| Introduction | | | | with a local business is that you are earning Baht, |
| You've been to Thailand and fallen in love; either | | | | which has inherently less spending power than |
| with a beautiful Thai lady or Thailand itself. You've | | | | Dollars or Sterling. It is much better if you are |
| made the decision to move to Thailand. But the | | | | servicing visiting Westerners (or other wealthy |
| big question is how do you finance it? Well before | | | | expats) who either pay in Western currency or |
| you figure out how to finance it you need to | | | | are prepared to pay a premium for products and |
| figure out how much money you need. In this | | | | services (they are mentally converting dollars to |
| article I lift the lid on some ways to fund your | | | | Baht and saying "wow, that's cheap!"). |
| stay in Thailand. | | | | Another option is to create an export business, |
| How much is enough? | | | | where you can pull in foreign currency. |
| Let's say you are going to move to Bangkok. | | | | If you plan to set up a retail business such as a |
| How much you need depends very much on the | | | | shop, bar or restaurant, always go through the |
| kind of lifestyle you typically lead and want to lead | | | | details of the lease with a trusted expert in |
| in Bangkok. If you want to have a big, posh | | | | minute detail. You need to know exactly where |
| apartment you'll pay more. If you want to run a | | | | you are with the lease; you need to closely |
| car you'll need more. One man's lavish lifestyle is | | | | examine the small print. A badly negotiated lease |
| another man's subsistence level existence. | | | | is the downfall of many an expat business in |
| I am going to shock a few people by saying I | | | | Thailand (and in the UK too!). |
| recommend at least 70k Baht per Month (BPM)! It | | | | In short Westerners (both in and out of Thailand) |
| is possible to live on less than 70K in Bangkok, | | | | are where the money is, so try to target them if |
| and much less in the provinces. I would say for | | | | possible. The other thing is to try to keep your |
| Bangkok you need to be earning an absolute | | | | local employees to a minimum, this helps keep |
| minimum of 35,000 BPM these days. Yes, I know | | | | things simple. However, as Thais tend to have a |
| it is possible to live on less, but frankly who wants | | | | different work ethic to that of Westerners, you |
| to? | | | | might need to allow for that by adding extra |
| The Thai government believes you should have at | | | | staffing capacity, a real dilemma! On the upside, |
| least 60,000 BPM to live on, as that's about the | | | | wages in Thailand are far lower than you might |
| minimum for a retiree visa that you'll need to | | | | expect, especially for a business pulling in foreign |
| have. You can definitely survive on 35k (or even | | | | currency, so you can usually afford a bit of |
| less), and you can even participate in various | | | | redundancy in the system. |
| activities on that budget but I don't think it's easy | | | | The business of buying and selling businesses |
| and you will have to compromise on quality of | | | | If you have the business acumen, there is also a |
| apartment. Plenty of people will recount tales they | | | | great business to be had in buying and selling |
| know, where some guy lives on 20k BPM and the | | | | businesses for profit in Thailand. Because many |
| Thais manage on even less, but it's a frugal | | | | businesses are bought and run by expats without |
| existence. In short you will have constraints on | | | | the appropriate experience, those businesses |
| the sort of lifestyle you can lead, and that's | | | | often under-perform. |
| contrary to the whole idea of going to Thailand in | | | | Also, many expats get fed up with Thailand, want |
| the first place, which is to have a great lifestyle. | | | | to move elsewhere, become ill, or simply want to |
| On a personal note, in my opinion visiting or living | | | | retire back to their home country. This can |
| in Thailand is about being able to enjoy the best | | | | represent a profitable opportunity for the astute |
| of what Thailand has to offer, according to tastes | | | | business person, as businesses can then be picked |
| and interests. For example I am a keen golfer, so | | | | up on the cheap. In a way you make your profit |
| being able to play at some great courses in | | | | at point of purchase, because it's the price you |
| Thailand is something I like to do. Likewise with | | | | pay that will often determine the profitability of |
| Scuba diving, I like to be able to take courses to | | | | the outcome. You can then take the business on |
| extend my diving skills and travel to the top diving | | | | and depending on the nature of the business |
| spots to experience them. Bangkok is a hub of | | | | make it more profitable and 'flip' the business to |
| Asia, and being able to travel out to places like | | | | an eager expat a few years down the line. |
| Singapore, Bali and Philippines is something that is | | | | Businesses like restaurants, guest houses, export |
| definitely a must on my agenda. If I don't have | | | | companies and retail outlets are all big hits with |
| the money to do that what's the point of my | | | | expat prospective business purchasers, as they |
| being in Thailand? You don't need massive | | | | are perceived as "easy" and require relatively little |
