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Pattayarns

Starting a business in Thailand?

October 24, 2012

For anyone planning on running a business in Thailand I can advise one thing above all others, patience. 

I’m not trying to put you off but here are some of the experiences, set-backs and inconveniences that I’ve had to surmount so far.

THE LANDLORD

My business partner was already living here and knows the country very well. He works a four week rotating schedule abroad and couldn’t be here all the time himself to look after a business. That’s where I come in. I quit my boring job back in the UK and moved to Thailand for a life of sun, sea and hopefully, business opportunity.

He’d had his eye on a property for our fledgling enterprise and about three months before I arrived he made the first approaches to our potential landlord. The property is a large patch of land with a tall roof; something like the forecourt of a used car garage. So it’s not too complicated, there is no electricity or plumbing there yet, only a disused office that we will have to renovate at our own cost.

It took the three months before I arrived and several meetings with the landlord’s representative for my business partner just to reach an agreement on what we would actually be renting. There’s a space at the back of the property which has been used to dump all kinds of scrap and junk.  It’s enclosed by our roof but the landlord refused to rent it to us. There was a similar dispute along the side of the property. No ground plans were ever produced and the landlord refuses to even talk about us seeing them.

With the property being empty for so long it had become a local fly tip. My business partner wanted the trash removed before we signed the lease to move in. Understandable I think? Eventually he won that battle; they came and removed most of the trash and also cut down some very nice trees that were at the front of the office for no discernible reason.

I arrived in Thailand just as the contract was being drawn up for the lease. It was to be another two months before we actually signed it. The first lease they offered included a clause that if we were even one day late with our rent at any time the landlord has the right to lock our gates and seize all of our assets! We handed the first contract back and asked them to change that and two other minor points. When we got it back they had changed fourteen points, it was almost a completely different contract. It now included even more ambiguous clauses that could really cause us serious problems if we signed it. Like the one in which no matter what happens were are not allowed to sue the landlord for any reason.  They might as well tell us they’re planning to rob us.

To put this in context the property was empty for approximately three years before we enquired about renting it; just sitting, rotting away. It’s in a good location for us and we were willing, and are now paying, quite a substantial amount of rent. The hassle that the landlord put us through to get our hands on it took over five months all together. Some of that time my partner was away and couldn’t battle them but they would deliberately wait until they knew he was leaving the country and then change some aspect of the deal delaying everything until he got back again. I was starting to believe that causing us problems was more important to them than making money. They essentially conned themselves out of five month’s rent in their attempt to con us.

THE LAWYERS

After I arrived and while we were still battling our reluctant landlord we were also trying to set up our company. We wanted everything to be legal and as solid as possible. The authorities here have no qualms about shutting you down or arresting you if they think they can get a few thousand dollars’ worth of bribes out of you.  To this end we shopped around a few legal firms, getting wildly different quotes and finally settled on one with a good reputation that’s been in Thailand a long time. Their representative was articulate, well informed and knowledgeable and they gave us the best price.

The ineptitude they’ve shown at every step of the process since has been frustrating, inconvenient and expensive in terms of the delays they have caused. We first engaged their services at the beginning of August. We got together all the things that they told us we required. We needed three Thai directors per foreign director; their ID’s and signatures, several copies of each. Mountains of paperwork for us to sign and I had to go to Malaysia to get myself a specific kind of visa. We got everything prepared before my business partner left for work and we thought everything was ready so that in his return he’d call in at their office, hand over his visa and they could file the documents with the Thai government.

Is this what happened? Of course not. 

When he got back they said thanks for the visa. Now you need to get these documents from your landlord. Hang on a minute, I said, you told us we had everything already. Well, yes, except these documents from your landlord, they replied. We had been telling them from day one that our landlord was notoriously difficult to deal with and could they please contact her on our behalf. They told us that was no problem and would handle it. They had done nothing, forgot it seems.

Surprisingly the landlord was very helpful in getting us the documents we required. They prepared them within a week and left them at their office in Bangkok for our lawyers to collect. It sounds simple but with our landlord’s representative asking very nicely to be contacted in Thai and our Lawyers persistently contacting them, by email, in English, it took me a lot of phone calls and angry emails to sort out. The Lawyers were saying, we are contacting your landlord but of course the landlord’s representative was refusing to try and decipher their emails and why should she? I was actually on her side here. The least we could do was contact her in the language of the country we’re doing business in. If we hadn’t been so deep into the process with this law office we would have demanded our money back and went elsewhere. 

It’s now the end of October. I had to pay in advance for a courier to collect the landlord docs before out Lawyers would send one to get them. Approximately 300 Baht or £6, I won’t say how much we’ve already paid them but it’s a lot more than 300 Baht. My business partner had to go back to work again before we got everything prepared. So that means another month before we can file.    

I have sent several emails and made several more phone calls to make sure that everything is in place for the docs can be filed when he gets back this time. I have been assured that it is. But then they told me the same thing three months ago. I am a very calm and patient man but if we don’t get our company set up this month I am in danger of cracking up. 

No wonder this is a Buddhist country. You require his level of patience to get anything done here. 

by Paddy Pattaya. Find out more about Paddy Pattaya here.

Categories: Doing business



2 Responses to “Starting a business in Thailand?”

  1. well everything has to be done in sequence – you should have got a step by step from your lawyers as you cant do it out of order as you wont have the correct paperwork

    we do this everyday and our customers are very happy

  2. Paddy Pattaya says:

    Well I guess we should have come to you then, our lot were useless. They did give us a step by step but then didn’t follow it at all. They were very convincing during the sales process and seemed very professional but as soon as they got our money all pretense of customer service was abandoned immediately. We have new lawyers now and everything has been very plain sailing and easy with them.