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  1. #1
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    Simon43's Avatar
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    New hotel build in Myanmar

    Right! It's official!! Having managed to build and open my 2 small hotels by Phuket Airport, (and with additional room construction forging ahead ok), I'm venturing into the deepest unknown (sort of) by building a small resort just across from Ranong, in the Myanmar border town of Kawthaung (Victory Point).

    Kawthaung is a very popular visa-run destination, but most visitors get their passport stamped and come straight back to Ranong on the same day. The primary reason is because the town offers no decent or western-managed accommodation. (There is the upmarket Andaman Club hotel just across the water on the casino island, but it's a little expensive for many visa-runners and tourists).

    One good thing about Myanmar is that foreigners can own businesses 100% in their own or company name - no Burmese shareholders required. Land cannot be owned, but long leases are available.

    I'm been going back and forth from Kawthaung over the past few weeks and I have to say that the town and nearby beaches are worth a short visit. (I did drop by the Honey Bear Hotel on the sea front but it's .. er .. grim).

    It will take me quite a few months to get my act together on this project, but naturally TD members will be the first to see exclusive photos of the project build.

    Simon

    BTW - I do not actually have any funds for this project, but I consider this a minor issue. My marketing machine is being greased as we speak.
    Groping women when you're old is fine - everyone thinks you're senile

  2. #2
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    Good luck with this Simon. I'll be watching for the continuation of this thread with interest. Take plenty of pics.

  3. #3
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    Simon, you are mad - but we know that already...

    Good luck, and try not to go into the wilderness of Myanmar, your antenna in hand, frightening the locals...

  4. #4
    I am in Jail
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    what an interesting project that will be,

    how do you intend to fund this project ? and what costs are you expecting ?

  5. #5
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    I like your style. We have some money and I have always enjoyed my journeys to Burma, although they occurred long ago. Nice.
    Last edited by aging one; 24-03-2012 at 05:58 PM.

  6. #6
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    right then, good luck, lets have few pics

  7. #7
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    There are some very sound, commercial reasons for building a small resort just across from Ranong. Myanmar is opening up to tourism and I want to be play my own small part.

    Funding needs to be about $300,000 for a 10-room 'hill-station' style of resort with swimmiing pool, (so I'm not looking to build on the beach, but rather up in the cool hills above the town ==> a-la-Raj style).

    Now where do I find $300k? Well, from previous experience, there is no point in seeking this from 'farang' in Thailand. Whilst many of our Thai friends rallied round to help when we had cash-flow problems during our last projects, this was not the case with my farang colleagues. (I must have a shady look...)

    But to be honest, offers of funding are already coming from overseas radio amateurs. Many of these guys (99% of hams are men...), are VERY serious about their hobby, and want to contact a radio amatuer in Myanmar, (It's a 'my dick is bigger than yours' thing ). My plans are to incoroporate a radio-room in the new resort and I will invite funding from the ham community, so that they can benefit from both the commercial resort project and from the radio hobby.

    I will set up a web-site with full details, tally of funds raised so far etc.

    Yes, I am a bit mad .. probably. But Kawthaung is reasonably modern, with paved roads, 3-phase leccy etc.

    Now I just need someone to open a decent coffee shop on the seafront.

    Simon

  8. #8
    Member richie22's Avatar
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    Quote Originally Posted by Simon43 View Post
    There are some very sound, commercial reasons for building a small resort just across from Ranong. Myanmar is opening up to tourism and I want to be play my own small part.

    Funding needs to be about $300,000 for a 10-room 'hill-station' style of resort with swimmiing pool, (so I'm not looking to build on the beach, but rather up in the cool hills above the town ==> a-la-Raj style).

    Now where do I find $300k? Well, from previous experience, there is no point in seeking this from 'farang' in Thailand. Whilst many of our Thai friends rallied round to help when we had cash-flow problems during our last projects, this was not the case with my farang colleagues. (I must have a shady look...)

