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Thailand is a reasonably favourable country in which to set up a company or expand an existing business. Things have become more difficult since the coup in 2014. The current political instability in Thailand makes any large investment somewhat risky.
The country is now ranked 49th out of 189 countries on the World Bank’s Ease of Doing Business rankings. Moreover, for starting a business, Thailand was ranked a mediocre 96th. Hence, for best results, make sure to do thorough research and start planning well in advance!
Nevertheless, starting a business in Thailand is quite a popular option due to low cost and lack of restrictions on business operations – though some industrial sectors are forbidden. There are also some local peculiarities: companies providing goods and services many not be majority foreign-owned: non-Thai shares are limited to 49%. There are some exceptions, such as treaty companies, particularly US-owned ones.
Before you can start your own business in Thailand, you need to ensure you have the legal right to live and work in the country. Normally you will need to acquire a non-immigrant visa (business subclass) and have submitted a work permit application beefore you can operate a business in the country. For more information on non-immigrant visas and immigrating into Thailand in general, see our Immigration section.
To help prepare for the launch of your business into the competitive Thai market, it is essential to create a high-quality business plan. First, make sure you have a clear view of what it is you want to do, and how feasible as business idea this is. You will need to research related businesses that already operate in the local area and determine your potential customers and partners. Additionally, you should think through your best financing options at this point.
Once you have completed your research, you should be able to fill out a business plan to around 3-5 pages. This should set out your business objectives, target market and commercial strategy, and include financial projections and potential obstacles.
Another important step is to decide which legal structure your business will adopt. A legal structure determines the benefits you enjoy and the nature of your legal, financial and tax obligations. Thai business structures are similar to most international ones, so they may be familiar. The most common business types in Thailand are sole proprietor, partnership and private limited company.
The advantage of setting up your business as a self-employed person is that it is cheap and easy to set up. Furthermore, you have full ownership and control over the business, and that all after-tax profits are yours. On the other hand, you are personally liable for all the losses your business makes, and have additional responsibilities, such as keeping business records. Be aware that there is a considerable failure rate for this kind of buasiness in Thailand.
According to Thai law, there are three types of business partnership: ordinary partnerships (which can either be registered or not) and limited partnerships (which must be registered). If registered, an ordinary partnership is a separate legal entity, otherwise, the partners are fully liable for any debts the business may incur. In a limited partnership, the amount of liabilty is limited to the initial capital contribution.
The private limited company, similar to a Western coroporation, is the most popular legal structure among expats. To open one, you first need to make an investment of at least 2 milllion baht (or 1 million if your spouse is a Thai citizen.) In addition, there is a registration fee of 5,500 baht per million baht the company has in capital.
Another legal structure in Thailand is the joint venture . This is an agreement, formulated between at least two companies, creating a single entity for some purposes. This is particularly used by foreign companies who want to work in tandem with local ones. More information about these business structures can be found on the Thai Embassy website.
Once the above stages are complete, you should be ready to set up your company. At this point you should consider hiring a lawyer and accountant, as they will be able to guide you through the rest of company setup and registration.
You will need to file a memorandum of association, hold a statutory meeting and register your business with the Thailand Board of Investment.Next, all businesses have to apply for an income tax ID card. To read more about tax for expats in Thailand, see Taxation.
If you want to employ someone (including yourself) to work in your business you will have to register as an employer. As an employer, you will have to ensure that your business complies with Thai labour regulations. You should familiarise yourself with different types of contracts, minimum wage requirements, equal opportunity policies, work permits, insurance payments and recruitment options. Note that if you employ freelance workers, you will not have so many legal obligations as they will be liable to pay their own tax and insurance.
Sections in EMPLOYMENT AND BUSINESS IN THAILAND:
» Finding a Job, CVs, Interviews and Etiquette for Expats in Thailand
» Work Culture and Labour Market for Expats in Thailand
» Expats Owning and Operating a Business in Thailand
» Business Groups, Associations and Networking for Expats in Thailand
» Business Taxation for Expats in Thailand
We value input from our readers. If you spot an error on this page or have any suggestions, please let us know.
If you are considering moving to Thailand or are soon to depart, you can find helpful information and advice in the Expat Briefing dedicated Thailand section including; details of immigration and visas, Thai forums, Thai event listings and service providers in Thailand.
From your safety to shopping, living in Thailand can yield great benefits as well as occasional drawbacks. Find your feet and stay abreast of the latest developments affecting expats in Thailand with relevant news and up-to-date information.
Working in Thailand can be rewarding as well as stressful, if you don't plan ahead and fulfill any legal requirements. Find out about visas and passports, owning and operating a company in Thailand, and general Thai culture of the labour market.
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