Setting Up A Small Internet Cafe

[raincoatedlover]

Hello!

I'm looking in to the possibility of setting up a small internet cafe in thailand. I've been reading a lot on different websites and the company formation thing is the most difficult thing for me to understand.

For example this 2 million baht registered capital? Is this only for the structure of the shares or can I use this money for paying rent for shop, buying computers, etc?

If I'm married to a thai, is 1 mtb enough? Is there other, "cheaper" company forms?

If I would register this 2 million baht company, can it be the holder of two businesses in very different categories? Like an internet shop and a beauty salon as well, or do I need two companies for this?

If I dont want to own any land, Can I own 100% of the shares?

Happy for all sorts of replies!

Thanx

[think_too_mut]

Hello!

I'm looking in to the possibility of setting up a small internet cafe in thailand. I've been reading a lot on different websites and the company formation thing is the most difficult thing for me to understand.

For example this 2 million baht registered capital? Is this only for the structure of the shares or can I use this money for paying rent for shop, buying computers, etc?

If I'm married to a thai, is 1 mtb enough? Is there other, "cheaper" company forms?

If I would register this 2 million baht company, can it be the holder of two businesses in very different categories? Like an internet shop and a beauty salon as well, or do I need two companies for this?

If I dont want to own any land, Can I own 100% of the shares?

Happy for all sorts of replies!

Thanx

It's a long stretch from the first and the last question.

Anyway, do you think that kind of a shop is worth much these days when home ADSL is available almost anywhere? Even in apartments/condos with PABX and no direct phone lines.

[mouse]

Hello!

I'm looking in to the possibility of setting up a small internet cafe in thailand. I've been reading a lot on different websites and the company formation thing is the most difficult thing for me to understand.

For example this 2 million baht registered capital? Is this only for the structure of the shares or can I use this money for paying rent for shop, buying computers, etc?

If I'm married to a thai, is 1 mtb enough? Is there other, "cheaper" company forms?

If I would register this 2 million baht company, can it be the holder of two businesses in very different categories? Like an internet shop and a beauty salon as well, or do I need two companies for this?

If I dont want to own any land, Can I own 100% of the shares?

Happy for all sorts of replies!

Thanx

I did this 8 years ago in a remote village with ipstar and a WiFi network stretching 300 meters and do not recommend it to anyone. After a lot of pain and almost a year I managed to get my money back out of the project before shutting it down for good. The good part is that I was able to donate some equipment to the local school that carried on with the proper Internet eduction versus games.

Edited November 28, 2006 by mouse

[raincoatedlover]

It's a long stretch from the first and the last question.

Anyway, do you think that kind of a shop is worth much these days when home ADSL is available almost anywhere? Even in apartments/condos with PABX and no direct phone lines.

I guess not, I just want to understand the rules. I would though try to rent a shop in a tourist area, so I can get the tourists surfing. And also sell some clothes and other products that I believe could be attractive.

[think_too_mut]

It's a long stretch from the first and the last question.

Anyway, do you think that kind of a shop is worth much these days when home ADSL is available almost anywhere? Even in apartments/condos with PABX and no direct phone lines.

I guess not, I just want to understand the rules. I would though try to rent a shop in a tourist area, so I can get the tourists surfing. And also sell some clothes and other products that I believe could be attractive.

It might be more viable that way.

Just don't forget, many tourists bring their own laptops, they have free or affordable Internet in their rooms and they share the scare of the key loggers in BKK Internet caffees.

[girlx]

Anyway, do you think that kind of a shop is worth much these days when home ADSL is available almost anywhere? Even in apartments/condos with PABX and no direct phone lines.

pshaw. not easy to get where i live, and several places in thailand i have been to. thailand is not all that hooked up yet.

[think_too_mut]

Anyway, do you think that kind of a shop is worth much these days when home ADSL is available almost anywhere? Even in apartments/condos with PABX and no direct phone lines.

pshaw. not easy to get where i live, and several places in thailand i have been to. thailand is not all that hooked up yet.

But the tourist areas are. Wired and over-wired.

It was a good idea 6-7 years ago, for a year or 2. Then everyone came aboard onto that biz.

In my wife's place - Wang Nam Yen, only idle kids would go to the Internet cafees to play games. And those places were empty this time last year.

[raincoatedlover]

For example this 2 million baht registered capital? Is this only for the structure of the shares or can I use this money for paying rent for shop, buying computers, etc?

If I'm married to a thai, is 1 mtb enough? Is there other, "cheaper" company forms?

