Starting a Business in Thailand: A General Overview
In the past year, the economy of Thailand has been steadily rising and recovering from the pandemic. As a result, it’s now considered one of the best countries globally for starting a business, whether you’re a local citizen or a foreign investor.
For a variety of reasons, The Kingdom of Thailand is a strategic investment opportunity in Southeast Asia. In this blog post, we’ll cover the steps you can follow when starting a business in this exciting country.
Why Start a Business in Thailand?
The Land of Smiles could very well be the gateway to other destinations in the world or at least within the touristy region of Southeast Asia.
Any big businesses worth their salt would look into establishing a branch or company in Thailand. It’s because the country is filled with tech industries and startups galore.
What’s more, Thailand is in a strategic location as far as interested investors and entrepreneurs are concerned. It has also developed sufficiently to have the required infrastructure necessary for business growth in the 2020s.
You can start multiple business types in the country. You have to choose which business type you should set up in Thailand, though.
What is BOI Approval in Thailand?
The BOI or the Thai Board of Investment offers companies various privileges and advantages, thus acquiring BOI approval might be in your best interests.
Chief among these benefits include reduced requirements for acquiring a BOI Visa and Work Permit if you’re a foreigner. As for a BOI-approved company, it involves applying for a Thailand business visa along with a work permit.
Those two documents are essential to starting your business and relocating it in Thailand. However, to apply and obtain a BOI work permit, you need to understand the Foreign Business Act of Thailand first.
Thailand BOI Benefits and Incentives
A Thailand business must meet certain qualifications or requirements in order to benefit from a scheme designed to incentivize investors to invest in Thailand.
The BOI from Thailand offers tax incentives specifically which includes a 13-year exemption from corporate income tax. Moreover, it also offers a 5-year, 50 percent reduction of corporate income tax, which is only available in special investment promotional zones.
What is a Foreign Business License?
A Foreign Business License (FBL) allows you exemption from the minority share of ownership rule. The FBL license is offered to foreign-owned companies that don’t compete with local businesses in Thailand.
To get this license, you’ll have to register and wait for a few months to get the Foreign Licensing Department to issue you one.
To get your Thai business going, you must know the business types allowed in the country. They include the following.
- Thai Limited Company
- Thai Representative Office or Branch Office
- Thai Partnership or Limited Thai Partnership
The most popular business type in the country is the Thai Limited Company or Private Limited Company. This company type has directors with unlimited liabilities and shareholders with limited liabilities.
What is a Thai Limited Company?
A Thai Limited Company is one of the best business types to establish in Thailand. It requires 3 local shareholders with a 51 percent hold of the shares in order to have the company get registered in Thailand.
Further requirements of the Private Limited Company include the following.
- 1 auditor
- At least 1 director
- A statutory meeting
- A memorandum of association
- At least 2 shareholders overall, with at least 51 percent of shares held by a Thai shareholder.
- Registration of the incorporation papers
- Get an Income Tax Registration ID number
Auditors must be hired for registered companies because they’re tasked to audit their financial statements annually. The auditor must specifically file audit report submissions to the Thai Revenue Department once a year.
Registering Your Business in Thailand
A business must be registered before obtaining a business visa. Registering your business in Thailand first requires a name search. Do this search by creating an account online. The registration process for your company is the same for almost all Thai startups.
- First, you need to do a Company Name Search.
- Once it’s established that your company name is unique, you need to get that company name registered.
- From there, prepare and submit your Memorandum of Association.
- You will then need to also prepare and submit your Article of Association.
- Afterwards, arrange a Statutory Meeting.
- After the meeting is concluded, submit the rest of the required documents to complete the company registration process.
- You’ll also need to register for Tax or VAT.
The Different Types of Business Visa Available
The Business Visa or VISA was designed specifically for those who wish to work or do business legally in Thailand. It’s also known as the Non-Immigrant Visa.
You can open a bank account or acquire a work permit using this visa as well. The visa can be extended annually along with your work permit as long as the business or your employment still exists.
What is Thailand’s Foreign Business Act?
The Foreign Business Act (FBA) exists to keep foreign businesses and entrepreneurs (even Thai individuals working for the foreign business) from going about consulting, retail, and wholesale services in Thailand.
The FBA specifically prohibits foreigners from engaging in most business categories within Thailand.
The exception to this rule is when the company obtains a permit from the Director-General of the Department of Commercial Registration that has been approved by the Foreign Business Committee.
How to Acquire a Visa for Your Thailand Business
To create a Thai startup, you must acquire a valid permit. This permit, in turn, requires a Non-Immigrant “B” or Business Visa to allow you to legally run your company in the country.
You should proceed to the Royal Thai Embassy and submit an application for this specific visa in order to get it. There are three business visa types.
Single-Entry Visa: The fee for a single-entry visa is ฿2,000. It remains valid for three months.
Multiple-Entries Visa: The fee for the visa for multiple entries is ฿5,000. This visa type remains valid for a whole year.
SMART Visa: The SMART Visa Program is a relatively new program targeted at investors. It permits them to stay for 4 years and exempts them from work permit requirements.
You need qualifications to apply for a SMART visa. Once you meet them, you can apply for the visa at the Royal Thai Embassy.
Who is Eligible for a Thailand SMART Visa?
A startup entrepreneur, executive, investor, or highly skilled worker in the following industries are all eligible for a SMART visa.
