This is how Sanet helps international SME’s
Entrepreneurs are people who want to get things done.
That’s the reason why entrepreneurs love to invest in new products on new markets. At the end of the day, it’s all about sales and earnings, to ensure that owners and their employees enjoy a prosperous future for themselves and their families.
What entrepreneurs don’t like much, on the other hand, is bureaucracy, legal paperwork, and the need to disclose their plans and concepts to various authorities and institutions. And yet they cannot do completely without this. Particularly when it comes to investing in new productions or sales markets, all kinds of obstacles and requirements exist and demand time and resources which a medium-sized company simply cannot permanently maintain if it does not want to sacrifice the company’s profits on the altar of bureaucracy. This is when a temporary support is required, such as it is provided by the Sanet Group in Thailand and in wide parts of Southeast Asia. This being said, what are the services that Sanet provides to SMEs and what is Sanet’s approach to them? Even large multinationals know that there is simply no “blueprint” for conquering new markets or for a Foreign Direct Investment. Each new market, and each new country, is different. Whether it’s about legal regulations, business culture, market mechanisms or location risks – at times something may be comparable, but never everything is all the same. Medium-sized companies in particular need to supplement their own knowledge by local knowledge carriers to ensure the success of their projects.
1. Everything depends on the individual business case
It is only by giving a precise outline of the project – from an entirely entrepreneurial point of view – that a consultancy service can be targeted accurately. So what are the motivations and the goals of the project? What expectations does the investor have for his or her new plant or market venture? What does the site have to offer, what strengths and experience (“Best Practice”) does the company already bring to the table? These and similar questions need to be discussed and determined in at least a full-day workshop. The Sanet ASREAN ADVISORS draft an agenda and summarize the result in a ” List of Specifications” for the consultant and the investor.
2. The formal procedure
Now it is time to check the legal requirements or restrictions for selling one’s own products, or what terms and conditions the state imposes on a production facility. This is where Sanet Legal Ltd., the German-speaking law firm of the Sanet Group, comes into the picture. Is it necessary to establish a company? Is it possible to achieve 100% ownership of the company and how many shareholders with which amount of capital does the law require? Must a locally residing director be appointed, or may a foreigner manage the business? What rules should be included in the Articles of Association? What is allowed to sell in addition to self-produced products? Which tax registrations are required? All this differs from country to country (and from business case to business case!). At Sanet, we organize things the way we decided in the workshop.
3. Risk Management
Whether it’s about distribution or a new production facility. It is always essential to check the project for all its specific risks and opportunities. Admittedly, there are “macro-economic figures” from all sorts of government agencies telling us about gross social products, economic growth, market sizes or government programs. Yet no one tells the SME exactly what this means for his particular business case. The SANET ASEAN ADVISOIRS explore into the very market the demand, the price situation, the development, the distribution channels, the competition and the market mechanisms for exactly your products. If you want to set up a production plant, Sanet explores the labor market, the sources of local supply, logistic requirements, and the average construction costs, at least in a first, practice-oriented overview.
4. Secure Government Incentives
Specifically in Thailand, the Thai Board of Investment (BOI) is a government agency that may grant tax and customs exemptions as well as numerous other benefits. However, the proceedings are often a ” Book with Seven Seals” for the applicants, which requires many years of experience to be translated for the investor. Many activities, such as Trading and Services, are permitted only through a promotion procedure in the first place. Literally hundreds of categories with correspondingly varying conditions and benefit need to be considered. Sanet understands these application procedures. Knowing each other and showing mutual respect towards the often heavily loaded administrative employees is helpful in order to carry out the procedures efficiently and as smoothly as possible. Sanet ASEAN ADVISORS have managed BOI applications procedures for dozens of businesses from around the world. They assist the investor with structuring the business plans in accordance with the relevant governmental authorities and with a professional compilation of all documents. Of course, Sanet keeps close contact with the decision makers.
5. Select and Evaluate the Best Site
Site scouting and evaluation is one of the most important parts of investing in a production facility. All developers of land sell themselves and their park as the number 1 in the country. The investor, however, does not only have to compare the cost. A comparison of the infrastructure, the reliability of the energy supply, of wastewater disposal, the environmental impact even coming from the neighborhood, the soil conditions (pilings of up to 20 m deep are a threat in some regions), the impact of flooding and heavy rainfall in flood and rainy seasons, and many other criteria can lead to persistent concern or to persistent safeness of the investment. In addition, the plot of land itself carries risks typical for the region, which the seller rarely recognizes on his own: the surrounding neighbors or the plans for the neighboring plots, regulations regarding the number and location of entry roads, the necessity of land filling, slopes and fortification needs, again the impact of heavy rains and the previous use or soil contamination of the “plot” should not be left without evaluation. In total, SANET ASEAN ADVISORS examine over 80 criteria to ensure that land developers or landowners do not succeed in their first attempt to get rid of their less salable land plots to an easily fooled “newcomer” to the country.
6. Tender and Assignment
“Better safe than sorry”, is the thinking of many foreign companies, and they opt for an international construction contractor, who quickly charges 30-50% more than local competitors for construction work. The anger is then huge when the work is carried out by exactly such local builders, and the international contractor demands the extra price acting solely as the “project manager”. SANET ASEAN ADVISORS know about reliable local General Contractors and find project managers who will supervise the project with competence and for a real appropriate remuneration. Sanet takes care of the pre-qualification, the preparation of the tender documents and supervises the whole process as a partner of the investor until the assignment.
7. Recruiting the right employees with CREATING CAREERS
Ultimately, it depends on people whether a project can be led to success. It is essential to find and qualify employees who, according to their education and character, will be capable of advancing a company. CREATING CAREERS is the Business Unit of the Sanet Group, which possesses many years of experience in the search and placement of executives and middle management for international medium-sized companies, especially in Thailand.
8. Go-live – the successful conclusion
To successfully “go-live” with a company requires a lot of attention to detail. The Sanet Group with its approximately 40 German, Austrian, French and Thai employees is ready to assist in any specific company situation.