This is the most essential question for me.. I know for sure its a tough business these days.. I just want to know about the rules.. not if my idea of business is good or not. I thinks its a too big investment to make if you dont know if it will hold or not, for such a small business. Thanx anyway.

[think_too_mut]

For example this 2 million baht registered capital? Is this only for the structure of the shares or can I use this money for paying rent for shop, buying computers, etc?

If I'm married to a thai, is 1 mtb enough? Is there other, "cheaper" company forms?

This is the most essential question for me.. I know for sure its a tough business these days.. I just want to know about the rules.. not if my idea of business is good or not. I thinks its a too big investment to make if you dont know if it will hold or not, for such a small business. Thanx anyway.

Reformulate your question and then someone may respond. Open a new thread, why not?

[Sunbelt Asia]

I'm looking in to the possibility of setting up a small internet cafe in thailand. I've been reading a lot on different websites and the company formation thing is the most difficult thing for me to understand.

For example this 2 million baht registered capital? Is this only for the structure of the shares or can I use this money for paying rent for shop, buying computers, etc?

The 2 million Baht does not have to be paid in cash. It can be non-cash as well... equipment, inventory, service. Any cash can be used for the business.

If I'm married to a thai, is 1 mtb enough? Is there other, "cheaper" company forms?

Yes it can be one million Baht. But don't get hung up on the registered capital. It does not have to be cash.

If I would register this 2 million baht company, can it be the holder of two businesses in very different categories? Like an internet shop and a beauty salon as well, or do I need two companies for this?

Same company

If I dont want to own any land, Can I own 100% of the shares?

Depends on your nationality.

www.sunbeltasiagroup.com

[raincoatedlover]

If I don't want to own any land, Can I own 100% of the shares?

Depends on your nationality.

www.sunbeltasiagroup.com

Ok, I'm swedish. not American. If I can't own 100%, is there anything I can do make my shares more valuable? I have heard about this voting thing.. I have also heard it is not valid anymore?

[johnnyk]

Internet cafe is a race to the bottom.

In Hua Hin its 20 baht an hour.

How is anybody going to make a ROI on that?

Hardware gets old fast, customers have no loyalty they drop in to whichever is nearby and cheap.

A successful business needs steady repeat customers.

[jomama]

Internet cafe is a race to the bottom.

In Hua Hin its 20 baht an hour.

How is anybody going to make a ROI on that?

Hardware gets old fast, customers have no loyalty they drop in to whichever is nearby and cheap.

A successful business needs steady repeat customers.

Totally correct.

I had the second internet shop to open in Chiang Mai some 10 years ago or so. It was OK for a while until Thai folks enetered the fray, lined the street with internet shops all around me, then cut the price. An amazing price war insued. We even had a "summit meeting" with all the owners and agreed to set the price at 1 baht per minute (the lowest possible rate to survive). Everyone agreed, then the next day one owner opened at 0.50 baht per minute.

They didn't seem to get it that just because you took in 1,800 baht or something in a day doesn't mean that you MADE 1,800 baht. They NEVER factored in costs of replacement, paint on the walls, a decent bathroom, or even electricity, or probably even rent.

And the customers...tourists will jump to the shop next door in a nanosecond for a tiny difference in price.

Well, after these "owners" cut my throat, they cut their own (of course), and permanently ruined the market in Chiang Mai, and so it remains today. Most went out of business long ago. Some shops surived with locations in excellent tourist areas with quality customers, not backpackers, and some subsist by gaming, esstentially LAN-based games where bored, neglected kids spend all of their spare time.

All in all, they managed to turn even the internet shop business into an ugly and cut-throat envirnoment (for a time).

The shake out is over, now, and those who survived are organized enough to maintain their shops. The street price, however, remains laughably low. I wouldn't spend just my time for that kind of money, let alone the investment funds and overall brain damage required.

[manjara]

Internet cafe is a race to the bottom.

In Hua Hin its 20 baht an hour.

How is anybody going to make a ROI on that?

Hardware gets old fast, customers have no loyalty they drop in to whichever is nearby and cheap.

A successful business needs steady repeat customers.

True, you're not going to make a lot of money on charging people to surf. But that doesn't mean you can't make money.

Make the surfing free and charge a bit extra for cups of coffee, or food, or clothes or anything else. Internet access just gets people in the door.

[poorfarang]

I never understand it why I farang would want to open a tiny business like an internet cafe. Why open any business that cant even make $50 a day?

Seems crazy to me.

[johnnyk]

True, you're not going to make a lot of money on charging people to surf. But that doesn't mean you can't make money.