- Digital
- Medical Hub
- Smart Electronics
- Food for the Future
- Aviation and Logistics
- Automation and Robotics
- Biofuels and Biochemicals
- Next-Generation Automotive
- Agriculture and Biotechnology
- Alternative Dispute Resolution
- Affluent, Medical and Wellness Tourism
- Environmental Management and Renewable Energy
- Human Resource Development in Science and Technology
Every specific type of SMART visa also has its own respective requirements in turn.
What are the Different Types of Thailand SMART Visas?
The different SMART Visa categories in Thailand are as follows:
SMART Visa “T”: They’re SMART visas reserved for foreign Talents.
SMART Visa “I”: They’re SMART visas reserved for foreign Investors.
SMART Visa “E”: They’re SMART visas reserved for foreign Executives.
SMART Visa “S”: They’re SMART visas reserved for foreign technology-based startup Entrepreneurs.
SMART Visa “O”: They’re SMART visas reserved for Others involved with the SMART visa holders, such as the family members—dependents such as the spouse and children—of one of the main visa owners outlined above.
How to Get Work Permit for Your Thailand Business
You should obtain the Non-Immigrant Visa before entering the Kingdom of Thailand. After acquiring the visa, you can start the process of applying for a work permit in turn from the Ministry of Labor’s local branch office.
It takes about a week or 7 days to complete the work permit application process. Work permit application eligibility requires foreigners to first get the Non-Immigrant Visa or a Resident Visa.
If you’re a worker, you need to get your employer to provide documents for your work permit. Also, the industry you intend to work in should not be part of the restricted list of occupations prohibited to foreigners at that.
What are the Occupations Prohibited for Foreigners to Enter in Thailand?
Here are the following restricted industries for foreigners to enter in Thailand.
- Auction
- Peddling
- Thai massage
- Wood carving
- Thai dolls making
- Alms bowl making
- Nielloware making
- Bronze ware making
- Lacquerware making
- Cloth weaving by hand
- Buddha images making
- Cigarette rolling by hand
- Clerical or secretarial work
- Silk products making by hand
- Paper or cloth umbrella making
- Mulberry paper making by hand
- Silk reeling and twisting by hand
- Making Thai musical instruments
- Manual typesetting of Thai characters
- Tour guide or sightseeing tour operation
- Haircutting, hairdressing, or beauty treatment
- Making pink gold, silverware, or gold ornaments
- Polishing or cutting diamond and other precious stones
- Agency or brokerage work, except for work involved in international investment or trade
- Driving the following:
○ Motor vehicles
○ A non-mechanically propelled carrier
○ A domestic mechanically propelled carrier
○ There are exceptions for forklift driving or piloting international aircraft - Legal services or legal proceedings services, except for the following endeavors:
○ Performing duties of arbitration
○ Providing representation or assistance in the arbitral proceedings when the law applicable to the dispute being considered by the arbitrators is not the Thai law - Mat weaving or utensil making from materials such as:
○ Wire
○ Fiber
○ Grass
○ Reeds
○ Hemp
○ Straw
○ Rattan
○ Bamboo
○ Chicken feather
○ Bamboo pellicle
○ Coconut leaf stick
Paid-Up Capital and Bank Account
฿2 million is the minimum paid-up capital you need to get a permit to legally work in Thailand. This gets you a single work permit. As for opening a Thai bank account, it’s a relatively straightforward process as well.
It involves going to the bank teller of a commercial bank and inquiring about opening your account. The teller will guide you through the entire process.
However, if your company requires taking loans from Thai banks, you will face some hurdles along the way when compared to getting loans from banks in your own native country.
Actually, availing bank loans from your locality is hard enough, but it becomes extra hard as a foreigner who’s starting a business in Thailand.
Tax and Fees in Thailand
After successfully registering your company, it must also register for VAT and tax within 60 days or 2 months of incorporation.
The Thailand Revenue Board is the one that issues your corporate tax ID. You can do the whole process online for convenience’s sake.
| Item | Thai Government Fees | Stamp Duty |
| Company Name Registration | Free of Charge | ฿10 |
| Statutory Meeting | Free of Charge | NIL |
| Company Registration | ฿5,000 to ฿250,000 per million baht of Capital | Maximum ฿400 |
| Registration for Tax ID | Free of Charge | ฿10 |
| Filling MOA | ฿50 per ฿100,000 of Capital or ฿500 per ฿250,000 | Maximum ฿200 |
| VAT Registration | Free of Charge | ฿10 |
Finishing Up
Thailand’s economy is rising at a promising rate, making it one of the new tiger economies of Asia at the time of writing. It certainly helps that it also has a robust tourist economy as well as medical tourism.
This makes it one of the best places to start a business, since it’s full of business opportunities with its strategic location and GDP growth.
It’s now known both as one of Asia’s top business startup locations as well as tourist destinations par excellence. Its potential is limitless.
Also, the Thai government offers a multitude of benefits and incentives for foreign investors and entrepreneurs to start a business in their country. Go ahead. Take the plunge and start your own Thai business today!
The Importance of Legal Counsel for Starting a Business
When starting a business in Thailand or elsewhere, it’s vital to have legal guidance and counsel available. For one thing, they ensure you have proper Business Entity setup and all Visa requirements acquired.
Furthermore, legal consultation provides you with legal advice that covers both legislative concerns and paperwork, thus making it easier for you to do business in the country. This is especially true of foreigners.
Umpire Legal makes starting and doing business in Thailand easier and safer. Get in touch with us today to get a jumpstart on establishing your Thai business.
Umpire Legal makes starting and doing business in Thailand easier and safer. Get in touch today to get a jumpstart on establishing your Thai business.