    But to be honest, offers of funding are already coming from overseas radio amateurs. Many of these guys (99% of hams are men...), are VERY serious about their hobby, and want to contact a radio amatuer in Myanmar, (It's a 'my dick is bigger than yours' thing ). My plans are to incoroporate a radio-room in the new resort and I will invite funding from the ham community, so that they can benefit from both the commercial resort project and from the radio hobby.

    I will set up a web-site with full details, tally of funds raised so far etc.

    Yes, I am a bit mad .. probably. But Kawthaung is reasonably modern, with paved roads, 3-phase leccy etc.

    Now I just need someone to open a decent coffee shop on the seafront.

    Simon
    But it's still a Shitehole

  9. #9
    Have you got any cheese Thetyim's Avatar
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    Where is the nearest place to get a Myanmar visa ?

  10. #10
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    Where is the nearest place to get a Myanmar visa ?
    If you do a visa run to Kawthaung from the Thai town of Ranong (just across the river estuary), then you do not need to get a Myanmar visa beforehand - you are stamped in for 10 days ($10 fee).

    But it's still a Shitehole
    Depends what your definition of shitehole is. Kawthaung seems to be better than many other areas, with paved roads (better than Laos!), 3 phase leccy etc. From my trips in and around Kawthaung, I reckon that little town is sitting on a potential goldmine of tourist revenues, especially with it's nearby beaches, islands and diving.

  11. #11
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    Wish you the best of luck.

  12. #12
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    Quote Originally Posted by Simon43
    I do not actually have any funds for this project, but I consider this a minor iss
    Quote Originally Posted by Butterfly
    how do you intend to fund this project ?
    Quote Originally Posted by aging one
    We have some money
    Quote Originally Posted by Simon43
    Well, from previous experience, there is no point in seeking this from 'farang' in Thailand.
    solved

    anyway, good luck Simon

  13. #13
    I am in Jail
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    Quote Originally Posted by Simon43
    Well, from previous experience, there is no point in seeking this from 'farang' in Thailand. Whilst many of our Thai friends rallied round to help when we had cash-flow problems during our last projects, this was not the case with my farang colleagues.
    the last people to ask for serious money are farangs,

    to be honest, there are a lot of farang scammers in this country, so can't blame them for refusing to fund other farangs. Every time I got scammed here with cash, even for small amounts, it was by farangs.

    Quote Originally Posted by Simon43
    Now where do I find $300k?
    if you can get bank funding, go for it. If you have equity, use it to secure the bank debt. Debt is cheap and a great way to run a business, despite what many think. Of course the business needs to be successful, otherwise debt becomes an absolute disaster.

  14. #14
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    ^ borrowing is fine for short term loans but paying 7% is painful

  15. #15
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    Now where do I find $300k?
    I have a very clear idea how this project will be funded. When I previously commented on one of the amateur radio forums that I was going to try to get a very temporary radio licence to operate for a few days in Myanmar, I received unsolicited payments (yes money!) via Paypal from other radio amateurs who are that keen to have an amateur radio operation in Myanmar.

    There is a lot of money in amateur radio - many retired guys with time on their hands.

    Have a look at this YouTube clip - it shows the massive radio antenna that some 'hams' have installed to help their hobby - serious $$$$




    So my plan is to offer hams the opportunity to make contact with a permanently-installed amateur station at this new little resort - and that can only happen if some of them become investors in the hotel.

    It's a reasonable strategy if you're a serious ham and have a few thou $ (or more) spare. You get to invest in an interesting project which should give a reasonable return (the business pays 0% tax for 8 years and most revenues never even enter Myanmar - online bookings paid into an offshore account). Plus, if the Myanmar authorities play ball, the resort has a ham licence and other hams can also book 'ham' holidays at the resort.

    Simon

  16. #16
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    hardly kosher then, but sounds good

  17. #17
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    Quote Originally Posted by DrAndy
    borrowing is fine for short term loans but paying 7% is painful
    long term loans are better than short term loans actually,

    the reasons for debt is that it will make a successful business more profitable for the owners and will force a certain fiscal discipline for management, it will also "smooth" the cash flows situation which is often 90% of the reasons why small businesses fail

    preferred shares with fixed paying dividend "coupon" can be a good compromise between debt and equity for small business ventures
    Last edited by Butterfly; 25-03-2012 at 08:16 AM.

