How to Start a Business in Thailand

Are you looking forward to starting your business in a developing country like Thailand? Then you are at the right place. To make your business journey easier, here are the essential steps and tips on how to start a business in Thailand. Follow these guidelines for effective guidance.

Either you want to take your existing business or want to start up a company in Thailand. One has to face a lot of problems with hundreds of formalities. To tackle such situations, first of all, you have to understand the market and industrial trends in Thailand. For this, let’s have a look at Thailand’s demographics.

 About Thailand

 

• Thailand, a wonderful and attractive tourist place, offers great opportunities to bring your business idea into the country. Before 1990, Thailand was merely an agricultural country. However, the economy changed rapidly and developed into a well-organized industrial sector. 
• Did you know that Thailand is in the second position in terms of the highest GDP in Southeast Asia? This is because the country is developing quickly and allowing new businesses to grow and expand. You can also take a shot, grab your chance, and take your business to the next level. 
• In the upcoming future, the economy of Thailand is expected to rise by 3.7%. Transport, Infrastructure, IT, Manufacturing, and Electronics industries will likely boom this year. Moreover, the tourism and food industries are trending throughout the year due to its beautiful landscape. So, no matter which type of business you start, it will flourish in the country. Thus it proves to be beneficial to start a business in Thailand. 

Things to keep in mind before launching your business in Thailand

Now, What are the procedures? What are the policies and formalities to start a business in Thailand? What are the legal implications of the government? Let’s understand these in detail.

To get eligible to start a business in Thailand, you must complete the registration process. A procedure to set up a company in Thailand. Here are the steps to complete the company’s registration process.

• Choosing the appropriate name for the company

First of all, whether you are going for a partnership company or a private corporation, you have to reserve a name for your company. You can give 3-4 names for eligibility to the Department of Business Development. Also, the name should not be similar to any existing business in Thailand. Once you submit the name, the department takes up to 30 days to verify and register your company name. 

• Submission of Important Documents

In the second step, you have to prepare and submit a lot of documents such as:

• Memorandum of Association
• List of Shareholders
• Company address with branch details
• Addresses of directors, promoters, and shareholders
• Article of Alliance
• Proposed and Reserved Names

• Initial Capital Deposit:

After Submitting the essential documents, owners have to pay one-fourth of the initial capital to the corporate bank. For this, you have to open an account in the same bank. One also has to pay a fee for the company’s stamp which costs around 400-500 THB. 

• Apply for a Tax ID Card

The next step to start a business in Thailand is to apply for a Tax ID Card. Within 60 days of commencement of business, owners need to file a Tax ID Card from the Revenue Department. If your revenue surpasses 1.8 million TBH, you may also have to apply for VAT( Value Added Tax).

• Visa and Work Permit Application

The only thing that you need to enter the country and allow you to work there is the Visa grant. Relevant work visas are required for owners and workers to stay in the country and to work legally. Photos, medical reports, school/college certificates, and salary slips are some documents that you will need to apply for a visa.

 What Type of Business can you start in Thailand?

The question always arises of what kind of business one can begin in Thailand. So, here is the list of the best and most profitable businesses to start in Thailand. 

• Online/E-Commerce

As a wave of online shopping is catching attention, it’s the easiest type you can start with. In the present time, every business needs a website to increase its online visibility. So, either you manufacture, import, trade, or do some sort of drop shipping. Thailand is the place where you can nourish your E-Commerce Platform. 

• Restaurant/ Hospitality

Hotels and restaurants are among two categories that are growing rapidly. People usually dine out in restaurants and rent rooms in hotels while traveling. Moreover, due to hectic lifestyles, many individuals prefer to order food as an easy option. 

Additionally, during the peak season and festive occasions, hotels and restaurants earn more than any other sector. Thus, proving to be one of the most profitable and stable businesses to start in Thailand.  

• Franchise/ Outlets

Thai citizens like to eat fast food a lot. It is also easy to start a fast food outlet or franchise as you just have to own a share of the business and make an investment in a good location. For example, buy a franchise of Starbucks ( a beverage-selling company) and open a tourist place in Thailand. You will get some percentage and commission out of profit and the remaining goes to the Starbucks company.

• Catering Business

The catering business is a profitable and demanding business in Thailand. Marriages, Birthday parties, Office events, and other functions always need a catering agency. This industry is also expected to grow rapidly in the future. Hence, a catering business is not a bad option to proceed with. If you want to know more about how to start a catering business, this ultimate guide can help you a lot.

• Health Care

The industrial trend in Thailand is now moving towards the healthcare sector. People in Thailand are becoming health conscious day by day. The average life expectancy in Thailand is 65 to 70 years only which is not a great number. So, one can acquire a good market share in the health sector by providing healthcare products that help them to live a high standard of living. 

