you will have to devolve A LOT... you will have to learn to think Thai and then some... you will have to be very very brutal sometimes... business here has zero ethics and if your the sensitive type... you wont last long...

[TravelerEastWest]

On 6/14/2016 at 4:23 PM, khunPer said:

Advantage: You have annual statements and tax records, making a Work Permit easy; and you shall not find 51% Thai shareholders, which can be a problem today, as proof of fund may be necessary.
Disadvantage: You need to do due diligence to make sure all official relations (tax, accounting, permissions) are in shape, and there's no outstanding debts.

I recommend you to use a lawyer to make the necessary paperwork, here-under preferred shares and voting rights – an accountant can probably do the meeting reports for "bank power of attorney" cheaper than a lawyer, but check price – also let the lawyer advice if it's good to takeover instead of opening a new Thai company limited. I would think the costs may be close to the same as opening a new company, but with the advantage of having "good company records" and some "execisting" shareholders.

Wish you good luck...

 

The above is clearly the best post in this thread. Very well thought out.

 

A good business lawyer can be useful but a CPA with lots of experience is my choice most of the time rather than a lawyer. In the end it will be about experience and how comfortable of a fit you are for your service professionals. Once I spoke with a CPA in Bangkok who used to be a partner in one of the large international accounting firms - he was very smart and knew the exact questions to ask me, but he was too expensive for my small business budget. I may use him in the future...

 

One concern I have is who are the Thai shareholders?

 

Khun Per briefly mentions "preferred shares and voting rights" he is correct to mention this issue but it is more important than it seems as if preferred shares are not already in place with you holding voting rights for the common shares you must change the share ownership before you buy the company.

 

I assume that you know enough about business that you are already aware of this issue and if you don't then sadly I must agree with the TV crowd who are against Thai business ownership.

 

But if you already are an experienced business owner/manager then go for it. Business in Thailand can be much easier than elsewhere in many ways - example lower labor costs and so on...

 

[seancbk]

On 8/30/2016 at 7:30 PM, djlest said:

LOL these forums do make me laugh - rule number one - dont listen to bar stoolers or 99% of thai visa as they are idiots - period...

 

i came to Thailand 12 years with nothing but a back pack

 

now i make almost 1 million baht a month (take home after tax) is it easy? NO - is it impossible? NO - how did i do it?

i stopped listening to idiots on Thai visa for a start.... the mind is more powerful if you believe in yourself... not those negative jaded broken barstoolers that gave up long ago...

 

in my humble opinion there is no better place right now to be than thailand to make money... why? developing nations grow fast and furious based on all the business models we excel at.

 

as for a Thai wife or partner - yep! you will get screwed there and you just have to be very savvy... ensure that any business deals you do with lets say - another Thai - you pay them a reasonable return... but dont ever choose someone who is more capabale than you. always make sure they know you have all the cards and the companies go tits up without you.

 

finally to make it here - you will have to devolve A LOT... you will have to learn to think Thai and then some... you will have to be very very brutal sometimes... business here has zero ethics and if your the sensitive type... you wont last long...

Good response.

I agree with you completely.  

[RandolphGB]

Why would you line the pockets of the Thai owner of this business? What physical assets are you actually getting when you buy the business from him? 

 

Chances are he's just looking to offload it to a foreigner for his own big payday.There's also nothing to stop him from starting up a rival business. You will have zero protection if anything goes wrong. And try ranting to the g'mnt about your non-competition clause in the sale. 

 

If it's an established business - eg 5 - 10 years old -  and there is a strong future earnings forecast or you have some plans about how to increase existing earnings, then there may be some case for it.

 

But IMO without any more details about what it is, I would suggest keeping your money and starting your own, based around the one you're thinking of buying. Don't invest too much at first and have a speedy exit strategy.

 

 

 

[smotherb]

On 6/14/2016 at 9:53 AM, blackcab said:

Don't do it...

Said the people who probably have zero experience of business in Thailand and nothing constructive to offer.

A sensible person does not have to do something to realize it is not a good thing. Look around you, make sure you understand the business. Talk to many foreigners with businesses here. Sure, there are some foreigners who have made money in business here. Most have found a niche, but few have had no prior business experience, and they all had a bit of luck. There are others whose business is just a hobby and if it supports itself they are content; because they have a real source of income elsewhere. The majority of the other foreigners I know who tried business here wish they hadn't.

[ericthai]

On 6/14/2016 at 2:15 AM, georgemandm said:

I agree with you 1 million % , for the life of me I can't understand why so many stupid man think they can make money in thailand opening a business.

