Doing Business in Thailand

Should you be wary to do business with Thai people?

Not really because Thai people are honest. There are always exceptions of course but as a foreigner coming to do business in Thailand you have to be more wary of citizens from your own country than from Thais.

The common mistake of a new comer in Thailand will be to look for other nationals from his/her country for guidance and to trust them for the simple reason that they all come from the same country.

My personal experience is that most foreign investors that were cheated in Thailand were the victims of other foreigners, often nationals of the same country. Overall, foreign investors need to be wary of other foreigners more than from Thai people, who are honest.

May I do business with my Thai Girl Friend or Wife?

Truth is that while most Thai women are honest they are also women before anything else.  You all heard the story of the poor Dick, Tom or Harry of this world that were victims of their unscrupulous Thai wife that took their homes, businesses and life savings.

These stories are not urban legend, they are real; but what the stories do not always say is that the Dick, Tom or Harry that get cleaned by their Thai wives or girl friends had it coming because they cheated on them first, and what happen to them was the local application of the concept of “revenge divorce”, which has become common currency in Europe and the US.

How many times have you heard in your own county a woman menacing to take her husband for everything he had once she found out he was cheating on her. Thai women are not different but they do not need to hire a pricey lawyer to do the job. Dick cheated and he was cleaned, that is all there is to it [of course I have also seen cases of good guys that were really victims of unscrupulous womens but they were a minority].

Put it this way do not complain you burnt yourself if you play with fire. Conclusion you can do business with your Thai wife or girl friend for as long as you can trust yourself not to cheat on her.

Are Thai businessmen reliable?

Yes, they are reliable and many foreign investors had made successful and durable joint ventures with Thai businessmen.

Of course whenever there is a rule they are also exceptions. My experience is that foreign Thai joint ventures that failed did so; not because the Thai partner tried to take advantage of his foreign counterpart; but because of misunderstandings over who invested what and who received what.

Often, foreign businessmen are so eager to do business in Thailand or Thai businessmen are so eager to do business with a foreign partner that they will prefer not to or forget to discuss sensitive issues with their soon to be partner.

This is a mistake. The best time to discuss sensitive issues (such as the amount of investment requested from each partner; the schedule of investment; the ratio of profit sharing; whether each partner will be allowed to charge normal services fees or normal price when they are selling services or products to the joint venture company and so on……), is at the beginning of the business because the parties are so eager to seduce or please each other that they will be more eager to find fair solutions than once the business has begun operating.

Are Thai businessmen knowledgeable of Thai legal frameworks?

They are not. While Thai laws are formal Thai people are not. I never know whether Thai businessmen do not understand Thai laws or whether they do not care for formalism.

Foreign investors who discuss joint ventures with potential Thai partners will often leave the meeting room with the feeling that the projected venture does not pose any problems because of the tendency of Thai businessmen to say yes to everything and also because of their absence of knowledge in relation to Thai laws that regulate foreign investment.

Once he has met with his lawyer the foreign investor will soon feel stuck between two persons telling him different things. On the one hand the potential Thai partner seems to be saying that the investment is viable without problems, on the other hand, his lawyer that seems to be more cautious.

As a result, the foreign investor will be unsure whom to believe and will be left with a bad impression about his potential Thai partner. Was the Thai partner trying to take advantage of him?  Not at all, the thing is that the Thai partner is so eager to do business with his foreign counterpart that he wave the possible legal difficulties to make the deal possible.

This Thai partner never intended to cheat his foreign partner. Either he was not aware of those difficulties or he was aware of them but hoping to solve them the Thai way and did not think it was necessary to bother explaining them.

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.

Originally posted 2009-07-24 04:10:21.

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3. Doing Business inThailand: Understanding Thai Legal System
4. Doing Business in Thailand: Living in a state of sin
5. Corporate: Disclosure requirement of Thai shareholders
6. Thailand Taxes: Understanding Thai corporate income tax
7. Doing Business in Thailand: Is it a developed and safe country?
8. Doing Business in Thailand: Should I “Way” or should I not?