• Travel Agency

Thai people are also passionate about traveling.  Additionally, a large number of tourists visit Thailand all around the year. Through a travel agency, one can organize trips and tours for citizens as well as foreigners. They can also provide them with a tourist guide which can help travelers manage their trip accordingly. 

• Jewelry Store:

Thailand is the largest exporter of silver, and one can easily establish a jewelry business in such a country. There’s always a need for jewelry designers in the fashion industry. Moreover, this type of business is profitable in the long run. Thailand allows you to use the country’s resources to develop rare rubies and gems. 

• Freelancing

Freelancing is another option to start a business in Thailand. If you have demanding skills like graphic designing, software development, website creation and many more then you can start solely. In addition to this, if you have years of experience in such fields, then you can also start a freelancing agency.  

• Real Estate

This type of business is suitable for the residents because they only have deep knowledge of properties in Thailand. As a lot of immigrants settle in the country every year, the demand for flats, apartments, and houses rises. One can earn a good commission and profit through brokerage in real estate. 

• Import and Export

As a part of the World Trade Organization, Thailand allows the import and export of numerous goods. So, if you have a good knowledge of the import and export industry of the world, you can start this business with no excuses. Additionally, the excise duty and freight charges are comparatively lower than in other countries. Thus, one can earn a good margin through this type of business. 

There are many more profitable businesses to start in Thailand according to the customer’s demand and the market size.

A Complete Step-By-Step Guide on How to Start a Business in Thailand

One may face several different challenges while pursuing a business in Thailand. So, here is the complete step-by-step guide on how to start a business in Thailand. This helps you to overcome difficulties and nurture your business in Thailand. 

• Plan Your Goals

First of all, set up goals and choose your business niche. For this, choose a business type and start planning. Different goals are set for different types of businesses. Whether you want to start a private company or a public enterprise, targets are always different in both cases. 

• Select your Target Audience

After planning, the next step is to select a specific audience to target according to your services. In this case, the quality and type of products and services matter a lot. One can target audiences in terms of Age, Gender, location, Interests, and Occupations. 

• Competition Analysis

Analyzing and researching your competitors is an important step while starting up a company in Thailand. By doing so, one can know about the market share as well as the weak and strong points of competitors. Additionally, one can examine how they can provide different and better services from their competition. 

• Market Analysis

Along with competition analysis, one must also conduct market research. Before you know how to start a business in Thailand, you should know the industrial trends of your business category. Moreover, managers may also come to know about the customer’s demand and supply chain of products.

• Make Connections and Links

In the next step, you should make connections and links with the local citizens. By doing so, you can get more information about the place where you want to start the business. This will also help you to create brand awareness in the new places. 

• Work on your Products and Services

After completing the above steps, your next stage is to improve the quality of your products and services. Firstly, you should know your customer’s preferences and then develop the products according to their needs. This is important as the taste and living style of people in Thailand is different from other countries. 

• Enhance weak points

Once you are settled in the industry and want to grow more, you should develop your weak points into strong ones. Examine properly where your services lack and at which phase of the year, your business falls behind. Also, you should research your competitors’ growth rate every year and find where you can have an edge over them.

 Marketing and Advertising

• As a new business is entering into a new market, the only way to connect with customers is through marketing. After establishing the business, you need to work on marketing, branding, and advertising. To boost sales as well as revenue and to inform people about your services, marketing is an important factor.
• In the modern time, the most prominent and effective type of marketing is Digital Marketing. This includes the promotion of brands, products, and services through online platforms such as social media like Instagram, Twitter, and Facebook. Search Engines like Google and Yahoo. One can also take advantage of emails, websites, and many more digital platforms. 
• This elevates your business to another level which brings greater return on investment. Branding and Marketing are two major factors for brand awareness which are covered in this aspect. 

The Types of Companies which Thailand accepts are

• Sole Proprietorship

As the name describes, only one person should own the ownership of the whole company. This type of business is majorly restricted to foreigners. Only local people and citizens of America start a sole proprietor business. If you are eligible for sole proprietorship, you cannot pursue the banking and law sector. 

• Private Ltd. Company

One can start a private corporation, either in partnership or non-partnership. If you are opting for a partnership firm, then you have the choice for registration and non-registration. Generally, private companies are more profitable but have more formalities. For example, they have to maintain a particular number of shareholders, higher initial capital, and tax liabilities. 

• Public Enterprise

Earning profit is not only a single objective of every business. Thailand also offers businesses to start a public enterprise and enter the service sector. Starting a non-commercial business has its benefits such as tax rebates, financial incentives, and much more. Moreover, Public firms do not need to invest much in marketing and branding. 

