Farang Business And The Mafia
So you want to buy a business in Thailand. You've looked around and have found something that sounds right, but you have lingering doubts in your mind. Most of them you are able to quell or what probably amount to small issues and the type of issues that business owners face the world over e.g. lack of staff initiative can be overcome through training, less than honest staff can be dealt with by implementation of the appropriate controls, and so on. But there is something else that lingers in the back of your mind, the type of issue that is not so easily overcome. What do you do when the local mafia come knocking and what a slice of the pie?
There is a definite perception amongst the farang population of Thailand and even amongst would be farang residents of Thailand, that getting involved in business in Thailand means that one has to pay off Mafia or organised crime syndicates to be able to operate. Is this perception fair or is it a gross misunderstanding? This week I got in contact with a number of local business owners and asked them a few questions about running a business in Thailand and specifically, involvement or payments to the "Mafia".
My first victim was one of the most well known entrepreneurs in Sukhumvit, someone who has done very well and in many ways, is the yardstick by which other farangs in this stretch of the capital should measure the success of their success.
I do not know of anyone being pressured into a partner or extortion in my years of being here. This is true of the bar business and for sure in the foreign owned areas. Our leases are in written form with legitimate landlords. This may not be true in exclusively Thai areas, and I may be hesitant to invest in those areas. There is safety in numbers…i.e. Sukumvit foreign bar owners.
Now other types of businesses, I have seen horror stories. There are certain businesses you just would not go in. Taxi, hauling, farming, especially pig farming. Basically you need to be in a business that deals with other foreigners. However, building fees under the table have become very expensive indeed.
Another Sukhumvit bar owner had the following to say:
I am absolutely unaware of any mafia (Russian, Thai or otherwise) anywhere in Nana, Cowboy or other areas of Bangkok. I pay a very small amount of money to the authorities and feel that they are getting the short end of the stick because of all the bureaucracy they cut through and their mediation in disputes with fellow bar owners. They are also invaluable in taking care of customers who cause problems, employees who run afoul of the law outside the bar. I would much prefer using them for these matters than a legal system that drags on and on and requires constant payment to lawyers.
As to rumors about mafia…I have heard that there is some sort of Russian mafia involved in Pattaya and that Phuket nightlife is controlled by 5 major operators which is why they were so effective in their recent shutdown of nightlife to protest early closings. However, I have absolutely no inside information and these comments are no more than rumors as I don't do business or have inside information about these areas.
But is it only a Sukhumvit thing? What about outside of the capital? A bar owner in Pattaya had the following to say. We can kiss the rumour above goodbye.
Mate there is no such thing as any farang Mafia in Pattaya or Bangkok. If there is they have never knocked on my doors over the years. But I have to say a lot of wankers think they are connected, but it is all bullshit. Everyday the girls say "You Mafia boss!" "Yes tilac", is always the answer (it keeps their boyfriends out the way. Hahaha) Everybody is on the take, if you let them. You have to say enough is enough then after a while they will leave you be.
But what about away from the bar industry? Do farang business owners get approached by those in organised crime looking for protection money? In the English teaching industry, at least one school has been approached….but not by the Mafia. When the school
was first set up, local officials came by almost every day demanding payment because they thought they were a "hotel" – they probably thought it was the newest knocking shop on the block. The owner got the impression they were looking
for a monthly payoff. The school management kept insisting that they were a school until the officials finally gave up.
Speaking with one restaurateur in a central city area, he said that he wanted to do things right so they actually went straight off to the boys in brown to discuss his business, what they would be doing etc, and to make sure that they were legal and totally
above board. He pays a very small amount of money to the authorities and they come by and check on his business, literally making sure everything is ok, the premises are in order and no-one is loitering. The local boys in brown have assisted him
with a couple of minor issues including the removal of undesirables and even assisting when some illicit substances were found on the premises. Needless to say, he is very happy with the assistance he has been given and even went as far to say
that the relatively small fee he pays is much cheaper than the cost of a security guard.
What about Hua Hin? I managed to get in touch with a gentleman who used to be in business down there.
I built and ran a restaurant / bar in Hua Hin a few years back and had no problems really. Sure, Police, Immigration or Tesabaan (city council – Stick) came around a few times but I had all my permits in order, taxes paid, work permit etc, so no worries. No organised 'mafia' lurking about that I could see. Mind you, this is Hua Hin we're talking about. Best place in Thailand to live or have a business, in my humble opinion.
