Want to Know How to Start a Business in Thailand? Follow These 10 Steps
How to Start a Business in Thailand
If you want to know how to start a business in Thailand, you are not alone. Thailand provides a lot of opportunities for any start-up, especially a foreign company, to reap the rewards of doing business in this lucrative locale.
Plus, the country offers tax incentives for foreign investors that are too good to ignore. In addition, the country’s investment policies support free trade within the nation and with other countries. Thailand also continues to attract Foreign Direct Investment (FDI) interest from businesses throughout the world. The Board of Industries (BOI) gives companies incentives for their participation in the country’s business community. In fact, most sectors of the economy are open to foreign investment.
One of the Best Places to Start a Business
Thailand encourages all forms of investing. However, if your business offers a product or service that promotes innovation, technology, or skill building, it is looked upon with added favor. As of 2020, Thailand ranked number 1 on U.S. News and World’s report of one of the best places to start a business.
So, what do you need to do to start a business in Thailand? What steps do you need to take and how do you begin the process? The following 10 steps will help you realize your business investment dreams and goals.
1. Choose a Business Type
To start a business in Thailand, you first need to choose a business type. If your company does not go through the Board of Investment (BOI) program, your majority shareholders must be Thai citizens while 49% of the shareholders can be foreign nationals.
You can forego the minority percentage ownership requirement if you apply for a foreign business license or FBL. This license is usually given to foreign-owned companies that do not compete with Thai companies. The application for the license should be submitted to the Ministry of Commerce’s Foreign Licensing Department.
2. Review Thailand’s Foreign Business Act
Review Thailand’s Foreign Business Act so you know what types of business foreign companies cannot conduct. You need to review the law to see which businesses need approval and which businesses do not require approval to start a business in Thailand.
3. Learn More about the Benefits and Incentives Offered by the BOI
Because Thailand’s BOI drives investing in Thailand, you need to know what criteria you need to meet when working with the organization. The tax incentives include a corporate income tax exemption for as long as 13 years and a 50% corporate income tax reduction over a 5-year period, provided your company is located in a specific investment promotion zone. By participating with the BOI, you can start a business in Thailand that is completely foreign-owned.
4. Apply for a Work Permit and a Visa
If you wish to work in Thailand, you need to obtain a business visa. You can submit the application for the visa to the consulate in your country or to the Royal Thai Embassy. You may also want to check out the SMART Visa program, which is designed for entrepreneurs, skilled workers, and investors.
People who hold SMART visas may work in Thailand for up to 4 years and are exempt from obtaining work permits. SMART visa holders must work in industries, such as smart electronics, Next-Generation automotive, digital, agriculture and biotechnology, environmental management, medical and wellness, or tourism.
To file the SMART visa application, you should meet the same qualifications required by the BOI. After confirmation of your qualifications, you will receive a letter stating your qualification endorsement, which can be forwarded to your country’s consulate or the Royal Thai Embassy.
5. Register the Name of Your Country
Next, you will need to register your country’s name. This is done by applying to the Department of Business Development, then searching and registering your chosen business name. Print and sign a notice of reservation, which is good for 30 days.
6. Prepare the Documentation for Your Business
You will need legal assistance when preparing the paperwork for setting up your company. Depending on the type of business, you may need to draft a Memorandum of Association along with a listing of shareholders and directors, with each form signed by individual company directors. A Declaration of Business Operation form will need to be created if you have branches and offices.
7. Register the Company
Register your business at the Office of Business in the location where your company is based. During this step, you also will obtain a taxpayer I.D. While a private company can be registered in a week’s time, it takes about a month to register a public company.
8. Open a Business Bank Account
To start a business in Thailand and work legally in the country, you need a start-up capital of 2 million baht. This amount will allow you to receive 1 work permit. While opening a bank account is a fairly easy process, you need to seek loan funding, if you are a foreigner, through another channel.
9. Pay the Applicable Business Taxes
The Revenue Department in Thailand requires businesses to pay their corporate income tax (CIT) and file their tax return within a period of 150 days from the closing date of an accounting period. The average CIT in Thailand is 20% of a company’s net worth but will vary depending on the taxpayer’s status.
10. Learn the Culture and Language
To make your business work, you need to have some understanding of the Thai way of doing business as well as the language. Therefore, it may be a good idea to enroll at Chulalongkorn University’s Center for Thai as a Foreign Language (CTFL). It also helps to partner with a Thai business colleague who can serve as your mentor in learning more about the language and culture.
Do you want to know how to start a business in Thailand? If so, the above information can give you the basic information you need to be successful. You should also contact a legal representative who will guide you further in registering your new business and participating in business activities. You can make your dream control of owning a Thai business. You just need to align yourself with a good law firm and find mentors who can direct you on your journey.