| amounts of money to do this (which is one of the | | | | capital. Some reasonable businesses can be |
| advantages of Thailand), but I do believe you | | | | bought for as little as a few hundred thousand |
| need more than 35k BPM. | | | | Baht. You can of course go up to a whole resort, |
| One of the reasons people move to Thailand and | | | | which could set you back 50 million Baht. |
| don't have the lifestyle they envisaged is because | | | | Additionally, these small businesses can be started |
| they take jobs that pay a pittance. The truth is | | | | from scratch with a view to selling to an expat at |
| they don't need to, as I'll discuss later in this | | | | a premium a few years down the line. This |
| article. So having established that you can survive | | | | makes sense for the purchaser as start-ups have |
| on 35k BPM, but should probably be aiming for at | | | | a very high chance of failure, whereas a turnkey |
| least 70K, the question remains: how do you earn | | | | business, with a track record of profitability is |
| that much money in Thailand? | | | | much more likely to succeed (unless poorly |
| Teaching English | | | | managed). A good turnkey business will give you |
| The thing about the 35k BPM threshold is | | | | an 80% to 90% chance of success compared to |
| interesting because that is the typical salary that | | | | an 80% chance of failure for a start-up business. |
| an English teacher will earn in Bangkok. | | | | That makes them more attractive to expat |
| Some earn more and some less, but it won't be | | | | business virgins. |
| too far off this level. | | | | In fact, there are virtually unlimited opportunities |
| It's supply and demand. | | | | for creating profitable businesses in Thailand. It's |
| There is plenty of supply, some would say too | | | | an exciting environment with loads of (as yet) |
| much, and that keeps salaries low. Some teachers | | | | untapped potential. You do of course need to be |
| find they can't live on the salary and move on. | | | | a capable business person to run a business |
| Many Westerners who end up teaching English in | | | | anywhere; even more so in Thailand where things |
| Thailand only do it as a stop-gap, and after a year | | | | don't often work as one might expect. |
| or so of exploring Thailand move on to other | | | | I do think it's worth spending at least a year or so |
| countries. Some Western "teachers" are poorly | | | | in Thailand before attempting to set up a |
| qualified and use the work as a means to finance | | | | locally-based business; it will also help considerably |
| their bar-hopping escapades. This doesn't create a | | | | if you speak Thai. Thais will always assume you |
| very good impression of Westerners amongst | | | | can't understand Thai and it's surprising what you |
| the Thais, or even with their Western colleagues. | | | | can learn in that situation! |
| It has been said the quickest way to get rid of a | | | | One final thought is that if you are going to |
| Thai girl is to tell her you're an English teacher! | | | | Thailand for the relaxed lifestyle do you really |
| Expectations from the Thais and indeed the | | | | want to be running a local business? Running any |
| Western teachers themselves are often not high. | | | | kind of profitable business is a lot of hard work, |
| Even if you carve out something of a career for | | | | whether in Thailand or elsewhere. Always be clear |
| yourself, your salary will be lucky to push 60k | | | | of why you want to move to Thailand and your |
| baht. On the whole, for these reasons and others, | | | | goals. |
| the TEFL job market is not really "the best you | | | | Offshore Internet business |
| can be" in Thailand. | | | | This is the PERFECT business for those wanting |
| Before I get howls of protest please don't get | | | | to fund their stay in Thailand (in my humble |
| me wrong. There are some very talented and | | | | opinion). |
| dedicated teachers in Thailand and the Thais are | | | | Essentially you have a web-based business that's |
| very lucky to have them, but unless you are a | | | | located offshore (outside of Thailand). Your |
| dedicated and patient teacher I wouldn't chose | | | | website could actually be located anywhere. You |
| TEFL in Thailand as your next career. Always | | | | provide products and services through your |
| ascertain the motives of anyone who tells you | | | | website, with money going into a PayPal or |
| otherwise. | | | | merchant account. There are many advantages |
| It really does boggle my mind when qualified and | | | | to this type of business. |
| highly-skilled individuals give up fantastic | | | | Firstly, it can be administered from anywhere in |
| professional careers and work for a pittance as | | | | the world, including Thailand. Equally it lends itself |
| an English teacher in Thailand; there really is no | | | | to the lifestyle where you are based in one |
| need for it. I'm not saying teaching is a bad | | | | country for part of the year and perhaps another |
| profession, just that I don't believe people should | | | | for the remainder of the year (which is my |
| be (or need to be) doing it as a means to stay in | | | | favoured option, but that's another article). |
| Thailand. If you are a dedicated teacher who | | | | Secondly, it doesn't require any special visa or |