And what about Phuket? How is the situation down there? A Phuket bar owner had the following to say.
I have never had any problems with the mafia or seen them. I don't pay any money to anyone. I never heard of mafia controlling the bars except for one owner who had a small, cheap bar in Karon Beach who had to pay a taxi driver 500 baht month for protection.
But there was one story that reached me that was rather disconcerting, a story about a small bar owner in Ko Tao. He had built up a nice little business on the island when early one morning just as the sun was coming up, three men came into his bungalow
with guns. He was told in no uncertain terms that he was to leave Ko Tao that afternoon and that if he didn't leave that day as had been requested, then he would not live to see the sunrise the next day! There have always
been hushed whispers that Samui and the smaller surrounding islands are a law unto themselves and that care needs to be exercised there. True or not, I have no idea, but this story certainly gives credence to it.
One cannot deny that there is some risk in investing in Thailand, but the type of risk we're talking about here seems to be confined to the type of business that one is involved in. From my findings, I wouldn't let any misplaced fear of Mafia
involvement, extortion or protection rackets put you off buying or investing in most businesses in Thailand. Common sense suggests that investing in the types of businesses which farangs are already involved in would be a relatively safe bet.
However, if you are running a business which is in that sort of grey area, and anything with nude, dancing or available girls could be considered grey, then you might have to pay a little extra tax. But then everyone knows that
WHERE IS THIS PICTURE?
It was one of the Thai Airlines buildings.
No, it ain't the defunct White House gogo bar.
Last week's pic was of the new Thai Airways flight crew building. The new big building is pretty much the same design as the old one, just a lot bigger. This is where the flight simulators are as well as the place the flight attendants get trained. A lot of eye candy can be found there from all accounts. This week's pic is somewhere in the capital and no, it ain't the now defunct White House Gogo Bar in Clinton Plaza. Each week the first reader to correctly state where the pic is by email to me wins a 500 baht credit from Tony's Bar in Soi Cowboy. Please note that the credit MUST be claimed within two weeks. So, to claim that prize, you must be in Bangkok at some time in the next
FROM STICKMAN'S EMAIL INBOX
Invasion of wholesome Aussies.
I work in the nightclub industry in Melbourne, Australia and I have to tell you that it seems everybody I talk to is going to Thailand over the Xmas period. These young guys & girls will mostly spend their time in Chang Mai and the East Coast Islands. They have never heard of Stickman and they will not be going anywhere near gogo bars. They spend all day on the beach, appreciate the Thai culture & scenery and at night they chase Europeans in the clubs. Certainly the crackdowns and closing times saga has had absolutely no effect on this demographic of tourist / traveller to Thailand. Perhaps this is the “quality tourist“ that the Taksin government has been trying to attract?
Now you're the attraction!
You mentioned tour groups in Nana – wondering if it will become a trend. Yes, I think so. Last year, in Pattaya, I was having dinner at New Orleans restaurant. That restaurant is right in the middle of the gay section of Pattaya. During the 90 minutes or so that I was eating, at least three tour groups walked through the soi, following their guides like flocks of sheep and hawking at the early evening activity. Most were carrying cameras. All were Asian – I will guess Korean.
Japan, Thailand, same same?
Interesting subject you chose to write about in this week's weekly Stick, about having lived in Thailand for seven years and not made any genuine Thai male friends. I've lived in the Land Of The Rising Sun for 14 years and have encountered exactly the same problem. I am fluent in the language of my host country, and paradoxically find that the longer I live here the more the reality of having what a Westerner would consider a "true" friend is an impossibility. Strange and sad really, but that's the reality: birds of a feather flock together.
Thai male friends.
Having been in Thailand for the past 15 years myself I find it difficult to be friends with Thai men. I don't know what it is but I believe Thai men have among other things an ego problem with farangs. I can never be sure that they will ever open up and tell you what they think or how they feel. Perhaps they are scared of face loss or something. Perhaps it has something to do with the fact that I have a greater earning capacity than them despite the fact that I do not work in Thailand. They fail to realize that I and other Farangs living in Thailand worked very hard for our qualifications and progressed in our chosen professions because we earned the promotion and not because we knew someone who could fix it. I have just purchased a new Mini Cooper and the comments received from Thai neighbours range from being pissed off to we are stupid because the car is sooooo small that we will never get our money back on it. They fail to realize that I just wanted the car because I like it and will have many pleasurable hours driving it.
