Establishing a Small Business
Tim Slack a Chartered Certified Accountant in the UK, who admits
to a natural tendency towards risk aversion, wrote "I am considering
moving to Phuket at the end of this year with my wife and 2 children
and renting a premises to set up a small bar on the Island, possibly
Kata or Karon areas. I am not looking to get rich quick or even get
rich at all for that matter, I simply want a business that will give
me something to occupy my time and provide a base from which to build
upon. I would need to know more about the costs of Work Permits, the
need for, operating licenses (liquor, music, dancing), restricted operation
days, and liability insurance
That's a lot of detailed questions and rather hard to answer comprehensively in the space available. I will try. Your preference for risk aversion would suggest to me that you should stay away from both bar business in general and rented property in particular.
Given the typically poor state of commercial rental properties and the need to commit considerable expense to renovations and fit out in order to get ready for business operation and the limited rights of lease renewal (rollovers) at the end the standard rental contract term (which most landlord restrict to 3 year maximum), I would start by recommending that you should try to acquire a longer term registered lease (secure tenure for more than 3 years can only be guaranteed by registering a lease) or better still acquire a freehold property. In this way if you have a slow business start up you will at least retain the physical asset and all your improvements (which are likely to rise in value) - and not risk loosing it all at the end of three years to a weak rental renewal clause.
As a place of business Phuket is becoming increasingly competitive - particularly in the oversupplied bar / restaurant sector, where I would estimate that only 20% of the businesses have been a real business success for their owners. As a foreigner new to Phuket you will also be faced with doing business in a totally new environment. With these two factors in mind I would advise that you go into a business of a type that you have operated before where you already have proven businesses skills and can provide those at a competitive advantage locally.
Generally foreigners in Phuket setting up small businesses have had
the greatest success in service and consultancy businesses.
To work (be visibly operating a business) rather than simply to own one , you will need to have a work permit. Generally you will get this by employing yourself in a business (company) that you set up here in Thailand. Setting up a company will cost upwards of 25,000 Baht (depending on the capital of the company and the law firm retained) - A work permit cost 1,000 Baht per annum (plus all the time and trouble of the paper work) - Generally your Thai company will need a capital of at least 2,000,000 Baht to be approved to employ a foreigner (you).
Rentals (under 3 years) are not required to be registered - and most landlords with commercial property being rented / leased for 9 years or less will insist (for tax avoidance) that leases are not registered. If registered, Lease registration fees are 1% stamp duty 1/2%.
Restaurant license and liquor licenses are issued pretty much on demand. Live Music, dancing, go-go, disco etc will also require special licenses and are much more complex and expensive to obtain (and are in many cases such as disco license issued under strict quota - so much so that you often have to buy the license, for a considerable premium, privately from an existing operator)
There are two or three public holidays a year when alcohol may not be sold - same applies on days of local or general election (we had fours so far this year). Closing time is (officially) midnight, but extensions can be granted by the police (and in practice many bars in several locations stay open all night)
Liability insurance is not required and most small businesses don't have any. Thailand in not a litigious place and the scope and value of liability claims are very low - it is however available if you require it.