Don't open a business in Thailand (part 1)
I have lived in Thailand for almost 15 years. I am one of the few business owners that escaped without losing everything I put into it. I was partially lucky and partially smart. The system is rigged and you are not allowed to succeed - at least not as a small business owner.
Before I start to sound too jaded, i want you to understand that I actually came out on top. I didn't lose all my money so this is not just the rant of someone that got burned by a system they didn't understand. However, I am going to present multiple REAL stories of people I personally know in an attempt to prove my point. I will include my own story at some point in this series.
I have changed all the names but I can assure you all of these stories are true.
We'll start with a Swedish guy named Pelle.
Pelle owned a bar in Sweden that was very successful and found himself with a bunch of time off each year because the island where his bar was located was a "summer only" island in Sweden that during the off season wasn't even open because there are no people there and there is no reason to be open. Therefore he traveled the world from November to March, every year.
As luck (or lack thereof) the "high season" of tourism in Thailand is the opposite of the high season in his home country of Sweden. He found a place that he really liked in Thailand and decided to open at resort there.
He was very careful, deciding to have a lawyer and make certain the terms of his lease were in his benefit. He didn't skimp on this, he did everything correctly and secured the maximum lease that is available which was 3 back to back 3 year leases. He invested a great deal of money building a pool, making bungalows, and creating a bar and restaurant that was close enough to the beach to be attractive but far enough away from the main road to still be quiet. It was truly a wonderful spot and at $30 a night, it was quite a bargain.
actual photo of the actual place in question
the poolside bungalows were simple but cheap, they got the job done
A few years went by and the resort was doing very well.... A little bit too well as a matter of fact.
Jealousy by neighbors started to happen and Pelle suddenly found himself being questioned by the tax office about his receipts for guests. Because he does everything "by the book as it exists in Thailand" he provided said receipts. The tax officials would come back, this time with police officers and state that they "reviewed his receipts and he owes xxx,xxxx baht in back taxes ( I don't know the exact figures and I am not going to guess.)
Pelle refused to pay and then went to court against the tax office. After 1.5 years in court, Pelle won. However, during that time he incurred nearly 2 million baht ($60,000) in legal fees, which was supposed to be repaid to him if he was victorious in court. This was 8 years ago and he still has not received this money.
A few years went by and the place continued to do well, but then things started happening like taxi drivers all of a sudden "forgetting" where his resort is. The water was routinely cut off to his facility despite the fact that he was always paying the bills on time. He built a water back up system with his own money (of course) only to discover on several occasions that the PVC leading to the tanks had been cut with a saw, or the pump had been sabotaged.
He next hired a night security guard who was an ex champion boxer...... The problems stopped for a little while
it really was something else
The problems continued year after year and after a while his online rating started to suffer because it was such a battle to keep things running and he wasn't really making much money anyway. However, he was still profitable and the place looked great, the staff were happy, and he was still enjoying about 80% occupancy during the tourist season (this is very very good.)
After 9 years it came time for his lease to be renewed and the owner of the land told him that he would let him have 1 more year at the current rental rate but after that the price was going to be THREE TIMES the amount he had been paying.
At this point Pelle just decided to give up and walk away because he was barely making any money anyway and the resort had deteriorated to the point where it was just a place for him and his pals to hang out. Pelle, myself, his motorcycle club, and loads of friends that he had made over the years came together with all of our vehicles to help him move everything we possibly could out of the place.... including most of the vegetation that he donated to places including local schools.
I am actually happy to say that this particular plot of land still lies vacant. There is no replacement business that moved in to the spot that he had built into a once thriving resort. I can't say for sure, but I think it was jealousy of the neighboring hotels that created unnecessary 6-year long spiral of decay that eventually lead to the demise of a business that was doing well and employed a dozen Thai people who were quite happy with their jobs.
Recently (nearly 4 years later) there has been some construction going on at the property, but they seem to be going very slow, which normally indicates they keep running out of money.