Will tourism save the day?
A number of Thailand pundits have been predicting (and hoping for) a meltdown in the country's economy, but it just ain't gonna happen. This is despite bad loans held by banks and record household debt. Tourism officially accounts for only a small percentage of GDP, but its impact is grossly underestimated. Figures do not include for example the amount of money tourists spend in shops, or inflows of cash from foreign mongers to the Isaan property market. Most important of all, tourism provides the country with colossal amounts of foreign capital which are exchanged against the Thai baht. With huge reserves of foreign capital in the central bank, Thailand will be able to withstand any economic downturn or speculative attack on its currency. And with the euro at record levels, 2005 will almost certainly be a bumper year for tourism.
"And the top of the morning to you sir, what is your interest today if I may ask ?" "Well I have just been informed of a huge promotion at work, so I was wondering if there was possibly a Mercedes model here that I could afford?" "No
problem we have motors that instantly convey all levels and stations in society, it's all about how much status you wish to convey to the public. If I may be so bold to enquire just exactly what sort of level of face you were thinking
of acquiring today sir?" "Well to be perfectly honest, I've no idea, what sort of face would 3 million baht would buy me ?" "Oh deary me, that's not the sort of answer I was looking for. 3 million baht only gets
you in on an entry level option – a sort of poor boy's sandwich, looks as if you are desperate to acquire face at any price but can barely afford it. For genuine recognisable face we are looking at 5 million baht, and even at that figure
you won't stand out in the crowd, true face really only starts at 8 million baht." "Well I have got my life's savings that I suppose I could dip into, but I had really set that aside to put down as a deposit on a mortgage
for a home". "Now come on sir, who on earth is going to see your home, when did you last entertain there? It's your car that everyone visibly sees every day. That's where you can really impress and influence all your friends,
family and employees. Now as it happens I've got the perfect motor for you, a new model that's just come off the production line that has been severely limited to quotas due to the demand. For 10 million baht this model guarantees
face at every occasion, to the degree that we are offering a money back promotion if you are not a fully satisfied customer". "Okay you've persuaded me, I'll buy one."
My name is Song. I am look for new boyfriend because my old bf go and leave me alone so much. About myself, I am good looking but act rather childish at times. I prefer to believe in the beautiful dream rather than the truth about the world. I like fluffy
toys, and to wear clothes that make me look like I am in kindergarten. Sex generally is boring to me and I only do it because my bf likes it. Also, I hate street food because the food is dirty. Plus I am good girl and never consider in my
life to give a blow job (I think it is weird). So if you are a young man that likes a pretty girl but is not require sex, and if you can put up with my childish behaviour and also never talk about anything serious (because I hate to talk like
that) you are the perfect match for me. I prefer a man with no backbone who will do anything I ask and always be polite and live in my happy, pink, fluffy dream world, where we can both be happy dumb dumbs.
The old Vixens in Nana Plaza which will be called Boss Hogg's is still on schedule to open before Christmas. However, they have altered their free drink policy on Christmas day. On the 25th, the bar will be open from 5 PM until 1 AM and they will
sell drink tickets for 30 baht, with no limit to how many a customer can buy. From every ticket sold, 20 baht will go to a children's charity, which is to be announced, and 10 baht will go to the staff tips that day. Boss Hogg is hopeful
of raising 20,000 baht through drink sales and will match it baht for baht in the true Christmas spirit of giving. This special is for one day only. Go on, it's for a good cause!
It has finally happened. Business in the bar areas has picked up and for the time being, the bar owners cannot moan and groan about bad business. At peak times it can be hard to find a seat in some Nana Plaza bars. The same can be said for the more popular bars down at Cowboy. Pattaya has picked up too. Patpong just rolls on and is the least affected by seasonal change.
