As the Thai economy continues to mature, it is becoming easier to find a going concern that fits with your interests and skills. However, this is one of the riskiest areas of business investment. Considerable care should be taken to investigate all aspects of a proposed business purchase. The normal due diligence taken when purchasing a business overseas should also be rigorously applied in Thailand, and there are specific areas which require special scrutiny. This applies equally to buying a business outright and buying a share in one.
The first and most important consideration is obviously the price. An initial asking price may be much higher than the vendor is willing to accept. Thai and foreign vendors will try for as much as possible, particularly if the purchaser is perceived to be inexperienced in Thailand. Some ridiculous asking prices can be found quite easily on the Internet, because many foreigners make the mistake of converting the asking price into their own country's currency, rather than analysing the local value of the business. Asking prices of more than ten times the real value of the business are commonly advertised, and paid. This is especially the case for bars and restaurants in the popular tourist areas of the country. A careful valuation of the premises, fixtures, fittings and equipment, and stock should be undertaken. Local knowledge, if it can be obtained, is invaluable in assessing whether the asking price of a business is a fair one.....
