Thai-Related Businesses

The subject of starting a business in Thailand is probably about as popular as the going rates for an evening with Thai bargirls among those addicted to the Thai nightlife. It is only expected, given those who have been addicted to this “adult Disneyland” for men would seek a way to make a living in The Land of Smiles. Of course, many of the ideas potential farang residents decide to pursue or look into pursuing to make a living are not as perfect as first envisioned, while many others simply don’t pay so well relative to the average Western salary (especially if you come from North America, Europe, or the UK). Like many who have spent time in Thailand, I’ve contemplated on ways to make a living in Thailand, ranging from professional employment to owning one’s own business.

It seems that in Thailand, like most of the world, owning your own business gives a much better potential for making a large income. In Thailand, where salaries are fairly low unless you get a true expat package based on your Western homeland’s higher salary levels, owning a successful and profitable business is likely your only way to make a decent income.

I cannot say I am an expert in starting a properly registered legal company in Thailand, beyond the information provided on various online sources and the advice from expats who have registered such a firms in LOS. If you start a business in Thailand and need to wade thru the legal process, a good lawyer and the advice of farangs who have done so successfully would be best sought out. This piece is more about ideas for a successful business.

In the time I’ve thought through this, the idea of getting into a “bargirl related business”, such as a gogo bar, massage parlor, etc. seems unlikely. The barriers to entry have increased dramatically, there has never been any guarantee of license to run the business (it is a politically incorrect venture the Thai government chooses to punish and regulate at it’s whim; the police extort protection fees and crack down as it’s superiors dictate and change; it is still technically illegal), and for the successful ventures there seems to be endless failed ventures. Running a Thai “standard business”, such as a small Thai restaurant, Laundromat, salon, noodle shop, etc. seems unlikely, as these businesses seem easy to start and make “successful” at the Thai shopkeeper level. However, their profit and income goals are often quite low compared to farang ambitions. Many of these businesses sell at a seeming bargain because they provide only 10k to 40k baht per month. A farang can often make this or more as an entry-level English teacher. Why would you want to invest 60k to 500k baht to buy a business for this same income level? Many of these businesses also seem to be easy to start up from the ground, without buying an existing one, from what I’ve seen. They don’t come with real estate usually, as rent is still due monthly. The cost of starting the business could easily be spent on selecting a proper storefront, paying key money and initial rent, and buying the capital equipment (chairs, tables, salon equipment, etc.) instead. If one were to go into business, the ability to find a proper location, project foot traffic and sales, and selecting proper product vendors and goods to sell should already be part of the future owner’s skill sets. If not, buying an existing business doesn’t guarantee success. How would you be able to verify the business you want to buy is actually successful if you don’t have the above skills?

So with all the above business types being overdone, overvalues, or overly risky, what can a farang or foreigner really do in Thailand as a business? I’ve come up with a few ideas. I am only going to address them on a generic level, with no specific details. This would only saturate competitors in a few ideas, which could be terrible or good ideas to start with. The areas I’ve noticed may hold promise are based on a simple concept of following the money. In doing this, I’ve noticed that the money seems to be in import/export, housing and land, and manufacturing.

Import and export seem to show good promise. Just look at the amount of Thai goods, especially foodstuffs, found in Western Asian markets throughout the West. More and more non-Thai food stores are selling Thai produced food. It seems that Thai shrimp has dominated the market in the USA and they are now overtaking the pineapple market. Thai rice has been a major player in the imported rice market within the States, for as long as I’ve eaten the stuff. It would seem that export is the easier direction of business for farang, given you wouldn’t even have to practically have a Thai-based company. Many firms export Thai goods and if Thailand is like other countries, as long as those goods are not resold in Thailand, a Thai registered company is not required. As for what goods to export and to which market, you would need to look at where your contacts are, what you know, and which markets and goods represent easier, less competitive niches you could afford to participate profitably in. If someone knows how to do this analysis and understands these concepts at a reasonable level, then they may be ready for a chance at exporting or importing. If not, as I wasn’t a few years back, then I’d suggest they spend more time looking at ideas, thinking about them, and studying on the concepts they don’t understand. It takes time to find areas you are comfortable starting potential ventures in and it takes time to pick up on new ideas.

