Everything you wanted to know about starting a business in Thailand

Choosing the Right Business Entity

Before you begin your business, pick the best type of business structure for your venture. You can choose from options like being the sole owner, partnering with others, forming a limited company, and more. Your decision will influence important things like your responsibility for debts, taxes, and the rules you need to follow.

When you're starting a business in Thailand, it's important to involve a Thai partner. This partner can help with taxes, sharing profits, and even owning property.  However, this doesn't mean that foreigners cannot do it independently. The rules and regulations, though, are distinct and rather intricate, and the fees tend to be higher compared to establishing a regular company. So, selecting the right way to organize your business is just as important as choosing what kind of business you want to run.

Finding a Thai Partner

Finding a Thai partner can be important when you want to start a business in Thailand. Sometimes, Thai laws say you must work with a local partner. Teaming up with a Thai person can bring benefits, like these:

Legal Requirement: In certain cases, Thai law might make it necessary for foreigners to partner with a local Thai person to create and run a business in Thailand. This rule aims to encourage foreign investment and working together with local businesses, which helps the local economy.

Insights and Connections: When you partner with a Thai national, you get more than just following the rules. They can tell you about how business works in Thailand, what people like to buy, and the special rules you need to follow. They're familiar with the details of doing business in Thailand, which can be super helpful if you're new to the place.

Access to Local Market: Thai partners often know lots of people in the local market. This can help your business make friends with suppliers, customers, and other important folks more easily. It also makes dealing with government rules and processes less of a hassle.

Cultural Understanding: Knowing the local culture is really important for a business to do well. A Thai partner can teach you things you can't find in books or online. This knowledge can be a big help with marketing, talking to customers, and everyday business.

Language Barrier: Speaking the local language is a big deal when you're doing business in another country. A Thai partner who speaks both Thai and the language used in your business can help you talk to people and get things done more easily.

Registering Your Business

The process of registering your business in Thailand can vary depending on the business structure you choose. It's essential to understand the legal requirements, which may involve obtaining a business license and registering for taxes. The total period is approximately 3-6 months or more, depending on the readiness of the company and the consideration queue for approval and issuance of licenses by the committee.

For this reason, foreigners who wish to establish a company in Thailand and own 50% or more shares, especially if it's a manufacturing business aimed at selling products within the country or exporting abroad, can hold 100% of the company's shares. However, the minimum registered capital must be at least 2 million baht, and in cases where the registered capital exceeds 5 million baht, specific rules apply.

Opening a Bank Account

After successfully registering your business, you'll need a local bank account to manage financial transactions. You should be prepared to provide the necessary documents, typically including your business registration certificate and proof of your address.

The company directors are required to open a bank account in Thailand and deposit an amount equal to the paid-up registered capital. Within 15 days of the company registration date, they should obtain a deposit certificate from the bank and submit it to the Department of Business Development. To open a business account, an authorized director must personally visit the bank.

For businesses that are not manufacturing plants and fall under the promotion of investment by the Board of Investment (BOI), you can request permission through the BOI, a process that usually takes about 4-6 months for BOI to consider. Alternatively, you can request a Foreign Business License (FBL) through the Department of Business Development, Foreign Affairs Division.

If the business that foreigners wish to engage in is on the prohibited list, they are not allowed to do it, and thus, they cannot request an FBL. However, for businesses open to foreign ownership, you can apply for an FBL. Approval or rejection depends on the discretion of the committee that evaluates foreign business licenses. The process of requesting and considering an FBL typically takes about 4-6 months.

Finding an Office Space

After you have completed the extensive legal procedures and paperwork and everything is in order for starting a business, the next crucial step is finding the right location. Securing an office space in Thailand depends on your specific needs and budget. Options range from co-working spaces to dedicated offices. Consider factors like location, accessibility, and facilities when making your choice. 

If your business isn't large or is related to food services, it's essential to look for a spot close to residential areas and with good transportation access. On the other hand, if you plan to establish a factory for manufacturing specific products, you'll need to carefully weigh the options of renting or buying property in that area. These details can be intricate and require a deeper dive. If you're considering any of these options, it's highly recommended that you consult with Thai Kru. This ensures you don't overlook important matters that are vital for commencing a business in Thailand.

Hiring Staff

Thailand has a diverse labor market with a range of skills and experience levels. Depending on your business's needs, you can find employees with various qualifications and expertise, from entry-level workers to highly skilled professionals. Plus, Thailand has specific labor laws that you need to comply with when hiring and managing your workforce. These laws cover aspects such as working hours, minimum wage, employment contracts, and termination procedures. Understanding and adhering to these labor laws is essential to avoid legal issues and ensure fair treatment of your employees.

However, if you plan to hire foreign employees for your business in Thailand, you'll need to obtain the necessary work permits for them. The process for obtaining work permits for foreign staff can be somewhat complex, and it's important to ensure that all legal requirements are met to avoid potential legal complications.

Marketing Your Business

Once the essential preparations are in place, the business is ready, and the employees are prepared, you can initiate the process of opening the business. An essential aspect of running a business involves informing customers about your products or services, your location, and how they can contact you. This is where a marketing plan becomes crucial when starting a business, whether through in-person interactions or online marketing. Making people aware of your business's presence is vital. When customers choose to return to make repeat purchases, it's like a bonus that can contribute to your business's success. Therefore, understanding the cultural nuances and preferences of your target audience is essential for effective marketing.

Comparing with Starting a Business in the UK and Beyond

Starting a business in Thailand and the UK involves common steps like choosing a business structure and navigating regulatory processes, but there are key differences to consider. In Thailand, you have diverse business structures and unique legal and tax frameworks, and understanding the local culture and language may be crucial. The UK, on the other hand, offers distinct regulatory processes and market dynamics. Both countries offer access to different markets, with the UK providing a gateway to the European Union, and Thailand serving as a gateway to Southeast Asia. The ease of doing business, access to markets, and cultural factors can all vary, making it essential for entrepreneurs to carefully assess these variations and seek local expertise and advice for a successful start.

Starting a business in Thailand offers exciting opportunities for entrepreneurs. Understanding the local business landscape and following the legal procedures are essential for a smooth launch. Whether you're looking to set up shop in Thailand or elsewhere, researching and preparing for each step will significantly increase your chances of success in the competitive world of business. Starting a business in Thailand can be a multi-step process with sometimes lengthy waiting periods. The complexity of the required documentation to express your intent to begin a business in your dream destination can be daunting. Thai Kru is always available to assist you, and we invite your trust in our services. Thai Kru is fully prepared to support the realization of your dream business in the "Land of Smiles”.