Make the surfing free and charge a bit extra for cups of coffee, or food, or clothes or anything else. Internet access just gets people in the door.

Not going to make any money that way either.

Investing thousands upfront in hardware, software, ADSL connections, furniture and thousands more every month for rent, air con and staff seems a poor way to get people to buy a few Fantas or whatever.

Up to you.

[bendix]

I never understand it why I farang would want to open a tiny business like an internet cafe. Why open any business that cant even make $50 a day?

Seems crazy to me.

To keep a bored wife / gf off the streets?

[roadking95]

I think the OP was asking more in line with how business worked in Thailand, not whether or not it was a good business to go into. If he wants to waste his money then that is his problem.

[davidjtayler]

Got to agree with most of the other poster on this one ... At such low prices the only way to make money on internet is to set up in a prime area (eg Khaosan road) and operate 50+ computers but you will prob find that the high rent in these areas will wreck things anyway.

Better with the internet cafe business is to set up just off a prime location where the rent is more manageable with the internet to be used as a tool to bring your customers in but not for the sale of fantas or coffees ... but for the sale of flight tickets, transportation, trekking, diving, hotel reservations etc .. this is where the money can be made.

Overseas calls are another money earner especially with the internet programmes available and skype doesnt yet take too much of that away.

Basically the more you can offer your customer whilst he/she is in your office the better.

For this you will need a modern clean office with a quick, reliable connection and modern computers (flat screens etc) that brings the customers in and keeps them there.

Dont expect to make a fortune especially if you havent got experience in the internet/travel business but there is money to be made.

[JimsKnight]

Internet cafe is a race to the bottom.

In Hua Hin its 20 baht an hour.

How is anybody going to make a ROI on that?

Hardware gets old fast, customers have no loyalty they drop in to whichever is nearby and cheap.

A successful business needs steady repeat customers.

The only place where its possible to make coin on this type of business is on the tourist trap islands where high speed is almost nonexistant (Koh Tao for Example and Koh Phangan). There they charge (if memory serves me) approx 100 Baht an hour, that was two years ago, now its probably 150 Baht. These connections were all modem!

I've used the internet cafe all of one time so far into my trip, ISDL is the way forward and many apartments are getting in on the action. They charge a one hit monthly fee (usually of 2-300 baht) which just blows away the internet cafes. This is what most savvy expats use, the 'two weeker' tourist brigade are not, they still use the internet cafes, but the easy money margin is narrowing considerably.

Unless you fancy expensive outlay and wish for life in touristsville it will essentially be a hobby job / keep the thai wife / gf busy.

Edited November 29, 2006 by JimsKnight

[Sunbelt Asia]

If I don't want to own any land, Can I own 100% of the shares?

Depends on your nationality.

www.sunbeltasiagroup.com

Ok, I'm swedish. not American. If I can't own 100%, is there anything I can do make my shares more valuable? I have heard about this voting thing.. I have also heard it is not valid anymore?

You can as of now, have control over the comnpany by voting rights and being the MD. As of now, this is legal, may change in the future.

www.sunbeltasiagroup.com

[kdvsn]

The only place where its possible to make coin on this type of business is on the tourist trap islands where high speed is almost nonexistant (Koh Tao for Example and Koh Phangan). There they charge (if memory serves me) approx 100 Baht an hour, that was two years ago, now its probably 150 Baht. These connections were all modem!

I've used the internet cafe all of one time so far into my trip, ISDL is the way forward and many apartments are getting in on the action. They charge a one hit monthly fee (usually of 2-300 baht) which just blows away the internet cafes. This is what most savvy expats use, the 'two weeker' tourist brigade are not, they still use the internet cafes, but the easy money margin is narrowing considerably.

Unless you fancy expensive outlay and wish for life in touristsville it will essentially be a hobby job / keep the thai wife / gf busy.

I'm not sure that a cybercafe in a heavily touristed place like Koh Phangan would be too good of a business either. In Hat Rin (Koh Phangan) it does cost 2 Baht per minute at cybercafes but only because the cybercafe owners are engaged in price fixing, they all agree not to undercut each other on price and they all charge exactly 2 Baht. To join in on that business, you'd essentially have to join a cartel and then the success of your business would be dependent upon the cartel's ability to keep a grip on prices and upon your ability to differentiate your cybercafe from all the other cybercafes based upon something other than price. Most of the cybercafes appeared to have a pretty low utilization rate and KP already has a lot of cybercafes, so just being an average cybercafe charging the same price as all the other cybercafes doesn't seem like it would raise much revenue even at 2 Baht per minute.