Thailand is not a place to make money it is all about the thai lady who sucks western men in to thailand.

it is all about thai pussy the haire loso

Please tell me how many businesses you owned in Thailand to give such good advise??

 

Your comments about Thai girls shows you know nothing about Thailand. Thailand is very industrialized exporting products worldwide which produces the majority of the GDP for Thailand.  Tourism is less than 10% of the GDP, so it;s not all about Thai ladies who suck!!

 

I have owned several companies in Thailand and did very well. I have several friends that have own companies in Thailand and do fine. My first company we built it up and then sold it for well over $1 million USD.  Sure if you are going to open a business you know nothing about and never owned a company before you are going to have allot of issues or if you are going to follow so many down the path of a bar or restaurant then it's difficult. However if you open a company and know what you are doing and you are not in the service industry you can do very good. 

[bazza40]

Sounds like a good plan to convert a large fortune into a small one.

 

The number 1 rule of any financial activity is never ever invest in anything you don't understand.

 

[Sirbergan]

On 6/14/2016 at 1:15 PM, georgemandm said:

I agree with you 1 million % , for the life of me I can't understand why so many stupid man think they can make money in thailand opening a business.

Thailand is not a place to make money it is all about the thai lady who sucks western men in to thailand.

it is all about thai pussy the haire loso

 

So you're just throwing out an opinion that is based on nothing? I'm sure the OP is eternally grateful for your wonderful insight.

 

As the owner of a successful translation company (offering services to high-end clients, translating user manuals, websites etc., I will beg to differ. Our Thai translation services, which we were almost forced to take a chance on due to the simple fact that it wouldn't make much sense to have 4 Thais serving coffee to every foreigner with a work permit (our primary service was Scandinavian translations), has simply exploded.

 

I think stupid men post assumptions of things they know little about.

 

To the OP: If you can hire the four employees you need to get your work permit anyway, I would consider to start my own company. It won't cost you a fortune, you can hire your own employees (instead of taking over the employees of someone else, as they (unless you know otherwise for a fact) might be part of the reason why he wants to sell (i.e. why his business is not succesful) in the first place, in addition to what other posters has said about potential surprise financial obligations down the line.

 

Hire a lawyer to do it for you, and ask if it's possible for the Thai partner with 51% of the stocks to have inactive stocks –so that you will still remain 100% of the control.

 

Don't take the advise anyone has given you here as a certainty, do your own due diligence and find a good Thai lawyer instead.

[seancbk]

6 hours ago, RandolphGB said:

Why would you line the pockets of the Thai owner of this business? What physical assets are you actually getting when you buy the business from him? 

 

Chances are he's just looking to offload it to a foreigner for his own big payday.There's also nothing to stop him from starting up a rival business. You will have zero protection if anything goes wrong. And try ranting to the g'mnt about your non-competition clause in the sale. 

 

If it's an established business - eg 5 - 10 years old -  and there is a strong future earnings forecast or you have some plans about how to increase existing earnings, then there may be some case for it.

 

But IMO without any more details about what it is, I would suggest keeping your money and starting your own, based around the one you're thinking of buying. Don't invest too much at first and have a speedy exit strategy.

 

 

 

The OP said "Does anyone have any first hand experience of taking over a small business from another foreigner?" 

So not sure why you are saying "Why would you line the pockets of the Thai owner of this business?"

Secondly, although the OP says he's thinking of taking over a small business, it sounds to me more like he's simply taking over the company to avoid having to setup a new one.

Quite often on these forums I see people confusing the legal entity 'the company' with the business that said company is engaged in.

Perhaps the OP wants the company so he can use that legal entity to run an entirely different business.

 

Edited September 3, 2016 by seancbk

[georgemandm]

5 hours ago, ericthai said:

Please tell me how many businesses you owned in Thailand to give such good advise??

 

Your comments about Thai girls shows you know nothing about Thailand. Thailand is very industrialized exporting products worldwide which produces the majority of the GDP for Thailand.  Tourism is less than 10% of the GDP, so it;s not all about Thai ladies who suck!!

 

I have owned several companies in Thailand and did very well. I have several friends that have own companies in Thailand and do fine. My first company we built it up and then sold it for well over $1 million USD.  Sure if you are going to open a business you know nothing about and never owned a company before you are going to have allot of issues or if you are going to follow so many down the path of a bar or restaurant then it's difficult. However if you open a company and know what you are doing and you are not in the service industry you can do very good. 

I am talking about small businesses ok not big ones lots of men come here and think can make lots of money in a bar or a small restaurant ok .

i have seen how the small ones go to S??? .