Entrepreneurs and investors seeking to establish a business presence in Thailand often face a crucial decision: whether to start a new venture from scratch or take over an existing business. While both options have their merits, this article aims to shed light on the numerous benefits associated with acquiring an existing business in Thailand. From reduced risk to established customer bases, acquiring a business can offer a significant advantage for aspiring entrepreneurs. Here are some compelling reasons why taking over an existing business in Thailand can be a smart move.
- Established Infrastructure and Operations:
One of the primary advantages of acquiring an existing business is gaining access to an established infrastructure and operational setup. This includes premises, equipment, suppliers, inventory, and sometimes even an experienced workforce. By taking over an existing business, entrepreneurs can save valuable time, effort, and resources that would otherwise be spent on building these foundational aspects from scratch. This head start can significantly streamline the process of launching and scaling a business in Thailand.
- Established Customer Base:
Another major benefit of acquiring an existing business is inheriting a pre-existing customer base. Building a loyal customer following takes time and effort, but by purchasing a business, entrepreneurs can tap into an existing customer base that already trusts the brand or products. This provides a strong foundation for growth, as loyal customers can contribute to recurring revenue and word-of-mouth referrals. Additionally, an established customer base can offer valuable insights and feedback, enabling entrepreneurs to better understand the market and tailor their offerings accordingly.
- Reduced Risk and Proven Track Record:
Launching a new business always carries an element of risk, including uncertainties related to market acceptance, profitability, and competition. By acquiring an existing business with a proven track record, entrepreneurs can mitigate some of this risk. The business’s financial history, customer reviews, and existing supplier relationships can provide valuable insights into its performance and potential. This information can guide entrepreneurs in making informed decisions, reducing the inherent uncertainties associated with starting a new venture.
- Regulatory and Legal Compliance:
Thailand, like any other country, has its own unique regulatory and legal requirements for businesses. By taking over an existing business, entrepreneurs can benefit from the previous owner’s experience in navigating these regulatory frameworks. The business would likely already have the necessary licenses, permits, and compliance procedures in place. This advantage not only saves time but also reduces the chances of regulatory hiccups or legal challenges during the early stages of operation.
- Brand Recognition and Reputation:
Building a brand and establishing a positive reputation in the market can be a time-consuming process. Acquiring an existing business grants entrepreneurs immediate access to an established brand name and reputation. This recognition can play a crucial role in gaining the trust and confidence of customers, suppliers, and other stakeholders. Leveraging an established brand can lead to a smoother transition, enhanced market presence, and increased opportunities for growth.
Conclusion:
Taking over an existing business in Thailand offers numerous advantages for aspiring entrepreneurs and investors. From the established infrastructure and customer base to reduced risk and regulatory compliance, the benefits are undeniable. Acquiring a business provides entrepreneurs with a head start, enabling them to focus on growth and innovation rather than starting from scratch. However, it is essential to conduct thorough due diligence before making such a significant investment. By evaluating the business’s financials, market potential, and growth prospects, entrepreneurs can make informed decisions and maximize the benefits of taking over an existing business in Thailand.
Now that you are considering to acquire an existing business, these are the general guideline to ensure a smooth and safe purchase.
- Company Background check— Ensuring the current shareholders and Director details are correct
- Due diligence check— Recent financial balance sheets, whether the company owes any back taxes or is facing any legal proceedings
- Drafting of a Sales & Purchase Agreement
- Minutes of Meeting
- Receipts of the share sale
- Shareholder registration book and shares (new issues)
- Shareholder registration book
- Share certificates
- Newspaper Advertisements
- Resignation from the Director
- Director Amendments
- Director Appointments
- Shareholder registrations at DBD
- New bank account opening
- Gov’t fee and applicable duties
As these process can be quite technical, it is best that you appoint a knowledgeable legal person to assist you as many of these documents are in Thai and it is rather technical as well.
You may check out UnionSPACE – Buying an existing business service to help you with the process.
Find out more at: https://unionspace.co.th/buying-an-existing-business-in-thailand.php or feel free to contact us via Line: https://lin.ee/QUvqnS or WhatsApp: https://wa.me/66620155533
