Sunbelt Asia Weekly Column
13 July 201
The Thai government announced several major changes in how it views work and deal with work permits for foreigners in its second Emergency Decree on Foreign Employment Management BE2561 (ED2) issued on March 28, 2018. Sunbelt Asia founder and owner Greg Lange points out that there are some very important changes in the new decree that will make it easier for foreigners coming to Thailand to work for a short period of time, as well as reduce fines and penalties for some violations.
The new ED2 has redefined work to “performing any profession, whether or not there is an employer, excluding business operations of a foreign business license’s holder under the Foreign Business Act” which is more focused and relevant compared to the previous definition of “exerting one’s physical energy or employing one’s knowledge to perform a profession or perform work, whether or not for wages or other benefits”. The new decree also allows for application for a work permit to be submitted electronically from within Thailand or outside the country.
The ED2 has removed the requirements for a work permit for those entering the country occasionally to “organize or attend meetings, conferences, seminars, art exhibitions, or other activities to be prescribed by the Cabinet” as well as those entering the country for 15 days for urgent and necessary work. Those entering for that purpose do need to inform the Department of Employment upon arrival and may extend it a further 15 days if necessary.
Additionally, representative management of a company holding a foreign business license under the foreign business license law of Thailand no longer need work permits. The new SMART visa requirements were added to the Emergency Decree, notably that investors and foreign experts who have applied for the SMART visa do not need work permits.
A new requirement for employers and employees is that both must notify the department of the new employer/employee, place of work, and nature of work within 15 days of the employment date and notify the department every time the employer is changed. The fine for employer and employee failing to notify the department is up 20,000 baht. Those companies who have already employed foreigners with a valid work permit before the implementation date of March 28 should have notified the department within 60 days.
A foreigner who enters to work on an urgent and necessary basis without notifying the department faces a fine up to 50,000 baht while the penalty for working without a work permit or working outside the scope of the work permit has been reduced to between 5,000 to 50,000 baht; after the fine is paid the foreigner will be repatriated. Previously, the foreigner faced fines up to 100,000 baht and 5 years in prison. The penalty for the employer however, is from 10,000 baht to 100,000 baht per foreigner and should the employer repeat the offense can be fined from 50,000 to 200,000 baht, as well as face 1 year in prison, and be prohibited from employing foreigners for a period of 3 years from the date of the final court judgement.
The government has issued a grace period until August 31, 2018 on penalties for those working without a work permit or outside the scope of their work permit, for employers who have employed a foreigner without a work permit or working outside the scope of their permit, and for those who have entered the country for urgent and necessary work but not yet informed the Department of Employment.
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Silom area hostel with good reviews
Located in cool neighborhood area about 10 minutes walk from the BTS, this Silom area hostel has 14 rooms including private rooms with en suite bathroom, rooms with shared bathrooms and a dorm style room that holds 4. The convenient location and classic atmosphere has earned the business good reviews on booking sites and Trip Advisor. The business was established in 2015 and has contracts with key accommodation booking sites including Agoda, Booking.com, and Hostel World.
The hostel has seen 1.8 million in sales with an average of 840,000 baht in revenues. The monthly rent is only 49,500 baht a month for the five floors, there is one full time employee with a salary of 15,000 baht a month. The owner invested 3.5 million in setting up the hostel. He is looking to move to a new business and so is seeking a sale.
ASKING PRICE: 2.3 million baht
Popular Korean dessert franchise in top Siam Square location
This well-known Korean dessert franchise is in an outstanding Siam Square location and while the business has only been open six months the owner is selling as he doesn’t have the time to manage this and his main business. The owner spent over 8 million baht in setting up the business including all decor and fixtures and fittings but is selling for the lease, franchise, and all fixtures and fittings for ony 4 million baht. The owner is also willing to sell just the lease and the assets.
The 60 sqm location seats 42 with a monthly rental of 210,000 baht on a 3 year lease. There are four full time and two part time employees with a total payroll of 60,000 baht a month. The asking price includes the lease deposit so the new owner can walk into a turnkey business.
ASKING PRICE: 4 million baht – includes franchise and lease deposit
Online organic food store with Sukhumvit showroom
This health store offers both online shopping for wholesome and organic products but also a showroom in a great Sukhumvit location. Taking advantage of the growing trend for healthy food, this online business also gives an opening into the booming e-commerce section in Thailand. The business has been in operation since 2013 and has seen business grow with sales reaching 8.8. million baht.
The showroom has parking for 3 cars and is in a top Sukhumvit location with a rent of 30,000 baht a month. There are 7 full time employees with a payroll of 100,000 baht a month. The business is working on launching a new interactive site and mobile site.
