5 Critical Factors Foreign Entrepreneurs Need to Consider When Starting A Business in Thailand
Thailand is an excellent place for starting a business due to its business-friendly environment and strategic position in the Southeast Asian region. Recently, Thailand was named the best nation in the US News & World Report’s 2020 Best Countries to Start a Business ranking.
While Thailand offers the best location for starting a business, it is not without challenges, especially foreign entrepreneurs. Here are five essential factors foreign entrepreneurs have to consider when doing business in the country.
Thailand’s culture and language
Thailand has a diverse culture that shows influences from all over Asia, including China and India. To establish a successful legal entity in the country, foreign entrepreneurs must at least understand the country’s basic culture and language.
Many institutes provide Thai language courses across the country, such as the Center of Thai as a Foreign Language course, including language, cultural, and social courses. Alternatively, foreign entrepreneurs can look for a dependable Thai business partner or hire a translator to overcome the language barrier.
Thailand’s economic status and business environment
Although Thailand has a growing economy and a vibrant domestic market, entrepreneurs should still research their target market and see if it is profitable. Market research will also help foreign entrepreneurs to identify their competitors and get the best placement for their products or services. Also, they can understand and determine their target audience’s needs and utilize a relevant marketing plan.
Available business structures
Before setting up a business in Thailand, foreign entrepreneurs should consider the type of business structures they prefer. They should note that unless the company they are planning to establish is a part of the Board of Investment program, most of their company’s shareholders must be Thai. Also, they can only own not more than forty-nine percent of the company’s share.
The three common types of business structures in Thailand are limited companies, partnerships, and joint ventures. Most business owners opt for a private limited company, where the directors have unlimited liability while the shareholders have limited liability.
Thailand’s Foreign Business Act and BOI
Foreign entrepreneurs should also check out the Foreign Business Act, which gives guidelines on the prohibited activities for foreign companies, activities that require approval from related government bodies, and activities that do not require special permission.
They should also learn about the Thailand Board of Investment, which provides tax and non-tax incentives to eligible businesses. BOI’s tax incentives include corporate income tax exemption for up to thirteen years and import duties exemption on essential or raw materials utilized for research and development purposes. On the other hand, BOI’s non-tax incentives include complete foreign ownership and the permit to hire talented workers and experts to work in the country.
Visa and working permits
Foreign entrepreneurs need to acquire a Business Visa or non-immigrant B to work in Thailand legally. They can apply for this visa at either the consulate of their home country or at a Royal Thai Embassy.
Another type of new visa is called the Smart Visa program, which is offered to investors, talented people, and startup entrepreneurs who want to invest or work in some industries. The visa lets them stay in the country for up to four years and exempt them from work permit requirements and other privileges. Targeted sectors that fall under this category include medical and wellness tourism, agriculture and biotechnology, and automation and robotics.
Foreign entrepreneurs who wish to apply for the Smart Visa must meet the BOI’s office’s criteria. Once their qualifications are verified, they will receive a qualification endorsement letter to be submitted to their home country’s consulate or a Royal Thai Embassy.
Seeking help from a professional Business Services agency in Thailand
Opting for a reputable Business Services firm in Thailand, such as Reliance Consulting, helps entrepreneurs streamline their business setup and ensure it is legally compliant. To choose the right firm, entrepreneurs need to consider various factors, including the firm’s credibility, reliability, years of experience, industry expertise, primary services, additional services, and pricing structure.