| loves teaching then that's a different thing | | | | paperwork, as you are not actually setting up a |
| altogether. | | | | business in Thailand. The business bank account |
| On a more positive note, if you are looking for a | | | | and registration of the business may well be in |
| job while you find your feet in Thailand, that gives | | | | your home country, so it's of no concern to the |
| you a chance to see how Thailand really ticks, and | | | | Thai authorities. A Cat 'O' visa is fine and the |
| to get a chance to interact daily with Thais, then | | | | application procedure for this is much more |
| teaching English makes a good starting point. Just | | | | straightforward than for the Cat 'B'. |
| don't do it for the money! | | | | Thirdly, the income generated will be, by and |
| Teaching in private International schools | | | | large, in Western currencies, so you should be |
| Private International schools are a different story. | | | | able to convert this at a favourable rate to Baht. |
| If you can get one of those jobs you are going | | | | Each dollar earned has far more purchasing power |
| to be sitting pretty as they usually pay Western | | | | than a Baht earned in Thailand. |
| level salaries and provide food, accommodation | | | | One of the best things about a web-based |
| and other benefits. I personally know of several | | | | business is it generates income while you sleep. |
| teachers getting paid in the range £25,000 | | | | You can be out playing golf, diving, eating dinner |
| to £40,000 pa. If you translate that into | | | | or whatever and you can be relaxed knowing |
| Baht, that's around 135,000 to 216,000 BPM at | | | | that your website is ticking away, generating you |
| today's mid-market rates. | | | | income 24/7. Now THAT's the way to run a |
| Comfortably over our 70k BPM target and a | | | | business! |
| substantial amount of money in Thailand. Nice | | | | Note that a web-based business is something that |
| work if you can get it, but such schools usually | | | | can be done in your spare time, so while you |
| only recruit experienced and qualified teachers | | | | may initially work in Thailand as an English teacher |
| directly from Western countries: very often UK, | | | | (or whatever), you can be building up your |
| but also Canada, Australia, NZ and USA. | | | | Internet business on the side, and after a year or |
| If you are serious about teaching in Thailand then | | | | so switch to the Internet business full-time. |
| you should think seriously about equipping yourself | | | | Setting up and running a web-based business is a |
| to get into one such school. However, unless you | | | | complex topic with many pitfalls, a lot of |
| are currently working as a teacher in the West, | | | | westerners try and fail, but it can be done. |
| that will take some time as you'll need to get a | | | | Freelance Consulting (and remote working) |
| suitable teaching qualification and a few years | | | | This is a great option if you like to go it alone and |
| experience, preferably in a shortage subject area. | | | | have a lot of self-motivation. |
| This is feasible in UK these days as the | | | | One of the big advantages of this over running a |
| government is actively sponsoring trainee | | | | more traditional local business is that you will be |
| teachers and there are various forms of | | | | very unlikely to need to employ staff and you will |
| incentives (including financial) that are available (see | | | | have negligible capital requirements. This obviates |
| | | | many of the problems that business owners can |
| Other work | | | | run into when they employ local staff. While these |
| Unfortunately low-paid English teaching jobs | | | | problems can be solved with experience, you |
| represents the bulk of direct employment | | | | might not want to go down that route, you are |
| opportunities in Thailand. There are other jobs | | | | supposed to be enjoying life in Thailand, not |
| that can come up: posts in IT, web design or | | | | stressing out over your staff! As a consultant you |
| something similar. There are various miscellaneous | | | | will generally have much lower overheads too. |
| jobs such as management, hotel work or factory | | | | Freelance consulting can be combined with other |
| supervision. These are also generally not very well | | | | activities (for example part-time English teaching). |
| paid. | | | | It can also lend itself (depending on what area of |
| Sometimes if you have sought-after IT skills you | | | | consulting you decide to specialise in) to being run |
| might get 45-65k Baht. Don't count on it though. | | | | quite effectively as an Internet-based business, |
| As a lot of the Westerners who go to | | | | this is a powerful combination. I class this mode as |
| Thailand have an IT background there is | | | | a special form of Internet-business. |
| competition for such jobs too, keeping salaries | | | | One of the big advantages of being located in |
| low. The problem is you are competing with Thais | | | | Bangkok is that it is an Asian hub, so you can tap |
| for many jobs (not to mention Westerners | | | | into business opportunities in Kuala Lumpur, |
| desperate to stay in Thailand at any price) and | | | | Singapore, Jakarta, Manila and even parts of China |
| Thais will accept a far lower salary than | | | | quite easily. |
| Westerners. Also, while Thailand's education | | | | The down-side to freelance consulting to |
