Business in Thailand

business in thailand

Business in Thailand.

Thailand is indeed skyrocketing when it comes to the business in Thailand industry.

Thailand is renowned for its outstanding performance when it comes to the business sector.

With the second largest economy in Southeast Asia after Indonesia, Thailand is conveniently located to be a hub for the ASEAN continent.

Being known for its beautiful natural sceneries as well as a booming economy, Thailand is indeed a landing ground for foreign investors who need to doing business in Thailand.

A regional leader in tourism, automotive, electronics, Thailand has shown a resilient economy despite going through tensed political situations in recent years.

Long ranked as one of the fastest growing countries in Southeast Asia, Thailand has conquered its place as one of its top exporters.

Now led by services and industry, Thailand is nonetheless also a regional hub for many industries and a leader in the production and export of several agricultural commodities and transformed products.

Because of the massive foreign investments, especially from Japanese companies, Thailand has become a regional hub for the automotive industry.

It is also a large production center for electric and electronic appliances and components, which are exported all over the world.

To understand how business in Thailand now, we would like you to see interview of the successful business owner as the clip below.

It has many business opportunities in Thailand for everyone.

A leader in the production and export of several agriculture commodities, such as rice, rubber and fishery products, Thailand is primarily a service economy with a strong financial sector and allow everyone starting a small business in Thailand with minimum of cost.

Thailand is a leader for tourism in Southeast Asia in terms of numbers of foreign tourists’ arrivals.

With Bangkok, a global capital with rich heritage, world famous islands and beaches, jungles and wild nature and famous UNESCO world heritage sites, Thailand is a world-famous destination, long promoted as “Amazing Thailand”.

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Table of Contents:

1. Starting a Business in Thailand
2. What you should consider on Setting up Business in Thailand
3. Business that may need Specific License to operate
4. Types of Legal Corporation in Thailand
5. Duty of Business Entities in Thailand

1. Starting a Business in Thailand

Foreigners and the like who have fell in love with Thailand often ask the question: How to start a business in Thailand for foreigners?

It is a topic most often brought up by travelers who have become loved with the lifestyle they’ve experienced in the Kingdom.

It’s also the way they believe they can live in the country longer while making a comfortable living in Thailand.

But they are not aware that foreigners who want to open a shop in Thailand is not allowed to fully own a Thai company unless they get approval from Ministry of Commerce for the Foreign Business License (FBL) or grant the privilege from the Board of Investment (BOI).

And they wonder how much it cost to start up a business in Bangkok, Chiang Mai, Phuket, Pattaya or on any of the idyllic beaches along the country’s beautiful coastline.

There are also cultural differences and legal boundaries that have to be considered before planning to open a business in Thailand.

Starting a business in Thailand is not as hard as you would think since Thailand is very receptive to foreign businesses.

Thailand has a lot of potential for a successful business if you:

  • Have a strong idea and business plan
  • Have ample supply of funds to start your business
  • Willingness to understand Thai culture, mentality and be open minded with a huge dose of patience

If you’re a foreigner looking forward to start a business in Thailand please note that:

  • You cannot own 100% of the Thai company unless you get approval from Ministry of Commerce for the Foreign Business License (FBL) for Company Limited, Branch Office, Regional Office etc. or you grant the privilege from the Board of Investment (BOI).
  • You must have a Thai Partner which will hold 51% of the Thai company, and you can own a maximum of 49% of the shares.

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2. What you should consider on Setting up Business in Thailand

As one of the gateways to some of the world’s most remarkable tourist destinations and one of the booming economies in Asia, Thailand’s friendly people and high standard of living have long attracted visitors and those looking to settle or retire there on a fixed income.

However, as the country continues to industrialize, it’s also cited as an example of a remarkable economic success story.

It’s not unusual that there’s an increasing number of entrepreneurs looking to combine the economic possibilities of a growing market with the chance to live, work and play in the land of smiles.

If you’re considering setting up a business in Thailand, there’s a few things you have to put in mind to have a good start.

starting a small business in thailand

Do your Research

Make sure that what you are offering is what people really want.

Asian culture specifically Thai culture is very different from its neighboring countries like Malaysia, Laos, Cambodia, Vietnam etc.

This makes Thailand so unique, so if you want to fit in, make sure you do your research so the Thai people can embrace and appreciate what you’re offering.

This sounds obvious, but it is surprising how many people don’t do it. Assess the competition and how they are performing.

Are there other businesses nearby offering the same or a similar thing? Ask yourself how are they are doing.

Make a realistic assessment of whether your proposed business can do any better in the land of smiles.