I am also proud to say that every time I go to this part of town I park my bike in the parking lot of what was once the Ao Nang Tropical Resort, and i do so with a full bladder to show my appreciation for the new, far-from-finished buildings.
As always, i welcome your comments, suggestions, and eagle eyes for my bad spelling.
After reading this will be waiting for your part 2
This is a really sad business experience your pal went through. Small-scale business are also vital backbones of the nation's economy, so I wonder why people and the government are not very supportive. As sad as this personal anecdote of your friend is, I kinda found this part- He next hired a night security guard who was an ex-champion boxer -very funny. So the night guard really Knocked out the sabotagers or what? haha. My message basically is that we need to be supportive and be our brother's keeper. Very interesting article.
Same thing can be said for Croatia.
Taxes are way too high, and you can't offer a proper paycheck to your staff.
I see that you wrote that he was lucky he didn't lose much, but I see that they still didn't pay him $60,000 in fees.
That is still really big money.
Especially for the standards of my country.
did i say he didn't lose much? I have to read it again. he lost it all.
Sorry, my mistake.
You wrote that in the second paragraph for yourself and I connected that to Pelle.
I'm really sorry for that guy.
He did everything 'by the book', everything was going great and he still lost it all.
If people would invest as much time and energy into helping from their neighbors, this world we live in would thrive and we may just learn something also. I believe if you put good out there..you'll receive good in return. Maybe not on the time line you think, but it will come. Evil, bad and corruption, such a pain in my A$$.
That is so sad. I loved my trip to Thailand. Such nice people and interesting sites. Corrupt officials ruin everything for everyone everywhere...
I really thought about staying and trying to live their fulltime because of the cost of living and great food. Now I am glad I didn't since I would have needed a job/business for income. Maybe in the future when I have enough space bucks I could reconsider, but then again I would probably get screwed on owning property or renting. Oh well perhaps the next place I visit will be even better and more expat friendly... plenty of life left to live.
renting is fine, owning is almost impossible as a foreigner. Visas are also becoming increasingly problematic. Thailand will only learn its lesson after everyone has already left, unfortunately.
Eagle eyes
island in Sweden that during the off season wasn't even open because there are no people there and there is no reason to be open. Therefore he traveled the world from November to March, every
It should be:
island in Sweden during the off season wasn't even open because there are no people there and there is no reason to be open. Therefore he traveled the world from November to March, every
Such practice should not be encouraged, it will have negative effects on their economy.
Remember the dozen of Thailand working for this people, what would be their lots too?
Waiting for more...
Thanks as always my eagle pal. However, in this situation I think the current form is correct. I'm gonna leave it as it is :)
Hahahahah, probably I should go with you, it's just that reading it out to myself still sound a little bit odd. Smile
Aww that's really very sad to heard about that, because I love this country so much, but I'm little bit happy because I'm a tourist and not a businessman Lol, well thanks for this useful information,Thanks alot
I love this country too - don't get me wrong. There are just certain aspects of it that a tourist is unlikely to ever experience. It has a dark side.
This is sad, i was expecting the local government of the community to aid small businesses to grow. The kind of things he went through were out of jealous and/or hatred.. or it could be more of a race thing. I wish him better luck else where
Hello @gooddream it's good to know more about you. It was really a good place you showed and it was really nice and was completely worth $30.
Well it is the government who is trying to exploit, they don't even care about the workers or the staff.
Taxes hike has been a problem since a long time and is destroying lives of many.
Well I think you made a smart and nice decision. Good work. Keep it up sir.
wow ...
And I was wandering why do they have so many electric ugly cables on the streets and dirt and smell coming from every dark corner you can see.
I guess it the part of the way the business is done
Yeah, that's kind of just the way electricity is done here. There are few exceptions and those are pre-planned communities where they put everything underground..... until about 10 years go by and no one remembers where the cables are and they put them all above ground as a replacement.
When are you posting the part 2?
likely tomorrow