ThailandStarting a Small Business in Thailand for Foreigners in 2024

August 4, 2023by Tetra Consultants0
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  • Thailand has been a rapidly developing country with a strong economy and various opportunities for foreign investors. One can register a business in Thailand which can be challenging and complex. Taking aside all the cultural and language barriers there presents a number of laws and regulations which are needed to be followed. The laws and regulations are not easy to be navigated and the business culture and environment are also different from what many foreigners have experienced. 
  • The starting of small business in Thailand for foreigners is a complicated process. The country restricts and prohibits many economical areas and categories for foreigners primarily in the foreign business act of 1999. The act restricts foreigners to engage in many business sectors and categories in Thailand unless the business operation permit is obtained from the Director-General of the Department of Business Development, Ministry of Commerce along with the approval of the Foreign Business Committee. The legislative framework has drafted a separate law that controls foreign ownership of lands as well as also takes care of activities such as banking, insurance, finance, and shipping.  
  • The vigorous economic accomplishments have made Thailand an attractive spot for the commencement of business. The Thai government offers ample funding, adequate infrastructure, and an efficient workforce to those who want to start a business in Thailand. The main governmental agency promoting foreign investment in the country is Thailand’s Board of Investment, which provides various ancillary services to foreign companies such as incentives, services, and information. The incentive ranges from tax exemptions to the exemption on export and import of raw materials. Moreover, foreigners are not allowed to hold more than 49% of the company thus, the foreign business need to find a Thai partner who is willing to hold 51% of the share of the company.
  • Developing a small business in Thailand as a foreigner is not easy and comprises many barriers which are difficult to cross. There present many rules and regulations which are needed to be abided with for the compliance of laws and regulations. However, with a bit of planning and perseverance, the barriers can be resolved and the obstacles can be overcome to start a small business in Thailand. 
  • Tetra Consultants can help you with the registration and setting up of small businesses in Thailand for foreigners. We provide various services such as offshore company incorporation, corporate bank account opening, nominee director and shareholder services, and international trademark registration. There are many more ancillary services provided by Tetra Consultants that are designed and customized to serve our clients in a better way. 

Some key steps needed to be considered before commencing small business in Thailand. 

Small business in Thailand for foreigners can be commenced by abiding by laws and various compliances which are listed below. The compliances are required to be accomplished before the execution of the small business. 

Find a Thai Partner:

  • According to the foreign business act of 1999 restricts foreigners to hold more than 49% of the shares of Thai businesses in Thailand. This implies that the foreign partner can only hold up to 49% of the shareholding of the business situated in Thailand and the rest 51% is held by the local Thai partner. Thus, businesses in Thailand are needed to comply with the laws of the foreign business act of 1999 and needs to look for a partner who is a local Thai person and is willing to provide services as the partner of the company. If the foreign company wants to perform activity as a sole proprietorship the laws do not permit them the same. 
  • Small business in Thailand for foreigners can ideally exist in the ordinary partnership which includes legal standing, legal rights and obligations, and liabilities that are distinct from the partners. The other form in which foreign companies can set up their business is a limited partnership which includes liability limited to the sum of the contribution. The last option that a foreigner can choose is to form a limited company in which the money is split into shares according to Thai law and the company is registered by at least 3 promoters and shareholders. All these business structures will need a local Thai partner to form the business. 

Board of Investment (BoI) promotions: 

  • Foreign entrepreneurs who wish to own 100% of the company will need to join the Thailand Board of Investment. The board encourages and promotes small groups of international companies facilitating them with the visa and work permits. Under this, the corporate tax is also waived for the promotion and protection of international companies. The one who wishes to execute small business in Thailand can enroll themselves in the Board of Investment (BoI). The process is a long and complex process that obligates the companies registered under them to submit or disclose the monthly report and to obtain the assistance of the business lawyer or accounting firms to comply with the laws. 

Register business:

  • The protocol might be difficult but requires systematic abatement of law to ensure that the business name does not exist in the country anywhere as. The documents required for the registration of the business include all the documents mentioning the list of the shareholders and the shareholding pattern, minutes of the meetings, and proof of share capital payment. For registering and complying with the laws one needs to register the business with the Department of Business Development (DBD). After obtaining the incorporation certificate from the authority it is required to file for other financial licenses registrations such as VAT licenses. These licenses help in determining the type and size of the business. VAT registration becomes compulsory if the business receives more than 1.8 million baht in annual sales. The VAT license is required to be obtained from the local revenue department of the country. There present various other registrations and licenses required to be obtained on the basis of the business type and size. Tetra Consultants can help you in determining the license requirements along with the incorporation services. 

Application for a visa and work 

  • The visa application process includes a letter from the local labour industry, a letter from the Thai company partner offering jobs, and a list of documents mentioned in the Thai embassy. Along with this $20 charge as a fee for double checking the documents to be submitted. Also for obtaining the work permit a non-immigrant B visa is not enough and thus requires obtaining a work permit. If the business is promoted by BoI then only these requirements are exempted for the business and business associates to follow. 

Open a corporate bank account:

  • A business can choose an appropriate bank according to its suitability, needs, and preferences after the licensing of the business. To comply with the banking regulations, and structure an accounting team or firm could be hired for the set up of the business banking accounts. Business in Thailand  requires accounting firms to comply with the banking guidelines and set up proper bank accounts. 

Explore small business ideas: 

  • Thailand is the world’s 2nd largest economy in Southeast Asia based on the tourism industry and a huge amount of foreigners contribute to their GDP through tourism. There are various opportunities for smal businesses where they can operate and earn these sectors include tourist guides, Thai restaurants, clubs and bars, and many more services for foreign tourists.

 Conclusion:

  • Experiencing a small business in Thailand for foreigners might be challenging and rewarding as well. Thailand has been making impressive progress in globalizing its economy and also developing a country with a strong infrastructure. Thailand has ample amount of funds and investments to invest in business structures to boost their economy. As seen the country has been very rigid with the foreign business owners who want to operate in Thailand. The maximum of 49% of the shareholding and the long procedure for obtaining BoI can be challenging for foreign business owners. 
  • Contact us to know more about how to register a company in Thailand and our team of experts will revert within the next 24 hours. Tetra Consultants are always ready to assist and administer you by helping you to develop, commence, or execute your business in a more hassle-free way. Our dedicated team of staff members is experienced and knowledgeable people who have knowledge of the laws and can also help the business to grow.  

Tetra Consultants

Tetra Consultants is the consulting firm that works as your advisor and trusted partner in your business expansion. We tell our clients what they need to know, instead of what they want to hear. Most importantly, we are known for being a one-stop solution for our valued clients. Contact us now at enquiry@tetraconsultants.com for a non-obligatory free consultation. Our team of experts will be in touch with you within the next 24 hours.

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