Find a Thai partner or someone who can speak the language

This is a crucial point and should not be overlooked.

You need to fully understand what you are getting yourself into, especially if you are signing contracts with land owners, business partners etc.

At this point, you need to have a full understanding about how Thai Business works, have someone who can help you about all the obstacles in setting up business in Thailand.

Once the business is up and running you need to be able to communicate with and understand your Thai staff.

Getting a basic grasp of the language is very important, although there are many Thai’s who speak English well, you still need to keep your pace.

Location of your Business

Determining the location of your business is a must.

Note that there’s a lot of local and international competition, this is a big factor that you must always consider, you should do your research on where you want your business to be, who will be your market, will they accept or acknowledge your product etc.

The best thing that you should do is to explore Thailand first then assess on where you will establish your business.

Registered Capital required in Thailand

Registered Capital in Thailand actually varies, the minimum capital requirement for a Thai majority shareholder company (limited company) is 2 million Baht, with a government set up fee of estimated around 7,000 Baht.

If you have a Thai spouse, this requirement is reduced to 1 million Baht.

On the other hand, if the business is required to obtain a Foreign Business License under FBA, the minimum capital requirement must be THB 3 million for each business activity.

Thai Staffs and Foreign Staffs

Setting up a business means you also have to hire staffs that will work for you and for your company.

In Thailand, in order to hire a foreign staff, you must first hire Thai Staff, this in accordance to the Labor Department.

In order for the foreign staff to gain 1-year visa in Thailand and a Work Permit, a ratio of 4 Thai staff is to 1 foreign staff should be followed (depending on certain circumstances).

The employment of Thai staff must be evidenced by presenting detailed documentation, including

  • Evidence of social security payments
  • Documentation related to withholding of personal income tax
  • Photographs of each Thai staff, working place, together with the foreigner
  • Financial statements of the employer (the company) of the preceding year
  • Corporate income tax return of eth employer of preceding year

The Thai staff must have been employed since at least since 3 calendar months before the date of application.

Know your market and reach out to them

Once you have setup a secure and sustainable business framework, the hard work really begins.

Thailand has a very competitive business environment. You need to have your foot on the pedal from the start and never take it off again.

Know what your target market is and never stop reaching out to it. The internet has provided new opportunities for foreign businesses in Thailand.

We are no longer dependent on the local taxi mafia to bring business to us. Embrace these opportunities in the most creative and imaginative ways possible.

3. Business that may need Specific License to operate

If you are starting a business in Thailand then you will need to apply for a business license for certain types of trade.

Some types of business in Thailand requires license or permit depending on the category of the business.

A business license allows the company to conduct specific activities and permitted by the Thai Government Department or agency.

Some examples of businesses that requires license:

  • Restaurant and Bar – opening a Restaurant and Bar may require a few licenses such as Food License from the district office to allow the business to operate and serve food and Alcohol License is require for the Bar to sell and serve liquors.
  • Travel Agency – to operate and run a travel agency, you must first acquire a TAT Tourism License from the Tourism Authority of Thailand before you can start offering tour and travel packages.
  • Import and Export License – this license is issued by the Customs Department, this is required if you wish to import or export goods in Thailand.

These are just some of the examples of business the requires specific license from a Thai Government Department or Authorized Agency.

Remember that you must legally obtain every necessary document to push through your business in Thailand.

Here are the other types of licenses that you need for specific types of businesses:

  • Recruitment License
  • Construction License
  • E-commerce License
  • Factory License
  • FDA License
  • Hotel License
  • Publishing License
  • School License

4. Types of Legal Corporation in Thailand


There are two types of limited company, Private and Public Limited companies.

The Private Limited Company is governed by the Civil and Commercial Code of Thailand and the Public Limited Company is governed by the Public Company Act.

Private Limited Company

A private limited company is formed through a process which leads to the registration of a Memorandum of Association (Articles of Incorporation) and Articles of Association (By-laws), as its constitutive documents.

A Thai Limited Company can be set up relatively quickly if the paperwork is in order.

There must be at least 3 promoters to register the company and a minimum of three shareholders must be maintained at all times.

The company should have a minimum of 3 directors, half of whom must be Thai natives, A private company may be transformed into a public limited company.

The registration fee for a private limited company is around 7,000 baht per million baht of capital.

Public Limited Company

To start a business, the public company needs a certificate of initiation after it is incorporation.

A public company cannot be converted back to a private company.

The shareholders of a public company can freely transfer their shares. Can raise capital from the general public and need to comply with a few lawful limitations.

