YOUR ULTIMATE GUIDE TO:
SETTING UP A BUSINESS IN THAILAND
SETTING UP A BUSINESS IN THAILAND
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Your Ultimate Guide to Setting Up A Business In Thailand
Want to start a business in Thailand?
Is your company ready to expand internationally?
Looking for a great economic market in Asia to enter?
Take a look at your complete guide to setting up a company in Thailand, including reasons and benefits why you should set up a company in Thailand, getting work visas and permits in Thailand, and labor laws pertaining to your company.
Why Start a Company in Thailand?
Thailand is a vibrant country with an emerging economy and very low unemployment. It is the eighth-most populous country in Asia, and it has good infrastructure with coming investment and expansion to improve rail, air, and road transport options.
The government wants to improve the Eastern Corridor (the three eastern provinces) into a leading Southeast Asian economic zone called Thailand 4.0, and the aim of this investment includes:
- Economic prosperity
- Social well-being
- Raising human values
- Environmental protection
New engines of growth over the next decade range from many high-tech industries, such as:
- Smart electronics
- Next-generation automotive (EVs, autonomous vehicles)
- Agriculture and biotechnology
- Affluent, medical, and wellness tourism (tropical climate with beaches)
- Food for the future (hydroponics, bioengineering)
- Aviation and logistics (including airport infrastructure)
- Biofuels and biochemicals (ethanol)
- Medical hub
- Digital transformations
In line with its fellow Southeast Asian economic members, like Vietnam, Cambodia, and Singapore, Thailand’s focus on investing in infrastructure represents a great opportunity for businesses looking into international expansion.
The overall push for Thailand is part of a larger, regional initiative spearheaded by China to invest in several transportation zones for land, sea, and air to make Asia as a whole a world economic powerhouse. This is a multi-trillion-dollar effort.
Considering expanding your business in Asia? You have plenty of reasons why you should start your business in Thailand!
Statistics Behind Thailand’s Opportunity for Business Growth
Thailand is ranked as one of the most business-friendly places in the world. The World Bank gave Thailand a 78.45 Ease of Doing Business (EODB) score in 2019. That score—up 1.06 points from the prior year—earned Thailand 27th place in the EODB ranking. Thailand was only 8.14 points away from New Zealand, which scored 86.59.
Foreign direct investment in Thailand has more than doubled in the past decade to more than $222.7 billion, or 48.9% of the country’s GDP, as of 2018. In 2019, a total of 387 projects received foreign direct investment in Thailand, with more than 70% of projects coming from the manufacturing, finance, and insurance sectors. Other important sectors are real estate, commerce, information and communication.
Japan and Singapore invest heavily in Thailand, representing more than half of foreign direct investment. Hong Kong, the Netherlands, Germany, Mauritius, and the UK are other top investors of foreign wealth.
The industrial and service sectors are both growing, with the former playing a large role in Thailand’s burgeoning exports, while the latter focuses on tourism and finance. Around half of the country’s population works in agriculture.
As a whole, Thailand’s economy has been growing steadily since the mid-1990s, and this pattern looks to continue over the coming decades.
Thailand looks to be a major regional player, as two-thirds of its exports go to other Asian countries. The remainder went to North America and Europe.
Science and technology will grow as part of Thailand 4.0 initiative while keeping with traditional Thai roots. Farmers will be able to expand yields with new types of crops and seeds with biotechnological improvements, while new food manufacturing and harvesting machinery will make existing farms more lucrative.
Now that you know why Thailand is ripe for investment, let’s take a look at how to start a Thailand business setup when you want to open a company in Thailand.
Tips for Registering a Company in Thailand
You’ve decided Thailand is the place where you want to expand your business. Before you begin building your corporate office, you need to know how to start a foreign company in Thailand.
First, you must register your business properly with the Government.
- Choose your company structure. Popular options include a Thai Partnership or a Thai Limited Company. A Private Thai Limited Company is the most popular choice for companies. It’s a company with three or more owners whose day-to-day duties are limited because directors run the company proper. Owners are simply investors.
- Reserve and register your entity’s name with the Department of Business Development (DBD), part of the Ministry of Commerce. You can do this online.
- File a Memorandum of Association with the Ministry of Commerce. This document includes the name of the company, company objectives, names of the shareholders, and the shares that each owner holds.
- Hold a statutory meeting. This meeting outlines by-laws of the company, shows who receives shares and at what amounts, and the appointment of directors and auditors of the business to make sure who the government can contact if there are issues.
- Register your company with the Ministry of Commerce within 90 days of holding the statutory meeting. This makes it official that you’re going to be a company in Thailand.
- Register for a value-added tax and income tax to obtain a company tax ID card within 60 days of incorporating. This sets up your infrastructure for payroll tax deductions and your income taxes when starting a business in Thailand as a foreigner.
Talk to the Board of Investment
The Thailand Board of Investment (BOI) offers incentives to drive investments in Thailand. If your business meets the criteria of the BOI, you can submit an application to the BOI. Your company could receive an exemption of corporate income tax for up to 13 years, a reduction of half of the corporate income tax for 5 years, and an exemption of import duties on raw or essential materials used for R&D.
Non-tax incentives include the ability to own land and allowing for permits for foreign workers if the company is 100% foreign-owned.
If you aren’t a lawyer or international business attorney, it’s important to hire a firm that understands Thai law when it comes to business registration and incorporation. You’ll also need to know employment law in Thailand when you have foreign workers coming into the country.
Work Visas for Foreign Employees Working in Thailand
If you’re an international company that wants to set up and employ individuals in Thailand, you’ll need to arrange for work permits and visas.
