By Sean Fowler
The same rules apply anywhere in the world to setting up and running a business, but in Thailand, mainly due to language barriers and strange or unfamiliar laws etc, things can prove to be very, very different.
The rules we are all used to in the West i.e.:
1. Have a business plan
2. Register your business – Know the LAW
3. Know your marketplace
4. Source your staff
5. Pay your business taxes
6. Pay your staff’s insurance tax
7. Provide the goods or services as well as you possibly can and price them competitively
8. Deal with any problematic issues immediately to prevent them escalating
9. Know your competitors & allies (SWOT – Strengths/Weaknesses/Opportunities/Threats)
10. And ultimately, strive to make a profit
Obviously with no.1, the business plan, this should be formulated well before you actually take the plunge and get to the registration stage. If nothing else, just to satisfy your mind that the main focus of the business will be achievable and could actually run in a profitable state. On top of that, a well laid out business plan could help with obtaining further external investment (loans etc.) or investors/shareholders within the company to help aid the early stages of set up and development.
No.2, registering your business, well that is a pretty straight forward mechanism in Thailand, or is it?
“Type of Business Organization Businesses may be operated in various types from individual as the owner or by investing with other individuals as the group. In order to decide to choose any type of businesses, the entrepreneurs must realize various components of business operations such as nature of businesses, capital, business capability, etc, in order for the success of businesses and maximization of profit and benefits.”
The following diagram is stage one of actually getting your business registered, knowing which type of business you would need to get it registered as:
(photo coutesy of thairegistration.com)
A very comprehensive breakdown of what all of the above comprises, and also to help you decide which avenue to take with your business registration is available online at: http://www.thairegistration.com/ and http://www.moc.go.th/
The addresses of the local government offices where you can pick up leaflets or ask for some further advice on registering a business in the Udon Thani and Nong Khai areas are as follows:
Nong Khai –
Office of commercial affairs,
City hall,
Tambon Nong Khom Koh,
Muang, Nong Khai 43000
Tel: (042) 411561 , 421128 or (042) 4113391
E-mail: nk_ops@moc.go.th
Udon Thani –
Office of commercial affairs,
247/1 Moo 7 Udon-NongKhai Road
Tambom Maakhang,
Muang, Udon Thani 41000
Tel: (042) 324969, 247324 or (042) 324969
Email: udonthani@thairegistration.com
Moving onto step 3, knowing your marketplace, is a very simple practice to put into operation, would you like someone to bake you a pie that you knew, had absolutely know idea about safe food handling practices, NO, I didn’t think so! Obviously, before you even consider setting up some kind of business, make sure you know what is involved and that there will be enough experience within the company to ensure the continuity of a viable product or service.
Step 4 – Sourcing staff, sounds really easy considering Thailand’s lack of quality employment throughout the country and what seemingly is an abundance of people all sitting around in some of the smaller outlying villages without anything to do.
Well turn my 1st sentence around, at times, it is more a case of Thailand’s lack of quality people to fill positions, and the abundance of people in the villages could well be there as they have no desire to find other work than what they may already have, be it in the farming industry or whatever, they are probably content there, also, probably will not be qualified to do many other things.
On more than a few occasions recently, I have been put in the situation where I needed to hire additional pairs of hands to cope with my never ending workload. Lesson learnt, finding reliable places to advertise for Thai staff out in the sticks can be a little difficult and advertising in Bangkok tabloids will attract some interest, but it will be for bigger money than what you ever would have thought the position was worth. So onto the internet, well that works with websites like http://www.thaijobs.com or some other online job classifieds websites (there are plenty about nowadays just do a search on google), but they are not cheap, and can turn up some pretty undesirable employees coming for the initial interview, but that is the most effective way we have found to date.
The biggest problem we have found in Thailand with sourcing employees, is although they have paper qualifications in whatever subject you may be trying to hire from, very few have any relevant experience in the given field. They also turn up for interviews late and unprepared. You may request they bring a portfolio of some of their previous work, only to find out that they either forgot, or it was from a totally unrelated topic!
It can all be very frustrating at times… Ultimately skilled labour can be very difficult to find.
On the other hand though, if you are just looking for unskilled workers that can be trained for any simple task set forward to them, then you should never have any problems. And some will work all the hours under the sun quite happily for a very modest salary. So all is not lost!
Step’s 5 & 6 – Taxation. A very topical subject in Thailand, and a fairly complex one at that.
I’m not even going to attempt to bore you all to tears with how taxes work for businesses and employees here, something always seems to be changing or getting added so my info would probably be outdated before it went to print. For instance a friend of mine a while back got an extortionate tax bill for what was seemingly a very odd tax and he had never had to pay it before in all the 5 or so years he had been working from his office in Isaan. He got his accountants involved and tax applicable seemingly got even higher. So just to prevent any further mishaps, he paid up, whether right or wrong! The bottom line is, if you can get the tax lowered then great, if not just pay it as it will probably get higher.
Surprisingly there is a National Insurance to pay for staff here, it is a regular monthly fee which cover them for some medical mishaps during their time in your employment.
Just don’t forget though, know the laws as best you can regarding taxes, as it will be partly your responsibility to get them paid.
Number 7 – Price yours goods or services competitively
Common sense really, you wont last too long if you don’t.
Step 8 - Deal with any problematic issues immediately to prevent them escalating
Again, it should be common sense, if something is ‘broken’ in the day to day running or operations of your business then get it fixed as soon as possible, before it becomes unfixable. A golden rule to prevent local competitors taking advantage of the situation.
Number 9 - Know your competitors & allies
Knowing your competition here, is a challenge to say the least, what with all the new openings and recent closures going on. But it is imperative that you do your best to know exactly who is offering what and at what price, if you don’t then you will soon be outstripped by others venturing into the same marketplace. This is especially true, with what was initially a ‘brand new, never seen before’ venture in town, I promise you, if this was the case with your business, then it won’t take long before someone else jumps on the bandwagon and attempts to do the same for cheaper or better.
Knowing your allies on the other hand, will do nothing more than benefit both you and your company, if they are local Thai allies, then even better.
If you ever find the opportunity to network with other business owners, then do so, you will always find or exchange some very good information and ideas which may or may not benefit you or your business directly, but may well come in handy for the future.
And finally, what everybody (well most anyway) who sets up a business really want to gain from it, other than self satisfaction is a profit, so make sure you do your mathematics first, more so in Thailand than anywhere else.
All things said, that age old saying of “how to make a small fortune in Thailand, is to start with a big one” is a common trait here, what with bar & restaurant owners selling up as quickly as they bought in the first place. But it really is possible to make a decent living and be the owner/partner/director of a successful business here in the land of smiles, just do your home work and research before you take the plunge.
Good luck!
