Business opportunities in Thailand
The advantages of doing business in Thailand are immense as it stands at the center of the ASEAN Economic Community. Moreover, it has a significant trade spotlight as it is one of the top 3 bases in ASEAN. Despite having suffered setbacks due to COVID-19, Thailand pushed itself. As of 2021, Thailand’s top 10 trading partners are India, Singapore, Indonesia, Australia, Vietnam, Malaysia, the USA, Japan, Hong Kong, Australia, and China.
The digital infrastructure of Thailand is also remarkable as it is structured around four main objectives: economic prosperity, social well-being, raising human values, and protecting the environment. To top it all off, the Thai government is also currently working on developing the Eastern Economic Corridor (EEC) to become the ASEAN leading economic zone.
Some industries with great business opportunities in Thailand are:
- Aerospace industry
- Bio-plastics industry
- Machinery Industry
- Textile Industry
- Food Industry
- Rubber Industry
- Automation and Robotics
- Electric Vehicle Services
- Digital and Creative Startup
Benefits of starting a business in Thailand
- Strategic location
- Tax incentives from the BOI
- A competent and talented pool of employees
- Affordable workforce
- Easy to set up a regional head office system
- Company incorporation Thailand system is easy to navigate
Requirements for starting a business in Thailand
All foreign business in Thailand is governed by the Foreign Business Act of 1999. All foreign business owners need to set up a company in Thailand. Non-adherence can lead to strict penalties of between 100,000b-1,000,000 Baht. The following requirements are essential to set up a business in Thailand-
To work in Thailand as a foreign national or undertake investment within Thailand, you must apply for a business visa. Once issued a business visa, you can work within Thailand. The application for the Thailand Business Visa can be submitted at Royal Thai Embassy or consulate in your home country.
The visa fee varies depending on the entries it permits. Single entry visas can go up to 2,000 Baht with a validity period of three months. At the same time, multiple entry visas can go up to 5,000 Baht with a validity period of one year.
When on a multiple-entry visa, you will be required to report your status every time you leave or enter the country. When entering a single-entry Thai business visa, the visa will be void as soon as you leave the country. You can, however, apply for extending your visa from within Thailand.
The several categories of Thai Business Visa are:
- Non-Immigrant B Visa (Business Visa): This is for foreign nationals who wish to conduct business in Thailand or those who want to apply for a work permit.
- Non-Immigrant B-A Visa (Business Approved Visa): This is for those who wish to start a business in Thailand and invest in a Thai Business.
- Non-Immigrant IB Visa (Investment and Business Visa): This is for foreign nationals working on investment projects under the auspices of the Board of Investment of Thailand (BOI).
- Non-Immigrant B (Teaching Visa): This is for foreign nationals who want to work in Thailand as a schoolteacher.
Registering your company
If you want to start a business in Thailand, reserving a company name is the first and the most crucial step. You can open an online account with Thailand’s Department of Business Development.
What follows is a complex step where you must prepare all the necessary documents like MOA, application form and list of shareholders, director forms signed by each director of the company, declaration of business operation form, details of the company office, address, etc. You will also be required to use your company stamp while signing all the relevant documents.
Directors and company secretary
Both private and public companies are not required to appoint an official company secretary or director. But, it is recommended for companies to appoint a director or secretary to oversee their activities.
If you want to work in Thailand and start your own business, the smallest paid-up capital is 2 million Baht. It will allow your company to have one work permit. Opening a bank account with commercial banks in Thailand is not very complicated. But, it might not be easy to avail of loans from local bank accounts in Thailand.
As soon as your business starts operating, you must pay taxes. According to the Revenue department, all companies must pay corporate income tax and file their tax return within 150 days from the closing date of their accounting period.
Types of business structures in Thailand
Before starting a business in Thailand, you must consider which company structure best suits your requirements. The available business structures you can choose from in Thailand are:
One single person owns this. However, professions like banking and finance are prohibited from working as a sole proprietorships in Thailand. Only limited companies can do this type of work.
You can again choose from three common types of partnerships in Thailand.
- Unregistered ordinary partnerships where all partners are liable for all association debts.
- Registered ordinary partnerships where partnerships become legal entities.
- Limited partnerships where the liability of each partner is restricted to the amount of capital they invested.
In a joint venture, people agree to carry a business together. Although the company is not recognized as a legal entity, the income from the business is subject to corporate taxation.
There are two types of limited companies, private limited companies and public companies. Private companies are governed by the Civil and Commercial code, whereas the personal company act governs public companies.
The registration fee for a private limited company in Thailand is 5,500 Baht per million Baht of capital. The registration fee is 2,00 Baht per million Baht of capital for public limited companies.
Company registration process
Following are the steps to incorporate a company in Thailand:
After getting your business visa and deciding upon the business legal structure, you must register your company. The first step of business registration in Thailand includes giving your company a name. This can be done online by creating an account.
The next steps in the registration process are:
- Registration of company name
- Preparation and submission of Memorandum of Association (MOA)
- Preparation and Submission of Article of Association
- Fixing a Statutory meeting
- Submission of other documents of company registration
THAI GOVERNMENT FEE
Company name registration
5000-250000 THB for per million Baht of Capital
Filling and submitting MOA
50 Baht for 100000 THB of capital/500 THB for 25000 THB
Filling and submitting Article of Association
Registration for Tax ID
After registering your company, you will be required to register your company for tax and vat within 60 days of incorporation. For this, you will have to get a corporate tax ID from the Thailand Revenue Board. This process can be done online.
How much does it cost to incorporate a company in Thailand?
- The cost of starting a new business and incorporating a company in Thailand is roughly around 80000-100000 Baht.
- A government fee of 7000 Baht is to be paid up capital while registering the company is 1 million Baht. Consecutively, 12000 Baht is charged for capital of 2 million Baht.
Are foreigners on certain passes allowed to start a business in Thailand?
The civil and commercial code in Thailand does not make a distinction between Thai shareholders and Foreign shareholders. Hence, foreigners can register their companies in Thailand with or without a Thai partner. However, all foreigners must apply for a business visa. Without a valid business visa, foreigners cannot work in Thailand.
Government assistance for foreign-owned businesses
As part of the COVID-19 recovery plan, Thailand’s cabinet passed a new resolution on September 14, 2021. Setting up a company in Thailand and company registration in Thailand is easier now.
The resolutions have been made keeping in mind immigration, tax, and land ownership rules about foreign investors, business owners, and foreign skilled professionals.
Qualified foreign applicants can now apply for a long-term 10-year resident visa to live in Thailand. Visas will also be provided for spouses and children. Spouses on a dependent visa will automatically qualify for a work permit.
Some qualified foreign nationals can now enjoy the same income tax rates as Thai citizens. Additionally, they could also be exempted from tax in some situations. They can also apply for a 17% fixed income tax rate following the Eastern Economic Corridor Scheme.
Land and Property
Some qualified applicants will enjoy relaxed constraints on foreign ownership and rent of land and property.
How can Multiplier help?
Thailand is one of the fastest-growing economies in the world. Hence, if you are worried about starting a business in Thailand, do not stress. Many foreigners are already working in Thailand because they found the country to be a thriving hub.
If you are also expanding overseas business and stressed about issues like administrative responsibilities, hiring a new workforce, and research and development, do not stress. You can trust Multiplier to take care of these issues for you effectively. Multiplier offers many SaaS-based EOR and PEO services to help you set up a business in a foreign country. They will look after responsibilities like employee payroll, company registration, global talent hiring, and much more.