| system may not be on the same level as the | | | | businesses based locally in Bangkok, as opposed |
| West, there are plenty of keen, capable workers | | | | to remote businesses, is that you will need to |
| looking for work and that also keeps competition | | | | obtain a Non-immigrant Cat 'B' visa and work |
| high and salaries low. | | | | permit. This is much easier if you have your own |
| So, on the whole, the opportunities for direct | | | | business or can find a "host" company in Thailand |
| employment that gets us up to our 70K target | | | | to sponsor you. You can then work under the |
| are few and far between. Networking is very | | | | auspices of that company. This is where |
| important, so the more people you know, the | | | | networking with business owners can prove |
| better your chances are. Luck may play a part | | | | invaluable. |
| too as you might just have a skill-set that is | | | | The other possible negative is getting to the |
| particularly sought after by a contact. | | | | customer's premises. Battling through Bangkok's |
| The days of the Expat on a mega-package are | | | | rush-hour traffic is not the most stress-free way |
| long gone, but there are a few still around. | | | | to spend your time in Thailand! |
| Running a business in Thailand | | | | A slightly better way of working is to obtain |
| One possible reason for moving to Thailand | | | | foreign clients and work remotely. In certain |
| full-time is to start a business, which may have | | | | businesses, such as technical writing, computer |
| seemed like only a pipe dream in the West due to | | | | programming, web design and systems |
| excessive capital requirements and red-tape. In | | | | administration, this can be incredibly effective. |
| fact, you'll find the capital requirements and | | | | I have a friend who writes software for machine |
| red-tape can also be daunting in Thailand. Setting | | | | controllers, periodically he disappears off to |
| up a (legal) business in Thailand is not for the | | | | Bangkok for a few months to write some |
| faint-hearted. | | | | software for a client and combines business with |
| With planned changes to the Foreign Business Act | | | | pleasure! It works very well, and he is being paid |
| (FBA) and a general (pun not intended) hardening | | | | by Western clients. |
| of attitudes to businesses that are controlled by | | | | You don't need many contracts at Western rates |
| foreigners, it would take a brave man indeed to | | | | to have an awesome lifestyle in Bangkok! |
| set up a business in Thailand these days. | | | | Investing and other possibilities |
| In principle, setting up a company in Thailand is | | | | Some people who sell up and move to Thailand |
| very similar to setting up a company in the West. | | | | have a sizeable lump sum, perhaps from the sale |
| Many of the laws are similar and accounting | | | | of a house or an inheritance. Sometimes their plan |
| practices are also similar to USA. However, as | | | | is to live off the interest without reducing the |
| soon as foreigners get involved things become | | | | capital sum. |
| complicated by additional legislature in the shape | | | | There are several factors that determine |
| of the Foreign Business Act (FBA). The FBA | | | | whether this approach is viable or not. These are: |
| specifies a number of restrictions on what | | | | |
| foreigners and their businesses can do in Thailand. | | | | 1. Initial capital |
| It also specifies minimum capital requirements, | | | | 2. Rate of return (investment) or interest rates |
| which can be excessive; for example, for | | | | (savings) |
| businesses listed in the FBA the minimum capital | | | | 3. Monthly expenditure |
| requirement is 3 million Baht and 2 million if it's not | | | | 4. Exchange rate |
| listed. There are basically three lists in the FBA: | | | | 5. Inflation |
| List 1 is totally prohibited to foreigners and lists 2 | | | | If for example your initial sum is £100,000 |
| and 3 require permission at different levels of | | | | (which is about the minimum useful in this case) |
| authority (and have a mountain of other | | | | and you are getting 10% returns net, you would |
| conditions and exemptions). | | | | have £10,000 per year to live on; a |
| Generally, it is illegal for foreigners to own more | | | | reasonable amount (around 54,000 BPM). But, it |
| than 49% of a business -- any business. The FBA | | | | isn't quite that easy to get 10% net returns! |
| does contain a complicated list of variations, | | | | There are also further risks that must be taken |
| exemptions and conditions. It's possible for | | | | into account such as currency variations and |
| foreigners to still control a company, even though | | | | inflation. If you invested in company shares there |
| they have a minority stake in a business, by | | | | are stock market risks and in a year where the |
| making their shares carry more votes than the | | | | market falls by 10% (a so called 'bear' market) |
| shares the Thais have. | | | | you are going to be eating into your capital. |
| This loophole, or shall we say "legal feature", is | | | | Some carry out "day trading". This involves |
| also used to allow foreigners to buy and own land | | | | actively trading in shares on a daily basis, the |
| (which is supposed to be prohibited). Thai | | | | profit being generated from volatility in certain |
