Thailand has been welcoming and friendly to foreigners doing business there. Some businesses could perform well in the Thai market, but others failed. To do business in Thailand, one should not only set up a company for business operations; there are also many aspects, like legal, culture, market, and so on.
To start business in Thailand, Bangkok Business Lawyer has identified seven important steps that should be considered before entering to do business in Thailand as followings;
Step 1: Business and legal study
Each country has its own laws and rules, and it is no different here in Thailand. Thai law preserves certain businesses and careers for Thai people while also allowing and supporting foreigners to conduct business. It is considered a foreign business license (FBL). If the business meets FBL’s requirements, it can register as a foreign company in Thailand.
The Thai government encourages and stimulates some type of business that is known as the Board of Investment, Thailand (BOI). Both Thais and foreigners can greatly benefit from the tax and visa benefits of working in Thailand if the business or project can meet the requirements. In this BOI scheme, it is primarily businesses that can drive Thailand to be a more competitive country.
As a first step, consider the potential for how businesses can survive and succeed in Thailand on the legal side. It is necessary to study the market in terms of location, pricing, and potential customer size. A good and successful business in one country may not be successful in another country. In certain instances, a robust business model may not succeed in the market due to its incompatibility with consumer behavior. We recommend ensuring that the legal and business models align with Thai law and the market at this stage.
Step 2: Company structure and registrations
Of course, to start a business, a company must be registered. A Thai company must have more shares, or shares, that belong to a Thai person. A Thai company can do most of its business under Thai law, and to establish a company, it is required to have at least two persons. A foreigner can be one of the shareholders with less than 49 percent of the total shares. If a foreign investor is required to contribute capital, we recommend registering at least 2 million Baht in capital.
For a good company structure, it is essential to have a well-structured plan, as the company can register the objectives of conducting business, company resolution, and company director, which will avoid problems like conducting business for different objectives of the company.
Step 3: Tax and accounting planning
Misconduct in tax and accounting can result in a great fine or even jail time. When operating a business and generating revenue exceeding 1.8 million Baht, a value-added tax (VAT) must be registered. The company is responsible for paying annual tax and accounting audits by licensed auditors.
According to Thai tax law, accounting and bookkeeping must estimate the workload and income estimation for forecasting the tax, and in business, accounting and tax planners have to evaluate what inventory is, what the actual revenue is to report as income, and how to apply VAT.
Step 4: Business license and local authority
Before operating a business, it is necessary to get a business license ready. If you fail to obtain a business license, you could face serious consequences. Not only large businesses may face problems, but small businesses can also. For example, when opening a restaurant, you must have a restaurant license and report to the local authority.
Step 5: Long term Visa and work permit
Most foreigners who wish to do business in Thailand do so because they want to live there. A non-B type of visa is the only one that allows you to work in Thailand. A Thai company must employ you to qualify for a non-B visa. The company must submit a request to hire foreigners to work for it. The requirement for submitting a request for a work permit for a foreigner is that the company must register a capital of at least 2 million Baht per work permit, and the company must hire at least 4 Thai people with a standard salary.
Step 6: Setting up the operation structure and hiring employees
Different workplace cultures can lead to problems and business failure. People from different countries have different attitudes and mindsets. Thai people can do a great job in the hospitality and service business, but they also value flexibility. So, understanding local culture and setting up a suitable operation structure in a localized and friendly environment can greatly benefit your business.
Step 7: Marketing in the Thai market
Marketing is a way to keep businesses growing and going. To do marketing in Thailand, first, it is important to identify who will be the target customer. Thailand has a domestic market and an international market, as Thailand is a world destination with all-year-round good weather, beaches, good foods, and so on. If you are focusing on the Thai domestic market, you need to be concerned about age group, spending capacity, culture, and media consumption. A new generation in Thailand is now open to technology, using many social media sites but not Facebook, and becoming more of an influencer on social media.
Do not hesitate to contact us if you are foreigners interested in conducting business in Thailand. We are an all-in-one location offering business and legal assistance. We are ready to assist you. Feel free to reach out to us at contact@bangkokbusinesslawyer.com.