In what has to be the biggest bit of news in the nightlife industry for quite some time, and something of a real surprise, it would seem that there might be some variety available in the nightlife industry with the opening of a new club open in Pattaya this week, in Soi BJ next to TQ2, called Las Vegas. Get this, there are only white girls there! In the Thai owned, Swiss managed joint there are 16 Russian dancers, not pole huggers, in various modes of dress…from fully clothed to topless to revealing their little Tasmania just before the lights dim. The shows are above average, even including a topless Can Can number. There are no Thai dancers there! The Russian ladies are big, particularly in comparison with Thai ladies, but well proportioned – read busty, and attractive to pretty, only one howler in the whole 16. A warning for anyone who fancies younger ladies, they're not the youngsters usually found in Thai a gogos, these ladies appeared to be between 25 and 30. They are available short time (1,000 baht plus 500 baht bar fine) or all night. Drink prices are above average as well at 130 baht. Friday night the joint was packed with men from Taiwan; Saturday night the only Asian customers were two Thai men and four Thai ladies (who seem to adore the white skin and busty Western women); the remainder were farang – mostly Russian men. Women from the former Soviet Union have always been available in Thailand, on the fringe, if you knew where to look, but bringing them truly mainstream has, as far as I know, never been tried before.
Police are being more diligent about clearing Beach Road of working girls – at least in the area around Royal Garden Mall. Most of the regulars (girls) have moved north on Beach Road, from about Mike's Shopping upward to Soi 9 or so.
As mentioned earlier, bars continue to serve into the wee hours and beyond, with many on the Walking Street sois operating round-the-clock. They welcome patrons flowing out of discos, gogo bars and beer bars at or about 2 to 4 AM and maintain a healthy business until 9 or 10 AM. One exception is JP Bar which was busted and has been closed for 60 days. Word has it that the owner is unable to relate to police. Despite national mandate on 1 AM closing hours, discos are pushing the limit with seeming impunity. Walking Street dance clubs operate until 2 or 3 AM (Tony's until 4 AM). Others don't begin rolling until 1 AM and stay open for hours.
Why is it called Soi Cowboy? Surely Soi Cowgirl would be more appropriate? I mean, the girls are farm girls, cowgirls so to speak, so perhaps a name change is in order?
There are two missing persons reports this week. If you know either of these people, you might like to ask them to email the appropriate email address. The first is from Randy Rouse from Seattle, who is looking for Tony (Anthony) Murphy who should be in his early 60's. Randy's email address is email@example.com. The second one is Dalene Webb who is trying to locate an ex-husband who is an English teacher in Hua Hin. Her email address: firstname.lastname@example.org.
The tenants inside Nana Plaza were informed that their leases will be extended another three years but for the first time they will have to pay key (black) money in advance. Ground floor bars must pay 200,000 baht per single unit and it is 100,000 baht per single unit on the second floor. So each bar is having to cough up between 100,000 and 500,000 this month, tax free, for the landlord, and with no notice. Leases expire inside on the 31st. Customers should not notice anything different from usual apart from the odd grump bar owner, pissed off at having to part with more than he should have to.
I was browsing through one of the major dating websites recently, the one where all sorts of guys are having a lot of luck meeting the local lasses. But I have to wonder about these girls who post a picture of themselves with some guy! Don't they realise that that is a major turn off? You gotta laugh.
Two branches of Subway on Sukhumvit Road, the sandwich shop, not the underground train, the one at the footstep of BTS Nana station and the other one next to the Landmark Hotel will again be donating 100% of their total soft drinks revenue sold on the 18th, 19th for charity purpose. All the proceeds from these two Subway shops will go towards buying computer (s) for a learning center in a remote village.
I am also happy to report as well, that O’ Brains Restaurant on Sukhumvit Road between Soi 3/1 and Soi 5 (next to the Tony Roma’s) is involved with the Friends of Baby Nong. You can help by purchasing a Baby Nong teddy bear for 500 Baht. 100% of those funds will go to educational projects in rural areas in Thailand where they purchase school books and uniforms for village children, etc. For more details, check out Baby Nong.
O’Brian’s is also a drop off point for any toys or clothes you like to donate. They have selected the Duang Prateep Foundation who will get all presents donated.
The lights are on in Rajadamri Road and the surrounding streets! Ok, so there are not as many as last year, but still, it looks pretty good and this part of town is well worth a stroll.
Television is looking for you! They are looking for a male farang host, aged 25 – 40, with a crazy sense of humour and good improvisation skills, must have camera appeal and some experience, a thinking person who can contribute to the team and not just posers who deliver lines, journalism training would be an advantage but not essential. Excellent English is needed for this international entertainment format and excellent bi-lingual skills (spoken English and Thai) would be of assistance. You must be located in Thailand, so if you think you have what it takes to be the face for this program, please e-mail your details to email@example.com for a screen test. (Show-reel and CV would be advantageous but not essential). Castings will take place on Tuesday 14th and Wednesday 15th December 2004 at The Studios, 254 Lad Phrao 107 Bangkapi, Klong Chan, Bangkok.