• Joint Ventures

You can enter Thailand’s market by collaborating with established and existing companies. In Thailand, where already a lot of brands with competition and no monopoly exists, joint ventures are a good option. Many companies such as Maruti Suzuki, and Feat, and food outlets like KFC and Pizza Hut introduce themselves through joint ventures.

Thailand’s Support for Businesses

To make your business journey easier, the government of Thailand offers various rebates and financial aid to businesses. There are also some financial institutions and Departments which provide support to business owners. Let’s see how you can get financial aid in Thailand.

• For financial aid and incentives, one should register their business with Thailand’s Board of Investment. For small and medium-scale businesses, there is a different development that provides support to small businesses. 
• The Chamber Of Commerce allows you to find business owners in Thailand from your home country. They may also have created a support community to give resources and advice to new startups. Thus, it is not only useful but also helpful for newcomers to kick-start their business. 
• Crowdfunding is another option available in Thailand. If your business is going smoothly or your business idea is strong, then one can also approach Angel Investors. 
• Foreigners can easily get a loan from a corporate bank in Thailand. In exchange, you have to give something as collateral. 
• To extend your business reach and to meet new potential customers, one can participate in networking events. To do so, Eventbrite, Eventful, and Meetup are the options through which you can organize or join an event.
• For local startups, Startup Thailand is the initiative to support them. This program especially supports tech startups and provides essential resources to owners. 

Challenges In Thailand

Along with the positive sides, Business owners should also look into the negative and challenging sides. Here are the Challenges to starting a business in Thailand.

• Language Barriers

The first and foremost challenge to start a business in Thailand is the Language Barrier. Most of the documents and paperwork are prepared in Thai language. Foreigners face a lot of struggles while arranging the original documents in a foreign language. Thus, business owners need to hire a translator for all legal paperwork and provide duplicate copies in Thai language. 

• Thai Ownership

A foreign individual cannot hold a 100% stake in the company. There should be at least 51% of the company’s share in the hands of local Thai people. Also, the company should have more than two shareholders and directors for operations. 

Only a few types of businesses are allowed to have 100% foreign ownership. Also, only American citizens can have full ownership of a business in Thailand.

• Inappropriate Work Visa

A work permit is required to work in Thailand, but the problem is that the Thai embassy does not give appropriate visas. There are always some conditions in the work permit and it may take 30-40 days for approval. What’s more is that, firstly you will receive a visa for 90 days after that you have to extend your visa. Overall it is a lengthy process.

• Complex Tax Rules

The tax rules for foreign businesses in Thailand are quite complex and difficult to understand. One must hire an accountant to deal with the tax authorities. The rules change rapidly, so one has to keep an eye on them. Also, one should be ready to provide a large number of financial documents to the tax authorities.

• Corruption and Political Instability

The Thai government is not stable. In the past years, a lot of political parties have changed due to which corruption has increased in the country. As a result, business owners have to protect themselves from criminals as well as officers and give bribes to officials.

 Conclusion

• To conclude, Thailand is not a bad place to start a business. A well-growing country with tourist attractions can take your business to the next level. The GDP is expected to rise in the upcoming year and thus, gives a golden opportunity for business owners. Additionally, there are a lot of industries like e-commerce, hospitality, catering, jewelry, and more through which one can enter the Thai market. 
• If you do not have sufficient funds and resources, Thailand’s government helps you with that. It offers you various financial aid and investment policies to kick-start your business. The only thing you should follow is the rules and regulations to start up a company in Thailand. One can also overcome the challenges by hiring a legal advisor or seeking help from existing businesses. To make your business skyscraper, follow the steps and tips on how to start a business in Thailand.
• At last, one can only achieve something by doing it practically, not by thinking of it theoretically. So, don’t think more and start a business in Thailand now!

FAQ’s

How difficult is it to start a business in Thailand?

Starting a business in Thailand is neither too difficult nor a cup of tea. Every business involves some risk and capital. The same is the case in Thailand, the only different thing is to follow the registration process and legal complications. Also, the government provides some incentives to start. Thus, it is equally easy and equally difficult.

How much money do I need to start my business in Thailand?

To start a business in Thailand, a business owner has to invest is 50000 THB as an initial capital. Sometimes, the Thai government may help you with financial assistance and rebates. But the overall expenses can be a lot more. So, one should be ready with this small amount to invest. 

What does the company registration process involve in Thailand?

Registering a company is quite a lengthy process. This involves reserving a name, submitting documents, depositing initial capital, receiving the Tax Card, and applying for a work visa. The whole process may take 30 to 40 days.  

Are Foreigners allowed to start a business in Thailand?

Of course, foreigners have permission to start their business in Thailand. The only problem is that you cannot hold a 100% stake in your company. Only Thai and American citizens can have 100% ownership of a company. This means you should have Thai investors to start a business in Thailand.