As a consultant and “cultural ambassador”, Sanet helps a German machine builder with its Joint Venture in Thailand.
The German machine manufacturer held 75% of a sales and service Joint Venture in Thailand. A Thai partner owned 25% of the shares and managed the business single-handedly and largely without any direct intervention by the German majority partner. Little attention was paid to the Thai subsidiary.
The earnings were okay, but the sales figures were not impressive enough to make the Thai company the focus of the group management. After the company was established in Thailand, the German Controller came once a year for the annual accounts and soon returned home without any major problems. Market shares, market policy and the local company management were largely unaware of the situation at headquarters.
The surprise came as soon as the Thai partner wanted to introduce a successor.
“If you sweat you work” Based on this satirically exaggerated principle, the Thai legislature requires a work permit for any activity that requires mental or physical exertion, regardless of whether it is paid or not.
Misleading or simply false information on the internet about new visa types such as the ‘Work-From-Thailand-Visa’, or “remote work” for foreign employers has led to confusion regarding the unchanged need for a work permit for Thailand.
Sanet Legal Ltd, the German speaking lawyers in Thailand provide clarification:
If you want to service the Asian markets from an environment characterized by a secure legal system, a top infrastructure and state-of-the-art industrial parks, the only question is whether you can afford in the long term to forego an investment in Thailand.
Investing in Thailand offers investors benefits that investors in other countries can only be envious of. The economic and political environment of this country in the heart of Asia is stable and characterized by thousands of modern manufacturers and suppliers in the electrical and automotive industries. Government incentives are generous, based on sound legal regulations and have been providing support for many years.
A labor market with technically outstanding engineers and skilled workers awaits investors. And an infrastructure with highways throughout the country, three deep-sea ports, punctual elevated express trains, whose network is growing rapidly every year, eases economic activity. An excellent healthcare system and a high quality of leisure time also make life worth living for investors in Thailand.
In addition, the Sanet Group has been offering a full service for investors in Thailand for 20 years, from strategy consultancy to legal implementation, the entire project organization with site evaluation and tendering, right through to applications for incentives or recruitment.
If you are looking for the right visa for a long-term stay in Thailand, you will probably come across the Thailand Privilege Visa. The new edition of the Elite Visa allows you a 5 to 20-year residence permit and luxurious privileges and services through Privilege Points. This is available to those who are able and willing to pay the necessary fees.
Having their own employees in Thailand seems to be the cheap and direct way to sales and service in Thailand for many foreign companies. But beware: The law prohibits foreigners from selling their products or even providing consulting or technical services through by themselves or through Thai employees. There is the risk of imprisonment, fines of up to USD15,000 per day and corporate tax for both business owners and employees.
The Thai Foreign Business Act protects Thai traders and marketers from foreign competition. Those who use their own employees to sell their products or services in Thailand turn them into an (illegal) permanent establishment. Draconian penalties are imposed for violating or circumventing the law. This also includes employing sales or service staff through personnel service providers or law firms. Often, the latter themselves are unaware of the risks they expose themselves and their clients through a “payroll” or “staffing service” ” for illegal activities of foreign customers.
In this article, we explain exactly how to recognize a punishable “bogus employment” and how to do it right.
Many people dream of moving to Thailand once they retire. There are a few things to take care of before that can be done, applying for a Retirement Visa being one of the most important ones. Getting a retirement Visa in Thailand is fairly easy once all the correct documents have been submitted to the competent Embassy. However, there are a few requirements that could cause problems for some applicants.
Mostly the applicants face difficulties with the financial requirements of the retirement Visas, as well as the health insurance requirements. The financial aspects of the Visas aside, there are some alluring sides to holding a retirement Visa in Thailand, multiple-entry travel and Visa extensions only once a year to name a few.
This year, when Sanet celebrates the 10th anniversary of its “Business Unit” (BU), it will look back on the support it provided to 25 mostly international large or medium-sized private companies when they entered the Thai market. Sanet founder Dr. Gunter Denk resumes what still convinces many companies to start sales and service in Thailand through a “BU” at Sanet.
“After having spent 25 years as an entrepreneur of a manufacturing company with strong internationalization, I knew what makes entrepreneurs tick when expanding into new markets,” he begins his description of how to safely enter the Thai market through a ” Business Unit.”