Seldom does a day go by when I do not get an email from someone complaining abut the state of the farang oriented nightlife industry. I gave up running such pieces a while ago, but I still think too many people are being unreasonably harsh and overly negative about it all. Yep, attitudes may be much worse than they were in the past, but then, it is all so, so cheap. If we jump into a time machine and go back to a time 8 years ago, drinks in the major bar naughty nightlife areas were 70 baht in the gogo bars and bar fines were 300 and the girls wanted 1000 baht. But the baht was, to make things simple, 25 to 1 to the US dollar, which equates to $2.80, $12 and $40. Today drinks are 110 – 125 baht, barfines are 600 baht and girls want 1,500 – 2,000 which is $3, $15 and $37 – 50. The truth is 8 years of inflation and the prices have not gone up for many tourists, though if you hail from a country whose currency has been hammered, it might be a little different. By the way Jack Daniels was 580 baht and now is 870 and Johnny Walker black was 635 and now is 975. Rents have increased by 75% when compared with 8 years ago. All in all, I know of no place where this kind of entertainment is available at such a low price.
Have you ever seen so many attractive lawyers?! Wow!
Ask the Sticks
Mrs. Stick is here to answer questions surrounding anything that confuses you in Thailand, particularly issues of the heart. Please note that for general bargirl related questions, Mr. Stick might answer them. It has to be said that Mrs. Stick is not your stereotypical Thai woman. She is not Buddhist and she is not shy to criticise things about her own country and culture, although she remains proud to be Thai.
Mr. Stick will try and answer the questions which Mrs. Stick is not so sure about.
Question 1: How about the word "farang"? Does it have any derogative connotation? Would you say about your husband, he is a "farang"? I notice that some of my Thai
friends never use this word for me, but they'd call me westerner or mostly European; but talking about westerners in general, they might say "farang". Would "farang" apply for the western business man on Siam Square as much as for a balding fat sex tourist in Pattaya?
Mrs. Stick says: The word farang does not have any negative connotation. It means white skinned people from North America, Europe and Australia and New Zealand. There might be instances when it is used in a negative way by a person or people talking about farangs in a negative way, but no, the word itself does not have a negative meaning.
Question 2: This happened with ladies I meet occasionally (and something might develop or not): 1) Fon accepts my invitation to a cosy restaurant near Silom Road. Just when the food turns up, she answers a phone call. She calls back for about 30 minutes, gesturing me to start eating. Later she says "Sorry, he my old friend, haven't heard him long time." 2) Wan suggests a meeting on Sunday 11 AM. I call her at 10:30, and she says: "Sorry, 11 AM cannot, I want to meet 6 PM." Had I known that before, I'd have gone out for a day trip. Would you accept this behaviour from Thai or western friends?
Mrs. Stick says: The first example with Fon is super rude and there is no excuse for that at all. Some Thai people still have a lot to improve on in manners. The second example is less clear cut. It would seem that some people simply do not understand the basic concept of respect for other people. Perhaps she thinks that you are so keen on her that she feels she can do anything with you and you will still come back to her. Perhaps she feels that she can control you which in turn makes her feel good. Like I have said so many times to Mr. Stick, many Thai people have no sense of respect. I can remember when I was in primary school and the teacher taught us table manners, both Thailand European style. This stuck with me. I wonder if we need to introduce a new module into the school curriculum about basic social skills?
Wow, getting this week's column out has been a real struggle. First there was the old cow at work who has been overloading me with all sorts of shit. Then there was an unexpected, although very pleasant, day trip to Saraburi yesterday, the day I usually use to knock out most of the column. And then when we got back from Saraburi, the Mrs. had forgotten to pay the phone bill so we had been disconnected. Hell! So no internet until Sunday, and on a day when I was dependent on feedback from business owners to knock out the opening piece in the column. But it isn't yet 4:00 PM on Sunday and the column is complete. A relief!
Your Bangkok commentator,
Thanks go out to Dave The Rave, Mr Write and Grasshopper.