How to do Business in Thailand
Doing business in Thailand is fairly straightforward so long as you follow the rules outlined by the necessary government departments. The domestic economy is thriving after recovering from the economic crisis and the country is now politically stable. Labour and land prices are still relatively low in comparison to many other countries in the region and being part of ASEAN and the AEC opens up the opportunity to do business with other countries in Southeast Asia. If you are interested in doing business in Thailand, read our guide on how to get started.
You and Your Business
We understand that not everyone wants work in Thailand but that doesn’t mean that they don’t want to invest in a business of their own. However, it is important they if you fall into this bracket you are still aware of the restrictions that are in place and take the appropriate legal advice. The same goes if you are planning to be self-employed or wanting to become an entrepreneur.
We strongly advise against setting up a “shell company” for the purpose of obtaining a long-term visa or to avoid the restrictions imposed on foreigners buying land or property in the Kingdom. In a similar manner to those working without a work permit, flouting the laws is a serious matter with some equally a serious consequences.
Starting Your Own Business in Thailand
The most common method of starting your own business in Thailand is by forming a Thai Private limited Company. This is ideal regardless of if you are planning to run a small business or a larger concern. This is the simplest way to get started but there are still a number of laws and requirements that need to adhered to before you get started. These include:
- All Thai companies need to have a minimum of three shareholders who will be known as “promoters”. 51% or more of the shareholders need to be Thai nationals unless the company has applied and received a Foreign Business Licence (FBL)
- Assuming that your business will be employing foreigners, the company will need to have THB2 million in registered share capital for each work permit that is applied for. There is a THB5,000 registration fee for each additional THB1 million of capital
- If you are requiring work permits, in most cases you will be required to employ four Thai nationals per work permit
- As in most countries, Articles of Association and Articles of Incorporation will need to be prepared in accordance with Thai Business Law. An inaugural meeting will also need to be held on formation that is attended by ALL shareholders
- Registering for tax is also a must. This must be done with 30 days of the company being formed. This will give the company a tax number which must be used on all invoices/receipts.
- It is essential that you conduct the correct monthly accounting. This will including accounting for VAT and Withholding Tax (WHT) and well as the necessary social security payments for employees. Annual accounts will also need to be prepared, audited and submitted to comply with Thai law.
Always Obtain Professional Advice When Commencing a Business
When you are starting a business for the first time in a different country it is always advisable to obtain advice from experienced professionals including lawyers and accountants. Doing business in Thailand may be very different to that in your home country so you need to be aware of all the necessary rules and regulations. Failure to conduct your business in the correct manner can have major implications, not least financially.
Of course, when you start a business you will need to obtain as much information about your business sector as possible. It is advisable to draw up a business plan using data collated in order to establish whether your business is feasible and financially viable. Seeking the advice of your Chamber of Commerce can be advantageous.
We always recommend that you never cut corners and do everything in the correct manner. This will give your business the best chance of achieving long-term success.