Europe and Germany in particular is losing its attractiveness as an investment location. More than 30% of SMEs are considering relocating their production abroad. But where to and how? And which arguments are there in favor of investing in Thailand? And who possesses on-site experience and a team that can help even in difficult situations?
Thailand is traditionally known as a country that has largely stayed out of major world conflicts and now boasts an ultra-modern infrastructure. Southeast Asia is considered to be the fastest growing and politically safest economic region until 2035. An investment in Thailand is safe.
And with Sanet ASEAN ADVSORS, “Pilots” are on site to guide you through a project from planning to start of production.
Recruiting and retaining loyal employees in Thailand needs cultural sensitivity. Particularly foreigners often complain about the high turnover rate of their employees in Thailand. Indeed, it is not easy to recruit loyal employees in Thailand and retaining them at the same time. Although this matter is not only a challenge in Thailand, there are cultural backgrounds to have a look at, especially in the Kingdom of Thailand. Sanet CREARING CAREERS points out what to look out for when selecting personnel and implementing personnel policies, especially in Thailand.
A highly specialized German company in plastic materials has a global market share of 14%. But in Thailand, despite preferential prices and fair margins offered by the partner, the market share remains at only 3%. This is something the management does not want to accept any longer. They hired Sanet to investigate a possible fraud by the distributor.
The HR manager is a key position especially for international companies investing in Thailand. He has important responsibilities in the company, and yet, recruitment in Thailand is not always HR’s strong point.
Many foreigners investing in Thailand are very keen to fill the managing directors by a countryman. This is basically correct, especially in the early days. The cultural proximity of the person in charge to the local management helps to install smooth processes and good leadership.
Therefore, finding an HR manager is one of the most important tasks. But caution is advised: Qualified recruitment in Thailand is often not the HR manager’s business.
HOW TO MAKE A JOINT VENTURE A RECIPE FOR SUCCESS IN THAILAND
It is easy for foreigners to set up a wholly foreign owned enterprise (WFOE) in Thailand. However, such firms are subject to limitations, for example in trading and providing services. A Joint Venture with a Thai majority, on the other hand, is free to do anything that is possible for Thai companies. Even in such a Joint Venture, foreigners may legally have a majority of voting rights and preferential dividend rights.
Yet this must be properly planned from the very outset and cleverly set up from a legal point of view. Once the company has been established, there is very little that one can do about it.
Sanet Legal, the German lawyers in Thailand for corporate law, explain how to make a Joint Venture in Thailand a successful concept. They also point out legal options that many investors have probably not considered yet.
Criticism is often seen as injurious by employees because it is often emotional and generalizing. “No one can really ever rely depend on you!” or “If you don’t improve, you’re going to have trouble here!”
Well, what Boss hasn’t let something slip out that sounds similar? And certainly no one seriously expects devaluations such as these, which are general and personal, to motivate employees.
But even factual critiques are often regarded by employees as personal attacks. Even slight criticism is perceived by many subordinates as an assault on their personality. It doesn’t help to say that none of the criticism is meant in a personal way.
CREATING CAEREERS, Sanet’s German-speaking recruitment agency in Thailand, presents an exciting assessment system as a solution.
• Cooperation with Bodo Möller Chemie
• New business unit with IT-M
• Sanet as a guest at BOI
Sanet assists SMEs in their investments in Thailand with practice-oriented advice on legal matters, investment promotion and project management.
Investing in a new market requires high professionalism of the management. The basis for decision-making must be a meaningful analysis of potential. This includes “quantitative” data, but even more so “qualitative” information about the entrepreneurial opportunities to exploit the identified potential.
The success of a business will stand or fall with its management. This is particularly valid for freshly founded subsidiaries, but also and especially for organizations in a critical situation. It is not uncommon for start-ups failing on this question. Or else they have to accept heavy initial losses until a subsequent improvement is made.
• The Free Movement of Skilled Workers in ASEAN
• Only two shareholders now in the Co. Ltd.
• the Elite Visa: here’s how!
Sanet Legal provides an overview of developments on the free flow of skilled workers and professional services in ASEAN
Sanet Legal explains the benefits of the Elite Visa for long-term residence in Thailand and provides legal advice on visas and work permits in Thailand.