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How to start a business in Thailand
16/11/2023
Starting a business in Thailand can be a rewarding venture for entrepreneurs and international investors. The country offers a strategic location in Southeast Asia, a thriving startup ecosystem, and attractive business incentives.
In this blog post, we will provide you with step-by-step instructions on how to start a business in Thailand, from choosing the right type of company to registering your business and complying with legal requirements.
Key points
- In Thailand, companies can be 100% foreign-owned and are not required to have a Thai Partner.
- 100% Foreign ownership may be restricted for many business activities, and a Thai partner may be required.
- The Foreign Business Act specifies which business activities are open to 100% foreign ownership and which are restricted to Thai companies
- A BOI promotion removes many barriers to doing business in Thailand, such as the necessity of a Thai partner and the restrictions of the Foreign Business Act.
Why Start a Business in Thailand?
Thailand has long been recognized as an attractive business destination due to its strategic position in Southeast Asia. It serves as a gateway to other markets in the region and offers a well-connected transportation infrastructure.
Additionally, the startup and tech industry in Thailand is booming, with big corporations establishing accelerators to drive growth in various sectors such as e-commerce, medical technology, and financial technology. The country also offers ease of doing business, a vibrant community of startups and digital businesses, and the necessary infrastructure for company growth.
What should I consider when starting a company in Thailand?
Before starting a business in Thailand, it is important to determine the most suitable type of company for your venture.
Thai Limited Company
The most common choice for international investors is a Thai Limited Company. Under the Thai Civil and Commercial Code, companies can be 100% foreign-owned, depending on the type of business they want. The Foreign Business Act (FBA) controls foreign investment to protect Thai businesses. The FBA says which industries are open to foreign investment and what conditions they must follow. For about 50 types of businesses like services and consulting, foreign companies can’t own more than 49.99% unless they get a Foreign Business Licence or a BOI promotion, which allows 100% foreign ownership. So, in these cases, they’ll need a Thai partner to have the majority share.
Board of Investment (BOI) Promotion
When starting a business in Thailand, seeking a promotion from the Board of Investment (BOI) is strongly advised. The BOI’s primary objective as an official government entity is to draw in foreign investments by providing distinct advantages and perks not available to ordinary companies. These benefits include 100% foreign ownership, tax relief, simplified visa procedures, and additional privileges. Attaining a BOI promotion can significantly expedite an entrepreneur’s market entry into Thailand and establish an advantageous setting for conducting business. However, BOI promotions are only available for certain business activities.
Understanding Legal Requirements
It is essential to understand and comply with the legal requirements for how to start a business in Thailand. Here are some key points to consider:
Foreign Business Act
Familiarize yourself with Thailand’s Foreign Business Act, which outlines activities foreign companies are prohibited from conducting. The FBA restricts foreigners or foreign-owned companies from undertaking over 50 categories of business activities in Thailand.
For more information, please see our blog post on the subject here.
Thai Company Registration
Registering your company is a crucial step in starting a business in Thailand. You will need to reserve a company name, prepare necessary documents such as the Memorandum of Association and list of shareholders, and register the company at the Department of Business Development. More information can be found below.
Work Permits and Visas
Work permits and the correct visa type are required for any foreigner working or who intends to work in Thailand. Please note Thailand has a broad definition of work and employment, which isn’t linked to revenue or income. For example, a foreigner can be a shareholder and/or a company director and not require a work permit. However, should they do something such as sign a document on behalf of the company, this will be considered work and will be required to possess a work permit. To work in Thailand, you must apply for a Non-Immigrant ‘B’ or Business Visa and apply for a work permit upon entering Thailand.
Paid-Up Capital and Bank Account:
To legally work in Thailand, you may need to meet a minimum paid-up capital requirement. Opening a bank account with a commercial bank is also necessary.
What is the Process to Register a Business in Thailand?
Registering your business in Thailand involves several steps. Here’s a breakdown of the process:
Company Name Reservation: Reserve a unique company name through the Department of Business Development. This reservation is valid for 30 days. For more information, please see our blog post here.