| companies are legal entities that can own land in | | | | shares that the trader picks. This requires |
| their own right; so if the Westerner controls the | | | | constantly monitoring share prices looking for |
| company, he can control the land. The landed | | | | quick gains. This can be effective if you know |
| property would actually be owned by a Thai | | | | what you are doing, but the stock market is a |
| company which the Westerner had a minority | | | | notoriously tricky thing to predict. Further, |
| shareholding in, but majority voting rights. | | | | constant trading commissions on lots of small |
| In the past the authorities turned a blind eye to | | | | trades can eat into your profit. |
| such practices as it wasn't actually breaking the | | | | Property |
| word of the law. Post-coup things are different | | | | Whichever method you chose will take very |
| and there is a definite mood in the air of getting | | | | careful management in order to achieve the sort |
| things cleaned up in this regard. This is one area | | | | of returns that will give you a good lifestyle in |
| where the FBA is likely to undergo some changes. | | | | Thailand. |
| At time of writing then, it's still not apparent how | | | | Another popular approach, at least in the UK, is |
| things will pan out for those wanting to set up a | | | | not to sell up but to rent your property out. |
| business in Thailand, especially if they are using | | | | There is significant (and growing) demand for |
| that business as a means to own land or | | | | housing in the UK right now due to very high |
| property. It could be a case of "business as usual", | | | | levels of immigration. Rents are quite high, a |
| but others are talking of a situation where | | | | two-bed property in a relatively cheap area |
| foreigners are compelled to "sell down" their | | | | costing around £650 a month in rent and |
| controlling shares to Thais. Such a practice is likely | | | | one-bed flats are not that much cheaper, in some |
| to have a very detrimental affect on the Thai | | | | areas you'll be lucky to get a one bed flat for less |
| economy. | | | | than £750 a month. In London the rents |
| If you do want to set up a business in Thailand | | | | are generally much higher. However, property |
| the first hurdle will be getting the right visa and | | | | markets, like any other market, can fluctuate. |
| paperwork in place. You need to enter Thailand on | | | | While property is a great long-term capital |
| a Non-immigrant category "B" visa. If you are | | | | investment, it's perhaps not the most pragmatic |
| going to investigate setting up a business, you are | | | | thing if you are hoping to live off the rentalincome |
| still supposed to go with a cat B, although you can | | | | while in Thailand, as you would need to have paid |
| enter on a Visa Exemption, evaluate the | | | | off a good chunk of your mortgage. Out of the |
| opportunities and come back to Thailand on some | | | | rent you also need to pay a management fee, as |
| future date with a cat B. So getting a cat B visa | | | | you'll be sunning yourself in Thailand while they |
| is the first step. The paperwork and regulations | | | | take care of your property. That could be around |
| for setting up a business in Thailand are best | | | | 10% to 15% of rental income. |
| handled by a local Thai expert or a company | | | | However, if you are considering moving to |
| specialising in such activities. This is sensible as you | | | | Thailand you may already have paid off (or be |
| will need to be concentrating on actually running | | | | close to paying off) your mortgage, then the |
| your business rather than spending time on Thai | | | | rental income could be a very nice supplement to |
| paperwork. | | | | other income such as a pension or online business. |
| This is definitely something that should be | | | | Summary |
| delegated. You do still need to keep tabs on | | | | This article has looked at the sort of income you |
| entities that you've delegated to, just to make | | | | should be aiming to achieve in Thailand. It also |
| sure everything is in order (don't take anything | | | | reviewed some possible sources of income. |
| for granted in Thailand). | | | | Generally you should be looking at earning 70K+ |
| There are actually a few options open to you if | | | | BPM to have a really nice lifestyle in Bangkok. |
| you are interested in running a locally-based | | | | Businesses that are offshore have numerous |
| business in Thailand: one is to start a business | | | | advantages over businesses locally-based in |
| from scratch, another is to purchase an existing | | | | Thailand. In these days of tele-working via the |
| business. A third is to purchase a franchise, of | | | | Internet your skills could earn you a lucrative |
| which there are many available in Thailand. Again | | | | income. My recommended way of funding a |
| there are business brokers who can provide you | | | | lengthy stay in Thailand is through an online |
| with a list of businesses and franchises available | | | | business. |
| for purchase. | | | | Above all, the work you carry out should always |
| Which route you choose will depend on your | | | | be congruent with your reasons for moving to |
| experience and interests and each avenue has its | | | | Thailand. |
| own advantages and disadvantages. One problem | | | | |