A reliable Employer of Record partner can provide you with the advice on the type of visa required, how to deal with immigration services when workers come to Thailand, work permit applications, employment passes and dependent passes. Your foreign workers must have the right entry, renewal, and exit forms on file with government ministries.
The ratio of Thai to foreign workers must be at least 4-to-1 or higher. So for every five employees at your company, just one can be a non-Thai citizen. Keep this in mind when your company applies for work visas for staff coming from other countries.
Another thing to note is that you can only hire a non-Thai resident when you prove that a Thai citizen cannot do the work you require. With a low unemployment rate, you’ll need to have some specialized criteria to justify hiring a foreign worker.
Getting a job in Thailand as a foreigner faces other challenges. First, each prospective employee needs a non-resident visa before they can even get a work permit. Then, once they’ve found a job, the employer has to apply for a work permit for that person and the employee must come to Thailand in person to apply for a work permit.
This takes time and money and can be a complex process. Hiring a business that specializes in Employer of Record (EOR) services for foreign companies looking to do business in Thailand allows you to shorten time frames and potential costs by leveraging their knowledge of how to effeciently navigate through the necessary processes.
Applying for Work Visas in Thailand
Workers and business owners both must begin applying for visas through a Thai consulate or embassy in their home country. Thailand has five different visa options, depending on the type of work an employee will be performing in the country.
Most foreign workers require a Non-Immigrant Category B visa to work in Thailand.
Before you apply for a work visa, you should gather these documents. You’ll need to present them to the Thai consulate or embassy in your country.
- Passport valid for 6 months into the future or longer. It must have a minimum of two blank pages to be filled out. One-year work visa applications require you to have another 18 months of validity on a passport.
- Signed and dated Thai work visa application.
- Passport-sized picture taken within the last six months. It must have a white background and a neutral facial expression showing your entire face.
- Proof of sufficient financial means to pay for your entire stay. This means 20,000 Thai baht for solo travelers ($650) and 40,000 Thai baht ($1,300) for a family for three months.
- Official police clearance certificate validated by Thai authorities.
- Letter of Approval from the Thailand Ministry of Labour. A Thai employer must apply for this at the Office of Foreign Workers Administration in the Department of Employment.
The process of getting a work visa is as follows:
- Set an appointment with the Thailand embassy or consulate in your country. Some payments or appointments can happen online.
- Prepare your visa documents as shown above.
- Submit your visa application and documents through the consulate.
- Pay for the visa fees
Non-immigrant work visas last for three months in Thailand. You’ll need to enter Thailand before it expires to apply for a work permit, so you should enter Thailand soon after approval of the work visa to give you enough time to get your permit.
Once you have secured the proper Thai work visa, you can apply for a work permit (different from a work visa) in Thailand through the Department of Employment.
Applying for a Work Permit in Thailand
Both the company and its employees must apply for work permits in Thailand. Workers need to arrive in the country first before applying for a work permit.
Requirements & Documentation for Companies Who Want to Work in Thailand
- Registration to trade in Thailand
- Capped at 10 foreign work permits
- 2 million baht in capital or 1 million Thai baht if the employee is married to a Thai national.
Employers must provide the Thai embassy in their home country with several documents in Thai or English before getting foreign workers in the country:
- Employment agreement
- Letter of employment with contract duration, position, salary, and job requirements
- Company Registration Department Certificate
- VAT certificate and proof of VAT filings
- Current financial statement
- Company withholding tax
- Physical address of the main office
- List of company shareholders
- Signed copy of the company director’s passport and work permit
Worker Requirements and Documentation Needed
Employees also must meet certain standards when applying for work permits in Thailand. This is to ensure they don’t become dependent on social entitlements or government welfare when working in Thailand.
- Bachelor’s degree
- Work experience in the job you intend to work in.
- Job offer from a company that intends to have a physical presence in Thailand.
- One job per permit, so no filling out extra permits for one person.
- Must be a job a foreigner can do legally in Thailand, meaning they can’t take away a job that someone in Thailand can do.
Documents needed include:
- Six 2-inch by 2-inch passport photos for identification
- A valid medical certificate current within the last 30 days to show someone’s good overall health
- Original passport
- Signed copy of a non-Thai immigrant work visa obtained through the Thai embassy in your home country
- Departure card TM.6
- Signed letter of employment from the company you will work for in Thailand.
- Signed copy of your certificate of education showing you have at least a bachelor’s degree.
- Proof of current address in Thailand where you will live.
Workers must submit these documents with the Ministry of Labour in Bangkok or the Department of Employment in the area where they work.
The process takes about seven days to complete.
EOR Services in Thailand Can Help Start Your Business in Thailand
A company that specializes in employment of record services in Thailand can help with this process, particularly if you don’t understand Thai labor law very well.
Benefits of an employer of record include:
- Familiarity with Thai law
- Knowing what forms companies and employees must fill out
- Understanding the process of obtaining work visas and permits
- Ensuring the process is fully compliant with Thai law
How Hiring a Professional Employer of Record Partner Can Help
A professional Employer of Record (EOR provider) can help your firm fulfill your Thailand staffing requirements and you can save money, paperwork, labor costs, and legal troubles by working with a firm that specializes in Thailand EOR & payroll solutions.
These specialized firms already know and comply with Thai employment law, whether you need a local labor force supplemented by in-person or remote workers, or you just need assistance paying your employees properly.
How Aster Lion Can Help
Reach out to our team for a free consultation to understand the requirements and steps involved in getting you set up and running a business in Thailand.
We’ll help you navigate through the entire process to ensure you’re up and running with the least amount of steps. You can reach us directly on email@example.com or enter your details below and someone from our team will reach out.
Aster Lion is an Employer of Record based in Thailand providing the following services:
- Corporate Secretary
- Visa & Work Permits
- HR & Payroll Solutions
Let us know how we can help you!