The owner is looking to exit and start something else.
ASKING PRICE: 2.5 million baht
BOI tech business allows for 100% foreign ownership
The BOI promoted business allows for 100 percent foreign ownership and falls within the guidelines and goals of the government’s bid to progress the economy to higher tech. This business provides cloud services to companies in Thailand and currently has 3 active partnerships and active reseller agreements: Microsoft, Sophos and Acronis, offering managed cloud services and cloud powered IT solutions. The company offers 24/7 management of cloud services and offers services such as Windows and Linux Cloud servers, Cloud back up, website and app hosting and Microsoft Azure. As the company enjoys BOI incentives, profit and dividends are not taxed so it can be beneficial to a local investor to change to local ownership.
In Thailand the spending on public cloud services in 2017 was estimated at 7.73 billion baht according to global research firm IDC. Many companies are moving to the cloud and the Bank of Thailand recently announced that the financial sector can offer financial services on the cloud. Research firm IDC predicts a further growth of the Cloud Services market by 25% yearly on average.
The company has a dedicated team of well-trained IT professionals with certified and senior engineers offering technical support and the company also has an online lead capturing and sales strategy for selling recurring packages. The company conservatively predicts total net profit over 3 years to reach 100 million baht.
The owner has more than 10 years of experience in IT, Cloud, Hosting and Online Marketing. An extensive knowledge and experience that can be transferred to a partner or new owner.
The owner is interested in two options; a joint venture in which the partner takes shares in the Thai company and the owner stays on as the General Manager or a full takeover with 100 percent ownership by the buyer.
ASKING PRICE: 50 million baht
Website design company with international portfolio
This leading website design company has been in business for over 4 years and has an extensive portfolio including many international clients with a great network of clients and referrals. The company has great SEO on their website and rank on the first page for professional website designers.
The business has very low overheads and can be run out of the home working with a freelance network. The company has earned a great reputation for quality websites and saw sales of nearly 3 million baht in the last year. The current owner is moving on to another project and has listed this business for sale.
ASKING PRICE: 1.4 million baht
Unique concept retail store with branches in Thailand and Cambodia
With a unique and fun concept, this retail store has expanded rapidly and now has 39 branches around Thailand and in Cambodia. The stores are a destination and always have something new and fun to explore. Offering low priced fashion products and unique gifts that resonate with tourists and residents, the owners of this store have found that their success has outstripped their ability to manage the business. The company sources their products direct from the factory both locally and around the region. With an ever changing trendy offering of fun products, the company has created a popular and well-known brand image.
The business has 39 locations of which one is the headquarters and warehouse in Min Buri, and a company owned store in a popular tourist district as well as one licensed store. Total rent and services on these locations is around 5 million baht a month. There is 188 staff with a total monthly payroll of 3.17 million baht. Annual sales reach 344 million baht giving a profit of 38 million baht. Inventory valued at 100 million baht is included in the sale.
The company is debt-free would offer the new owner a good income but this is ideal for someone seeking to grow the business through franchising and owner-operated stores as the retail concept has proven to be quite popular.
ASKING PRICE: 180 Million baht
High end furniture factory & interior design business in Pattaya includes factory, showroom & land
Located in Pattaya, this high end furniture factory offers not just top quality fine furniture but also full service interior design for residential and commercial projects. The company has earned a reputation for attention to detail, unique and interesting design solutions and high quality products. Offering a wide variety furniture, including stand alone and built-ins, the company has a full – service interior design solution for its customers.
The business has a 600 sqm showroom in a busy Pattaya area and a 2500 sqm factory on the outskirts. The company owns the land and showroom in town. There are 45 employees and the monthly payroll of 1 million baht includes the owner’s salary. The business is open 6 days a week.
Sales last year reached 50.8 million baht and net profit over 2.6 million baht. The owners have spent a great deal reinvesting in the business including property to continue its growth.
The sale price includes the company with showroom, factory and land
ASKING PRICE: 62 million baht
Long-running Pattaya pub in busy area
Located in a popular area of Pattaya, this long-running Irish pub has earned good reviews for its fun atmosphere, friendly service and good food. In addition to the pub, which offers 70 seats and big screen TVs for sports, there is a six room guesthouse in a two shop-house space. Rent on the space is 71,000 baht a month with rent fixed until 2026. A real deal in this area.
The business has 10 employees with a total monthly payroll of 80,000 baht and has seen sales reach 6 million baht with a profit of around 1.5 to 2 million baht. The owner is including the Thai company in the sale price. The owner is relocating overseas and so is selling the business.
ASKING PRICE: 5 million baht