Have you ever thought of buying a business in Thailand? If so, now may be the time to do it. Due to falling investment from Western companies, the Thai government has begun measures to open Thailand to foreign investment. A lot of Westerners have recently sold businesses because of increasing restrictions and many Western business owners have left Thailand. The new Thai government seems to understand the reasons for this and realizes that opening up the market to make it easier for foreign investors is only going to help Thailand.
There are however several things you need to be concerned about if you consider buying a business in Thailand. First of all, are you considering opening your own business or buying an existing business in Thailand? In most cases, buying an existing business makes more sense than starting a new one. An existing business already has all fixtures and fittings, and has existing customers. In a country where you most likely will not speak the language, beginning a new company is risky. It will be difficult to attract customers, hire employees, deal with setting up vendors and many other every day business decisions if you cannot speak Thai.
Secondly, in most cases, you cannot purchase a business outright in Thailand. You have to have a Thai partner that owns at least 51% of the business. This means, you have to find a Thai partner that you really trust as there have been many instances of Thai business partners taking advantage of foreign investors and taking their money. Remember, in Thailand, in most instances still the law will come down on the side of the Thai and not on the side of the foreigner.
If you are an American, you are the only nationality that can open a business in Thailand and have 100% ownership. The US has a treaty with Thailand called the Amity Treaty in which Americans can open a Thai business and have the exact same protections as a Thai business person. You do however have to pay fees to open the business and you will still not be able to get a visa enabling you to stay year round in Thailand unless you hire at least four Thai employees. What this means is, every three months, until you hire four Thais to work for you, you will have to take a trip outside Thailand in order to keep your work permit and visa valid.
I looked into an Amity Treaty business and actually found it not really worth the money. There were fees involved that aren’t involved with buying or starting a
Thai business and the benefits didn’t outweigh the $1,500 more in fees required than are required in opening a Thai business. It’s also much more expensive to register an Amity Treaty business whereas registering a Thai business is literally less than $50. If you have a Thai partner who you trust implicitly, then you’re better opening a Thai business with 49% ownership. Especially as you are going to be in Thailand so the Amity Treaty says you have the same rights as a Thai, but who knows if that’s actually true if put to the test?
If you decide to buy an existing business in Thailand, there are always many opportunities. Just browsing through websites of available businesses, there are restaurants, coffee shops, internet cafes, exporting businesses, a publishing company, and even a British pub. There are also several legitimate brokers that will help you purchase a business you’re interested in. Just be wary when you choose one, as some of them are also the agent for the business being sold so, of course, they have an interest in selling that business to you as they get a commission on the sale.
All in all, if the laws continue to be changed in favor of foreign investment, Thailand is looking as though it may be a good place to buy a business. If you do decide to buy a business in Thailand though, make sure you do a lot of research. Research the area you are thinking of running your business in. Can that area support a business like that? If it’s an existing business you’re looking at, do they have accounting records from when they began their business and how profitable has the business been? What does the future look like for the type of business you are interested in? Does the agent or broker you are dealing with come with recommendations from other people? Are they doing everything the legal way or are they suggesting possibly illegal measures, which can come back to haunt you in Thailand? All of these are things you should be looking at.
In the present economic environment though, buying a business in Thailand could be a good opportunity for you.
Doing business abroad is indeed one hell of a task as a lot of things need to be taken care of and planning has to be made well in advance. The website, PGN Global, is a good platform which will give all the required details about business, both domestic and international, and how it is done.