Thailand is a good destination for investment and business. The country’s party culture has been attributed to the millions of foreigners that visit it every year for vacation. They spend a lot of foreign currency during their time in Thailand. Furthermore, it has a beautiful scenery and environment to live in, coupled with low cost of living.
When launching a Thai business, be prepared to commit. With a proper plan, you can setup a successful business. However, you must do your homework first before launching a business. Moreover, you must also be prepared to live in Thailand for the first few years of starting your business until it stabilizes.
Due to the lucrative nature of doing business in Thailand, many businesses are increasingly registered. Many foreigners either start their Thai businesses or grow their existing company into the country for investment purposes.
You must know how your business is classified in Thailand, details about foreigners investing in the country, legal processes and the authority tasked with registering Thai businesses. Here’s a guide to help you setup your business in Thailand.
Who will be the Shareholders?
(Foreigners will affect required registered capital depending on what visa they require)
You can incorporate your business as a limited company. It’s the most popular way to form a Thai business, but foreign shares ownership is limited to 49%, leaving 51% for Thai shareholders. Board of Investment (BOI) is the key to 100% foreign share ownership.
However, a business must be eligible to qualify; your business must meet requirements for the category. Eligible existing businesses can also be promoted to the BOI category. But, the process is time-consuming and sophisticated.
Sole proprietorship is also an option, but incorporating the business can be difficult for foreigners. Business partnerships are also available in the form of unregistered and registered ordinary partnership and limited partnerships. Although partnerships are easy to register, foreigners can’t open bank accounts using the business name, and can’t be given work permits.
If you meet the requirements for a desired business category, and have all the required documents ready, the Department of Business Development under Thai’s Ministry of Commercewill register your business.
What is the Nature of the Business?
(Application needs to detail what you will do, plus some businesses require additional licenses)
Do some research to find your business niche. Don’t go with the flow or opt for shortcuts when choosing what you want your business to do. A market research will help you find a suitable business niche. Take time to live in Thailand to enable you study the local Thai market.
Consider learning Thai and immerse yourself in the community. Study competitors in your potential niche. Find a gap in the market that needs to be filled. Talk to competitors and other business owners to get a feel of the Thai market and specific industry of your liking.
Assess the need for an online presence and likely challenges your business is bound to face. Choose a niche in something you can do or you’re passionate about. And, make sure you choose a niche and determine how you intend to differentiate you brand to draw more customers.
When picking a business niche, check out local requirements for that specific business category. Note that some businesses require more licenses than others. Keep that in mind when deciding what you want your business to do.
Where Will Your Business be Located?
(Need to register in the right province, plus need registered address and suitable workplace)
Choose a Thai location with fast growth that’ll enable your business to grow. Setting up your business would be the most challenging aspect of starting your Thai business because it’s full of legal hassles. Choose a unique name for your company and prepare registration documents, including meeting notes, a registered address, list of shareholders and proof that you’ve paid the share capital.
Register your company with the Department of Business Development. Next, register for a VAT and get your business licenses. Find out the licenses your business requires. For instance, a restaurant requires liquor, music and VAT licenses. They take about 10, 45 and 15 days, respectively to acquire. VAT would only be applicable if your business generates at least 1.8 million baht in revenues annually.
Consider hiring a professional accounting firm to help with securing licenses and preparing required documents. Make sure you apply your licenses early so that in case they delay, you’re still able to launch your business as scheduled.
Choose between traditional and serviced office spaces for your business. Serviced offices are already setup and ready for use. You simply sign a contract and bring your laptop to start working. Regus is an ideal option for serviced office spaced throughout Thailand. Traditional offices are more cost-effective if your office is attached to your business.
Next, apply for business visas and work permits. You can find agents in Malaysia that can help with your visa applications because they’re limited in Thailand. Check local Thai requirements to get a work permit. For each work permit, you must have four local Thai employees and two million baht as capital.
Work Out Your Business Plan
(Get an idea of expected costs, expenses, staff and capital needed)
Find a Thai partner and define your business goals. Determine the amount of capital you need to start your business. Define a budget for staff and partner salaries, rent and other expenses, including utilities. Develop a budget to help you work out a plan.
Make sure you have enough money to cover these costs for at least a year as you establish your business and give it time to grow and flourish.