Land and real estate seems to be going thru another boom cycle in Thailand, like it was before the financial crash in LOS in the late 90’s. In many ways, Thailand’s current boom seems to mirror that of the USA, as does it’s stock market. In the USA, when the stock market crashed, the real estate market only went higher as capital sought new homes. If Thailand’s property market follows the USA example, then real estate and land may go higher in Thailand. However, as long as it doesn’t take a dump, any farang that can buy on leverage may have good opportunities. This is especially true, if you work in Farangland or make Farangland salaries, but can get a loan from a Thai bank. Imagine a situation where you could leverage a small down payment and make a large return via the annual appreciation on the full property’s value? And if the property market drops, if it is a non-recourse loan with only the property as collateral, what have you lost in Farangland? Only your credit in Thailand would be hurt, not the credit in the UK, New Zealand, the USA, Australia, etc. I am not aware of a Thai bank being able to make collection efforts or to impact credit histories in the USA, specifically, unless USA based loan papers/contracts are transacted. That does not appear to be the case, from what I have seen personally, though I am still learning. The only problem is that farangs are restricted to only owning certain condos, and my memory is not clear if there is a restricted amount of land and house that can be owned in a restricted manner as well. The way to get around this is to own the company that owns the property or land, by having voting control of common shares in a company where Thai preferred shareholders account for the majority ownership officially. This all seems quite workable and plausible based on what other farangs have done and what Thai lawyers say is legal. However, the issue here is if you can find a Thai bank that will loan to a company when you, the income producer, are a person. I have not figured out if a Thai bank will accept a personal signature in support of a mortgage issues to a Thai legal company yet. Any one have experiences here? The other way to get into this market is to buy with cash via a Thai company. Just make sure the company is properly registered and you maintain it yearly to avoid losing the land or property. For these reasons, the Thai real estate market is promising, but difficult to get into for a farang.

Manufacturing is the last area I’ve noticed with good promise for farangs. It allows the owner to leverage on the cheap labor of Thai workers and export the finished goods to Western countries. Certainly, this is what the Japanese carmakers are doing with their Thai factories, what the commercial shrimp and fish hatcheries are doing with Tiger Shrimp and Tilapia exports overseas, and what the textile manufacturers are doing with their cheap shirts and pants. Because factories normally sell for $500,000 to millions of USD, they usually qualify for the minimum investment requirements for foreign firms wanting tax incentives and accompanying visas (for owners and expat employees) in Thailand. Better yet, established contracts are easier to keep and maintain, and allows the owner to work on building up new accounts. The barrier to entry here is obviously money and a higher sense of business acumen. For the mass of farang visitors to Thailand, who are likely well-paid professional employees and contractors, this level of entrepreneurial and business proprietorship skill may need to be built up. I certainly fall into this category.

There is one last type of business I left out. I would call it self-employment more than business though. You could find an online type of business or a type of business/venture you could run remotely from Thailand. I’ve read about certain posters and readers to this and other Thailand sites that mention vaguely there online or remotely based jobs. It would seem that opportunities exist in this area, though the profitable ones do not exist on the get-rich-quick Delphi sites or websites. The few I know that could make money are web designer (with Western clients preferably), outsourced programming (you need to be well-established and experienced to get these contracts), and equity trading. However, with the equity trading, I am talking more about those with a very large portfolio who trade infrequently for long-term gains. While day trading may or may not make money, I am not partial to it as a long-term income generator given the risk.

What is interesting is that many of these businesses, if not most of them, are not related to Thailand at all. They simply allow you to work from Thailand, as they are site independent.

Does anyone else have personal experiences on online or remotely run businesses? If this submission helped you out, and you can return the favor, send me an email.

Stickman says:

There is huge opportunity to make money in Thailand. Jut be a little careful because the Thai authorities can make it difficult for us and cutting corners can make us awfully vulnerable. We also have to be careful of not letting the locals see our success.