Saturday, 9th February 2013
THAILAND CRACKING DOWN ON FOREIGN OWNED BUSINESSES – Recently, in Phuket, Thailand, the Tuk Tuk and Taxi took a dim view of a Russian owned business transporting passengers.
The problem with the Tuk Tuk and Taxi is a long and drawn out affair with government officials being unable, or more truthfully unwilling due to corrupt payments, to tackle the Mafia based Cartel.
It came to a head just two weeks ago whereby the Tuk Tuk and Taxi drivers stage a protest outside one of the main Police station, blockading the road, until the police took action against the Russian business.
The business in question, Alex Tours, has now closed down, which has resulted in their Russian tourist customers being moved to another holiday destination, such as Bali.
The reasoning, from the Russians is that the Thais are not only unable to communicate with Russian tourists but they are also ripping them off, with extortionately high fares. It is widely known, and accepted by the Thai authorities, that Tuk Tuk and Taxi fares are some ten times higher than that of the capital Bangkok.
The Thais have no concept of fair market competition and there are a whole plethora of restricted businesses that foreigners may engage in, mostly around the tourist industry. The simple fact is that the Thais do not want to compete against foreigners as they are fully aware, as with the case of Alex Tours, that the services foreigners provide are often far superior and much cheaper and therefore would infringe upon their right, as they see it, to rip off the tourists.
I have spoken to a few Thais regarding this matter and they tell me that the underlying problem is fear. The Thais fear the Russians due to the perception that Russians are highly corrupt and often involved in Mafia related crime syndicates which are more powerful that the Thai run mafia syndicates. Of course, to any sensible thinking person this is simply not true. Yes, Russia, like any other country has its Mafia groups but to think every Russian is tied into organised crime is simply ridiculous.
Due to all the press that this situation has been given, central government has now issued a notice that it will now undertake the investigation of hundreds of foreign owned business in tourist areas, such as Phuket.
In my view this is little more than a witch hunt from a nation so nationalistic that they refuse to open their eyes to the possibility that they could actually learn from the foreign run businesses and from this improve their own operations.
In 2015 Thailand was supposed to join the AEC (Asian Economic Community) but the government has already pushed this timetable back by one year to 2016. Some believe that Thailand may never join AEC due to the fact that its population, through the lack of education, will simply not be able to understand why foreigners, from the other AEC member states, will be able to walk in and take up jobs freely.
It is perceived that the tourist market in Thailand could be flooded with staff from the Philippines due to their ability to speak English, where the Thais can barely communication even on the basic level. The result would be that thousands of Thais could be put out of work by this open market competition which in return could well result in riots and civil unrest.
The first thing you need to be aware of is that no foreigner may own more than 49% of a Thai company. Therefore the lawyers set up a Thai company with Thai Nominees – that is a number of Thais that collectively own 51% of your business and its assets, but whom never benefit and have no voting rights. While this may be normal practice it is legally against the law and this current movement by the Thai authorities is to root out these companies, confiscate their assets (for their own financial gain) and deport the foreigner.
Is this just a form of legalized theft? Yes you could look at it this way but remember that the information and therefore the perils of owning a business in Thailand is well documented and so if you are foolish enough to engage in such a thing then it’s likely that you will eventually lose what you own.
The rules and regulations state that as a foreigner you may only own 49% of a Thai company. Therefore, to stay within the legal framework you must have a number of Thai partners that control 51% of the business and in fact benefit from the company’s activities financially.
Right now, as I write this, there are thousands of foreign owned business on Phuket alone and the chances are that 95% or more are running their businesses using the Thai Nominee system and therefore each and everyone one of them face the very real prospect of losing everything they have and being deported.
Over the years I have seen so many foreigner come here on holiday and then get lulled into the illusion that Thailand is a friendly place and therefore wish to live and work here. Unfortunately Thailand is not what it appears to be on the surface. Just scratch a little below the surface and you will find a population of people that are extremely racist, ignorant, corrupt and murderous. Thailand has the 3rd highest gun related crime figures in the world, outstripping the U.S 6 to 1 and just below Bogota, Columbia. Surprised? Scratch below the surface of any Thai and you will quickly realise that only one thing matters – money. Come between a Thai and is money and it is likely to cost you your life.
While Thailand likes to portray the image of the ‘Land of Smiles’ those who live and work here will openly tell you that it’s known as the ‘Land of Scams’ and the tourists are their main target. There have been countless tourist murders, generally through muggings and physical violence towards tourists is a growing trend.
With the onslaught of the government’s crackdown on foreign owned businesses, if in fact they do carry out their threats of intense investigation, could well produce the closing down of over 95% of foreign owned business and the deportation of thousands of foreign nationals.
The ramifications to this practice will be an unfair market place with little or no competition. This in turn will only ramp up the Thais greed which will produce higher prices for tourists. Already we are seeing the tourism market in Thailand beginning to die, mainly due to all the unresolved issues, such as rip offs, murders, extortion, intimidation, muggings and other forms of violence. Tourists want a destination where they can relax and the truth is Thailand is not a place where you can relax or let your guard down for a second – it could cost you your life.
It is no good trying to explain to a Thai that this ongoing persecution of foreigners is bad for business and the economy – the Thais believe only they should control everything and reap the benefits. The stark truth of course is that with foreign businesses being forced out, as in the case of Alex Tours, the market is left open to severe abuse in pricing and therefore the Thais will quickly price themselves out of the tourist market.
In my final statement here I would like to warn anyone thinking about coming to Thailand for a holiday, to live or to work – do NOT do it.
Remember these simple facts and you will not lose your money or your life:
You cannot legally own a business in Thailand, so don’t waste your money setting one up, the Thais can literally walk in, close you down, steal your assets and deport you.
You cannot legally own land, so don’t waste your money buying a home. Once again the Thais can confiscate your property and deport you.
If you want a nice relaxing holiday without being ripped off, mugged, raped or worse murdered, then look for another destination because Thailand is one of the most violent countries on the planet.
Follow these rules and you and your money will be perfectly safe. Break these rules and your money will disappear, along with your body if you are not careful.
If you think what I have written here is all rubbish, then simply do a search on the internet for tourist crimes in Thailand, the amount of results you will get back is simply staggering.