Company Registered Address: A registered business address is where the company’s official documents, letters, and notices are sent. This address will act as the main point of contact for the government to contact the company for various legal and administrative matters. For more information, please click here.
Prepare Required Documents: Depending on the type of company, you will need to prepare application forms and various documents, including the Memorandum of Association, application forms, list of shareholders, director forms, and Declaration of Business Operation form.
Register the Company: Register your company at the Department of Business Development in the area where the company is located. You will also obtain a taxpayer identification number during this process.
Paid-Up Capital and Bank Account: Ensure you meet the minimum paid-up capital requirement and open a bank account with a commercial bank to transfer the money too. Typically, this is 50,000 THB, however, if you wish to hire foreign employees, you must have 2 Million THB.
Obtain Necessary Licenses: Depending on your business activities, you may need to obtain additional licenses such as a VAT registration or specific industry business licenses.
Comply with Tax Obligations: Familiarize yourself with the tax obligations and deadlines for filing tax returns. Seek the assistance of an accountant or tax professional to ensure compliance.
How can Belaws help?
For more information about how to start your small business in Thailand, why not talk to one of our experts now?
Please note that this article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of up to 1 hour and are conducted by expert Lawyers who are fluent in English, French and Thai.
Consultations can be hosted via WhatsApp or Video Conferencing software for your convenience. A consultation with one of our legal experts is undoubtedly the best way to get all the information you need and answer any questions you may have about your new business or project.
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Frequently asked questions
Can a foreigner start a business in Thailand?
Yes, foreigners can start a business in Thailand. In fact, the country is actively encouraging foreign investment. There are a few different ways for foreigners to start a business in Thailand, but the most common is to register a Thai Limited Company. Thai Limited Companies can be 100% foreign-owned, depending on the type of business.
How much does it cost to start a business in Thailand?
The cost of starting a business in Thailand varies depending on the type of company you are registering and the complexity of your business. However, in general, you can expect to pay around THB 50,000 (USD 1,500) to start a business in Thailand. This includes the cost of registering your company, opening a bank account, and obtaining the necessary licenses and permits.
What are the most profitable businesses in Thailand?
The most profitable businesses in Thailand vary depending on the current market conditions and economic trends. However, some of the most consistently profitable sectors in Thailand include:
- Tourism and hospitality
- Agriculture and food processing
- Manufacturing
- Information technology and telecommunications
- Retail and wholesale trade
Can a foreigner own 100% of a Thai company?
Yes, under the Thai Civil and Commercial Code, it’s possible for foreigners to own 100% of certain types of companies. However, the Foreign Business Act (FBA) restricts this for some industries like services and consulting. In these cases, a Thai partner or a BOI promotion (allowing 100% ownership) is needed.
Is Thailand a good place to start a business?
Yes, Thailand offers advantages like a strategic location in Southeast Asia, a vibrant startup ecosystem, and ease of doing business. However, challenges like the FBA restrictions and cultural differences must be considered.
Is it hard to do business in Thailand?
The difficulty depends on your business type and experience. Navigating legal requirements and the FBA can be complex. Seeking help from professionals is recommended.
Is Thailand a good place to do international business?
Absolutely! Thailand’s central location and well-connected transport infrastructure make it an ideal gateway to regional markets.
What can a foreigner own in Thailand?
Foreigners can own 100% of businesses not restricted by the FBA, like manufacturing or technology. In restricted sectors, they can still own through partnerships or BOI promotions. Land ownership may require specific visas or BOI privileges.
How much does it cost to start a business in Thailand?
Costs vary depending on factors like company type, legal fees, and licensing. Government fees range from around 5,000 to 250,000 Baht. Professional services can add 30,000 to 100,000 Baht.
How to open Small business in Thailand for foreigners?
Several industries are suited for foreigners, like e-commerce, tourism, or technology. Consider online businesses with minimal physical presence to simplify visa and permit requirements.
What is Foreign Business Act Thailand?
The FBA outlines limitations on foreign ownership in certain business sectors. Understanding these restrictions is crucial before starting a business in Thailand.
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