It is very tempting to start a business in Thailand if you have a little money behind you. It seems like a perfect idea – a country with great weather, cheap living costs, cheap labor, smiling people and a large flow of tourists to fund your business. Lots of people use their retirement money to buy a bar in Koh Samui, a resort in Koh Phangan etc. Some people try to set up bakeries. Others look to build and rent luxury villas by a beach. Sadly, most of these businesses fail for one reason or another. The truth is that it is very hard to succeed in business in Thailand. Being an entreprenuer in Thailand is very different to being one in the UK, Europe or the USA. This is the primary mistake that many ex-pats make.
The law in Thailand regarding ownership of land, property and business is extremely opaque. There are lots of law firms willing to take large sums of money to seemigly ’take care’ of such things as visas, company documents, setting up companies etc. It is one of the boom areas in the Thai economy.
Unlike other countries it is very hard for a foreigner to own anything in Thailand. Even if he or she is married to a Thai national, the business, house etc. has to be in the Thai’s name. This creates complications in marriages and in business. Another route is to set up a Thai limited company. A foreigner can own 49% of such a company, but have preferential voting rights in the company memoranda to give him or her effective control of the company. This is a smarter move.
To get an official working visafor Thailand it is necessary to show that the company is employing 4 Thais. This is a barrier to being allowed to officially work in your own company. Many people ignore this rule, but Thai immigrations periodically do a sweep to round up people breaking this law, especially dive instructors.
The impedements to owning your business in Thailand and working in your business are just the beginning. Often a foreigner is over-charged for services and products in Thailand. This is a nationwide problem. If a foreigner does not speak Thai the likelihood of this is increased.
Another problem is with staff. Thai people are no more honest or dishonest than anyone else, but they are paid very little. There is always a temptation to steal from the till or from stock. This is especially a problem with restaurants and bars in Thailand. Often the only way around this problem is to sit at the till all day to make sure all the money finds its way to you and is not funnelled off. There are few places with electronic tills that take employer details etc. so it is very easy to steal without fear of being caught.
Finally, there is a lot of competition in Thailand, especially for the tourist Thai Baht. There are already too many many bars, restaurants, tatoo parlors, internet shops and motorbike rental places in Koh Samui, Koh Tao, Phuket, Khao Lak, Koh Chang and all the other major tourist areas in Thailand. There seems a dearth of new ideas in Thailand concerning businesses. Some of the most successful businesses that foreigners are involved in in Thailand do not actually target tourists. Being original and offering something new is vital to success in Thailand. Otherwise, it is just better and cheaper to go to Thailand for a holiday.