Investing in a massage shop

[Calvin]

A friend is considering buying out a partner in a massage shop in the tourist area, mostly for fun but possibly for a return on his investment and has some questions which I can't answer. Maybe the forum can help? The outlay is 70,000 thb. Not too much to lose. Because he's a foreigner the shop will be solely in the remaining partner's name. She's happy because there is some tension between the partners and she wants to buy her out. My friend is the willing patsy.

1. Can he insist that the day's takings are banked daily?

2. Can he protect/secure his investment in any way, for instance using a Thai proxy, which should leave him the the option of being bought out himself at a later date? Or does he just have to write it off?

3. What is the process for transfer of partnership?

Any other sensible thoughts appreciated.

[SunandFun]

Your friend should get some "Legal Advise" and not some "Forum Advise." IMHO
70,000 Baht is not a lot, but if he wants to lower his risk, he should get it done legally. Only thing is, he may spend the same to do this. So the question is, is it worth the risk. Of course if he likes massage and he gets one every day, he will get his ROI in 234 days.

[Lung Per]

Your friend should get some "Legal Advise" and not some "Forum Advise." IMHO
70,000 Baht is not a lot, but if he wants to lower his risk, he should get it done legally. Only thing is, he may spend the same to do this. So the question is, is it worth the risk. Of course if he likes massage and he gets one every day, he will get his ROI in 234 days.

Agree with the above. Do seek legal assistance.

"Investing" in a massage parlor may well turn out to become a terrible can of worms.

[tonymaroni]

Absolutely no protection for his investment at all.
He is giving her money without his name on anything.
He can insist on nothing legally.

I have a bridge in Brooklyn that will reward him handsomely if he needs another investment.

Tony

[obiwan]

If the takings actually get banked at the end of each day how can he be sure that the banked takings are the actual daily takings unless he is the there in person.there is very little proof in the way of takings in a massage shop unless he set web cams up in each booth which could get him in more trouble. Although he could use them to bribe unaware husbands which might give him a better return for as long as it lasts

[johnnyk]

Hope he's not thinking, "Money for nothing, chicks for free". It's his 70K, not a lot. And he may get some good stories out of it.

[Takiap]

Even with legal advice/assistance, I can't see how it would be possible to determine how much money is made each day unless he is actually on the premises. He would had to rely solely on the other partner's honesty.

Then again, 70,000 is not really much of an investment is it? If he just wants to have a laugh, then why not.

[Roel]

70,000 is not so much, but I am afraid that is not the end of it. Once they have a farang partner they will start complaining that business is slow but improvements and additional investments are suddenly desperately needed. Oh yes, and the police came to collect 10,000 Baht so you owe me 5,000. No of course they did not give a receipt. Etc, etc. Personally I would not do it.

[Takiap]

I would maybe consider it, but as a partner, I would personally want to evaluate the girls in order to determine they have the right skills for the job. Perhaps an initial evaluation, followed by a regular assessment every three months.


I think if the OP or his friend in this case is living here for a reasonable amount of time, even if only for six months or so, it might be worth it just for the experience.

[Frank Hovis]

Isn't it perfectly legal for a foreigner to own shares in a Thai company (as long as the sum of all foreigner shareholding amounts to less than 49%)? Owning shares doesn't require a work permit.
Surely if your friend is 'buying out' a share from an existing partner it will be 'shares', not just a notional idea that they somehow have something to do with the company.
Remember only ever buy 'paid up' shares - unpaid up shares will leave your friend liable for some (or possibly all) of the debt the company may accrue (or may already have accrued).

[musungu]

I honestly believe the best advice to your friend is DO NOT BUY, be it a Massage Shop. Beauty Shop or Bar.

If he wants advice from a lawyer then it needs to be good advice,but good advice costs, and the relative small amount of this purchase would soon look insignificant once legal fees are raised.

Do him a favour and tell him to use the money having massages - that should take up plenty of time and be trouble free.

[MrPlum]

I don't see the problem. It is only a small investment and even if monthly income is small or non-existent, if you have a Thai nominated as the partner on your behalf, it will be harder for the existing partner to cut you loose and you can sell your stake and recover some or all of your initial outlay.

If he's a sleeping partner, he shouldn't need or may not want any further input. Agree up front that any funds needed for upgrades, repairs, police bungs, etc... come out of existing income. If she refuses, then back out. If the remaining partner reneges on the monthly takings and uses it for nightly parties, then you could get the Thai proxy involved. Tell them they can collect and keep the money, as an incentive.

You should get an idea of the monthly takings from the existing books. If they have a record of takings for high season this should also give you an idea of likely revenue. If it looks poor, either the shop is a loser or they aren't keeping records. Don't invest. If the books look honest, agree to split the massage income. Your partner should be happy because she gets extra income from 'extras'. If she's attractive, that should be significant. I would also find out whether the girls keep all the 'extras' or only part of them? That could make a big difference to revenue.

I'm assuming the shop will offer extras because, if it's legit-only massage and there are other shops close by who are offering them, you may find it a struggle to compete and survive. If it's mostly tourists, you may be fine.

If you know any other shops you could ask what their typical takings are and what kinds of problems they encounter. If they are willing to share, that should tell you if it's worth it.

Some bars have had trouble with the music licensing scam. Not sure if this applies to massage but you might wish to check. Play licensed music only.

Might be fun. A partner in a massage shop seems exotic. Next stop, brothel-keeper.

[Frank Hovis]

from the existing books.

Both sets !

[centermid7]

Actually kinda of a funny thread . . .

It would not be an "investment" at all. Somebody puts up some money and then it's gone.

However!!! Whoever puts up the money ought to go get a hummer from time to time and within 60/90/120 days they will have been repaid.

Cheers

[MrPlum]

However!!! Whoever puts up the money ought to go get a hummer from time to time and within 60/90/120 days they will have been repaid.

Ensure the Thai proxy is the Chief of Police wife. Sorted.