There are a few important practices new business investors in Thailand should know before plunging into the klong (canal) of commerce in the City of Angels and the Land of Smiles.
Twenty years ago, a Singaporean wanted to open a new trading business in the northeastern part of Thailand. At the first meeting with the local business suppliers in Chiang Mai, he asked for a big discount as he smiled smugly. But his smile faded when the locals calmly placed their nine-millimetre handguns on the negotiating table.
In September 2016, a famous Singapore Chinese television host and her husband wanted to do business in Thailand and approached me for advice as many others had done before. But they wanted free advice. So I asked them to wait for this article in Today’s Manager. I can tell you now that they were not pleased with my answer. Singaporeans, like many Southeast Asians want things for free. Their impatience made them fail the first test of doing business in Thailand. Before you start doing business in Thailand, you should first assess yourself and your own company. Are you patient? Is the kind of business that you wish to pursue in Thailand suited to the kind of business that you have done previously? Unlike other countries, especially Singapore, doing business in Thailand requires a lot of patience. Customers and clients as well as shippers and local partners are often late. Sometimes, both don’t show up. In the west, this is known as being unprofessional but in Thailand, it is part of the mai pen rai (it’s okay, don’t worry) attitude.
Many farang start complaining from the moment they step foot in Thailand. Thai people do not like complainers. If they protest in public, get drunk, and/or kill one another it’s ok, because it’s their country. They don’t have to live by your rules. It irritates Thais when you talk about better laws back home. They are too polite to show you the door but they certainly think about it. Without doubt, complaints about service standards, police investigations, or petty corruption are often very legitimate. Part of the reason is because Thailand has a high concentration of poor people and criminals in the same densely populated places. Rather than complain, learn from awkward situations so that you don’t have to complain again.
The devil of corruption lives in the City of Angels. So if you want your business permits immediately, then you have to grease palms. The bigger the investment, the more grease. But no one likes to be called corrupt.
There is a big difference between gift-giving and corruption although the line between the two has become a large, gray area. For example, many people give gifts of all types to their friends and business partners in this country where social status and a complex hierarchy exist. But gift-giving is not corruption. Corruption is defined as the abuse of authoritative public office for private gain. 1 Gift-giving in Thailand is not corruption unless you give your gift to a public official for something in return. Know the difference.
There is nepotism in Thailand too. Nepotism is about using authoritative public office or political influence to appoint immediate family members to lucrative positions in Public Private Partnerships (PPP), government linked companies, public positions, or political office. This means that a Thai prime minister who appoints a relative to high public office or a lucrative government-linked business is practising nepotism. Prime Minister Chan-o-Cha is careful not to practise nepotism as Thaksin did with his wife and relatives when he was prime minister. In that sense, Prime Minister Chan-o-Cha is an ethical civil servant. But he did overthrow a democratically-elected (but corrupt) prime minister. Thai people take pride in a family member who works for the government. If they help you, they expect something in return. They say that it is better to bribe than not bribe at all. A bad bribe is insulting and can backfire. Never accuse a Thai person of corruption. Remember that for every corrupt crook and nepotistic politician, there are moral ones too who will happily take you to court.
The King and the Royal Family
Thais are a self-conscious people who do not like “to lose face”. Don’t tell them off for being late. Learn the proper way to wai (Thai greeting) a Thai person and do not overtly bow when you wai a person of lower status than you. You will embarrass a chambermaid or a taxi driver if you give them “too much status” and bow lower than they do. They might even think you are mocking them. Never say anything negative about the King or the Royal Family. The Thai King is a demi-God. Be respectful as you pass by his palaces or his portraits and never defame or scandalise his name or reputation. Severe lese majeste laws await local and farang offenders.
Thailand is one of the oldest civilisations in the world with many customs. Buddhist-Hindu temples are sacred. Pointing with your feet is exceptionally rude as well as touching someone on the head (the most sacred part of their body). Women and men should dress appropriately in public as overt physical contact embarrasses Thai people. Be careful when meeting with the women who accompany your business partner. The young lady may not be his wife and could be his mistress or his daughter. Thailand has a very tolerant attitude towards gays (and lesbians). Remember not to impose your views about gender at business meetings and social events. This is because the local partners may have a son or daughter who might be gay. Leave your petty jokes and racist comments at home. Being politically correct may sound hypocritical but on the other hand it can be considered as being polished. Dress conservatively and look at the good side of things. Remain civilised and culturally sensitive when doing business in Thailand and your business will prosper.
1 Rappa, AL, 2017, The king and the making of modern Thailand, London, Routledge.
Copyright © 2017 Singapore Institute of Management