  18. #18
    I am in Jail
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    Quote Originally Posted by Simon43
    So my plan is to offer hams the opportunity to make contact with a permanently-installed amateur station at this new little resort - and that can only happen if some of them become investors in the hotel.
    interesting idea, you could also issue shares offshore to finance the hotel

    but you could expose yourself to possible accusation of frauds when the link between the hotel company in Burma and the shares issued offshore are not clear or straightforward.

  19. #19
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    Begbie's Avatar
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    What's the law and order sitution over there? Will you be asked to make large donations to the army and police?

  20. #20
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    Perhaps I didn't explain enough - the Myanmar Foreign Investment Law provides 8 years of 0% tax on profits, no import tax on building/operating materials, all profits can be exported tax-free. So there is no fraud - it's simply much easier to maintain the funds offshore because Myanmar does not yet have a decent banking system.

    BTW, with the exception of US citizens, it's perfectly legal for citizens of other countries to invest in this type of venture in Myanmar - the election results in Myanmar next month may pave the way for the US to also relax their sanctions on investment

    Begbie - the l and o situation in Kawthaung is totally stable - no payments required. Kawthaung is about 2,000km away from the northern 'hotspots'

    As far as borrowing from banks is concerned, I have zero interest in that idea. I do not like banks (all banks), since it's harder than fcuk to get money out of them and they can 'pull the rug' out from under you at any whim and fancy.

  21. #21
    The Dentist English Noodles's Avatar
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    Quote Originally Posted by Butterfly
    but you could expose yourself to possible accusation of frauds when the link between the hotel company in Burma and the shares issued offshore are not clear or straightforward.
    He'll end up with accusations of all kinds opening up a radio station in Burma, the junta will never allow it, roll on being arrested and accused of being some sort of spy.

  22. #22
    The Dentist English Noodles's Avatar
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    Quote Originally Posted by Simon43
    the election results in Myanmar next month may pave the way for the US to also relax their sanctions on investment
    You ain't spent much time there have you Simon?

  23. #23
    I am in Jail
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    Quote Originally Posted by Simon43
    the Myanmar Foreign Investment Law provides 8 years of 0% tax on profits, no import tax on building/operating materials, all profits can be exported tax-free. So there is no fraud - it's simply much easier to maintain the funds offshore because Myanmar does not yet have a decent banking system.
    the fraud is not about the business model with promises of no tax, the fraud will be to issue shares or "notes" to fund a project that has a weak link with the actual asset. This is where an investor could claim fraud. Keeping the money offshore will actually demonstrate that the money was not used locally to fund and operate the project.

    Quote Originally Posted by English Noodles
    He'll end up with accusations of all kinds opening up a radio station in Burma, the junta will never allow it, roll on being arrested and accused of being some sort of spy.
    indeed, that's a far greater risk, it's too early to judge the situation in Burma. I know a lot of "amateurs" are jumping on the Burma bandwagon in the last few months, they are the same who jumped on the Vietnam bandwagon in 1995 and got fucked over Saigon style.

    The HAM radio angle despite being interesting as an outpost is far too risky politically.

  24. #24
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    I note all comments - both positive and negative. As with any commercial project, there is an element of risk, and any potential investor needs to consider this when making their call - they could lose all their investment of course. Holding the funds offshore is perfectly reasonable since they cannot be held 'onshore' - the Myanmar banking system cannot yet support that.

    The risk of being arrested re the amateur radio is negligable. A number of authorised amateur radio ops have taken place in Myanmar over the years, but none on a permanent basis. In any case, the project is primarily to build and operate the resort - the issue of the radio licence is not guaranteed at all.

    Perhaps the doomsayers should note BettyBoo's post 'Simon you are mad'. So humour me on this one and continue to enjoy your cuppa tea and sunday newspapers in your 'safe little world'

    Simon

  25. #25
    Thailand Expat ossierob's Avatar
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    yes there are many risks involved in your venture Simon but I will watch your developments with interest

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