Doing Business in Thailand

A reader told me the other day that my series of “starting business in Thailand” was a bit skeptical as if I was marked by doubt that it was possible to do business successfully in Thailand.

Not at all, Thailand is as good a place to do business as any other. What I’m trying to convey in this series of articles is that investors should not expect miracles because they will be confronted to 3 problems.

Many foreign investors that come into Thailand to start their own business:

1. Were not business owners in their home country. They might be experts in their sector of activities but they were not business owner and believe me as we say in France “there is a long way between the cup and the lips”. What I mean is that there is a world of difference between being good at what you do as an employee and running a business even if you go in the same sector of activities.
2. Are starting businesses from scratch meaning that they will face all of the hurdles faced by “Start up Companies”. The Wall Street Journal estimated in 1999 that 65% to 70% of new business in the US will fail within the first five to eight years of operations and this estimation is true everywhere else. Starting a new company even if you are a professional is always a gamble.
3. The Start-Up factor is aggravated by the fact that newly arrived foreign investors have generally no knowledge of the language, of the legal framework and of the market.

My purpose is not to discourage foreign investors but to warn them that they are about to engage in a endeavor that is fraught with obstacles and that they will have to face numerous challenges and traps while implementing their investment.

The best way to convey this need for prudence is when discussing a type of business to show to potential investors a few of the traps and difficulties awaiting them.

I know that a lot of you would like me to give you the “10 tips to do successful business in Thailand” unfortunately and contrarily to what other would like you to believe those 10 tips do not exist.

I have over my 12 years in Thailand assisted hundreds of customers. Some of them were successful other were not. While it is always possible to see why a client fails to understand why another succeeded is not so simple.

What 12 years assisting foreign investor in Thailand taught me is that it is in most of the cases possible to anticipate failure but not to prognostic success. Again, I know that it is not what you want to hear, but the fact is that being able to anticipate failure is valuable because if you can anticipate an outcome then you can plan in advance to avoid it. And is not avoiding failure the beginning of success?

Overall the real keys of a successful investment in Thailand is not to be found in a pre-established list of tips for success but results from common sense.

One should not:

1. Start a business on a hunch because starting a business requires a lot of planning;
2. Start a business into a foreign country without a minimum understanding of the legal framework and of the many traps awaiting them. Relying on rumors and half truths is not enough.
3. Start a business without adequate investment and knowledge of the sector in which he/she is investing.
4. Avoid the “false good ideas”

A very good example of “false good business idea” was web design. In 2002, 2003 hundred of foreign investors have started web design companies because it was hip and there was a definitive need for this kind of services. Out for hundreds of those webs design companies how many are still in business today? Not many. Why, simply because Thailand is a country of industrious people. As soon as they knew how to do it a lot of young Thai web designers went on their own offering their services as independent web designers. They did not have companies, did not have any employees, and did not have any charges or recurrent expenses and they could afford to offer their services at prices against which companies could not compete.  The only that survived were the companies that were able to offer to their customers added value beyond simply web designing.

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If you want to Do Business in Thailand 

About the Author:

The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.

http//:www.renephilippe.com

© Copyrights 2009 – Rene Philippe Dubout – This article may be reprinted if information about the author, the websites, and the URLs remain intact

contact@renephilippe.com

Originally posted 2009-11-12 02:41:19.

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