Starting or Buying a Business in Pattaya: You'd Better Be Serious

When someone tells me they want to start or buy a business in Pattaya, my first answer is always the same: you'd better be serious about it. Owning a business in any country takes real commitment. The people I see fail here usually do it half-heartedly, as something to do, without taking it seriously. And it fails.

Should you start a business from scratch or buy one?

It depends on where you are as an entrepreneur. Early on, I thought starting from scratch was easier and better, and it can be cheaper up front. But over the years I've learned that building a customer base takes far longer than people expect.

If you can buy a business that already has customers, you save yourself that time, even if it costs more. At my stage now, I'd always rather buy an existing business. But someone just starting out may see it differently. You can read how I got here in my Pattaya timeline, from bar manager to seven businesses.

What should you check before buying a business?

The normal things first: check the finances, and ask why the seller really wants out. Then look for the hidden problems.

The team. You can buy a really well-run business only to find the staff leave the moment you take over. Make sure the people in place are happy and plan to stay. I've written more about finding and keeping good foreign staff.

Licences and paperwork. Make sure everything is above board and every licence is in place. Some businesses here run for years without the right paperwork, so don't assume a business is in order just because it's three or four years old.

Do you need a Thai partner to own a business in Thailand?

For most businesses, yes. A foreigner usually can't hold the majority, so a Thai partner holds 51%.

In the past, many people used what was effectively a nominee: a Thai name on the paperwork who never put in money or played any real part. That has changed. These days you need a genuine Thai partner who invests in the business.

Your partner doesn't have to be wealthy. If you have someone you trust who is capable of being your partner but doesn't have the money, it can be done properly. The key is that it's real, not a piece of paper. If you lend them the money, it should be a genuine loan that they actually repay, partly through their own work in the business, and they should share in the profits and the decisions as a real partner.

The authorities look closely at arrangements where the foreign partner has funded the Thai shareholder, and nominee shareholding is illegal. So have a Thai lawyer set up the company, the shareholding and any loan properly from the start.

If you're going in with someone, read what I've learned about business partners.

Do you need a work permit to work in your own business?

If you're actively working in the business, yes, absolutely. If you're a silent investor and not working in it, you don't necessarily need one. I've written more about visas in Pattaya.

The process isn't straightforward, so my advice is to use a Thai agent. The work permit fee itself isn't much, but it's worth spending an extra ฿20,000 or so to have someone handle it. You're dealing with government departments, and some procedures aren't written down anywhere. You only learn them through experience.

Once you've paid an agent, they'll tell you exactly what you need, usually your passport, photographs, and sometimes evidence such as a degree to show you can do the job you're employed for.

Which businesses work in Pattaya, and which fail?

The ones that work are anything in entertainment, restaurants, and guest houses. My own preference is service businesses. They need less capital up front, and there's a real need here for higher-quality service.

The ones I see fail most are bars, often because the owner is their own best customer. People buy a bar because they like the idea of it. They don't take it seriously, they don't understand how things work here or how Thais operate, and they aren't willing to learn. Bars are everywhere and relatively cheap to buy and run, which is exactly why they have the highest turnover. (Here's what I've learned running restaurant and bars.)

My advice

If a friend came to me tomorrow wanting to start or buy a business in Pattaya, I'd tell them this:

• Take it seriously.
• Do your due diligence.
• Decide with your head, not your heart.
• Talk to other business owners. People who have been here and done it will tell you things you won't find in a book or on YouTube.

For more on buying, read my series: why buy rather than start, how to value a business, leases, landlords and paperwork and taking over: the first few months.

If you're thinking of starting or buying a business here and want to swap notes, get in touch.