The registration fee is 2,000 baht per million baht of capital for a public limited company


A partnership is another option for foreigners who are seeking to establish their business here in Thailand.

Basically, a partnership is established through an agreement made by the potential partners.

All prospective partners agree to invest in the establishment of a partnership prior to the commencement of a certain activity, in some cases, a partner can join an already existing partnership.

A Partnership for Thai nationals is considered very simple to do with far less restrictions, partnerships for Foreigners are restricted by the Foreign Business Act.

There are two types of Partnerships in Thailand, Ordinary and Limited.

According to the Thailand Civil and Commercial Code, a partnership is “A contract whereby two or above persons agree to unite for a common undertaking, with a view of sharing the profits which may be derived there from.”

As per the Foreign Business Act, any foreigner who aspires to carry out a partnership deed is not allowed.

But, if that foreigner is willing to invest above half of total investment cost or is ready to become a managing partner, the Foreign Business License may be applicable.

Hence, in order to avoid the Foreign Business License, it is recommended that foreigners do not invest exceeding half of the overall investment or act as managing partner for the partnership.

And, in case they are not functioning as a managing partner, then it is hardly possible that they will be able to protect their interest.

Ordinary Partnerships

In the case of an Ordinary Partnership, all the Partners are wholly and jointly liable for all the obligations of their Partnership arrangement.

Jointly refers that every Partner is liable and accountable for all the Partner’s wrong doings.

Whereas, wholly refers that all the Partners are legally responsible with all of their personal wealth for the obligations and other debts of the Partnership that may occur, given that the assets of the Partnership arrangement are insufficient for satisfying the claims of the creditors.

It implies that the personal assets may be liquidated for fulfilling the business debts.

The Ordinary Registered Partnerships are required to be registered with Commercial Registrar.

The Managing Director who is appointed for managing the Partnership arrangement is responsible for the registration.

The registration is required to take place in the province where the Partnership head office is located.

For the purpose of registration of a partnership, the fee is 1,000 Thai Baht for every 100,000 Thai Baht of the registered Capital with the minimum fee of 1,000 Thai Baht and the maximum fee of 5,000 Thai Baht.

Limited Partnerships

There are two distinguished classes of Partners in a Limited Partnership. And, each class has its own kind of rights and liabilities.

In a Limited Partnership, there can be one or above of Partners.

And, these Partners are jointly and wholly liable to carry out all the obligations mentioned in the partnership deal.

This Partners class is known as General Partners.

By the word “Jointly”, it indicates that each Partner is accountable for all the acts of the Partner, be it right or wrong.

And, by “Wholly”, it makes it clear that the Partners are responsible with their private assets as well.

It should be clear that only General Partners can be Directors of an LLP, or Limited Liability Partnership.

The second class of Partners is known as Limited Partner.

There should be one or exceeding than one Limited Partners in a Limited Liability Partnership and their liability is restricted to the total sum of capital contributed to the Partnership.

A Limited Liability Partnership is required to be registered with the Commercial Registrar.

The Managing Partner of the Limited Liability Partnership is responsible for registering the Partnership in the state’s jurisdiction where they plan to build the head office of the Partnership.

The cost of registering a Limited Partnership is approximately 1,000 Thai Bath for every 100,000 Thai Bath of registered capital.

However, the minimum fee for registration is 1,000 Thai Bath whereas the maximum fee for registration is 5,000 Thai Bath.

Representative Office

A foreign entity may establish a representative office in Thailand to engage in limited non-revenue-earning activities.

A representative office can conduct only 5 activities without generating any income namely,

  • Reporting on business trends in Thailand to the head office or its affiliate.
  • Providing advice concerning goods of the head office sold to agents or customers.
  • Sourcing of goods or services in Thailand for the head office or its affiliates.
  • Checking and controlling the quality and quantity of goods purchased or hired for manufacture in Thailand by the head office or its affiliate.
  • Preparing information concerning new goods or services of the head office or its affiliate. Any other services as stipulated by the Director-General of the Revenue Department

A Representative Office’s activities must be provided to its head office or subsidiaries and affiliates.

It must be a legal entity registered under the law of a foreign country, and is considered to be the same legal entity as its head office.

A foreign business license is not required according to the Ministerial Regulation Prescribing Service Businesses Not Subject to Application for a Foreign Business License (No. 3), 2560 B.E. A legal entity number is required from the Ministry of Commerce.

And note that at least 2 million baht is required according to the Foreign Business Act, 2542 B.E. Three million baht is required to issue a visa and work permit for an expatriate, and an additional 3 million baht is required for each additional expatriate employee.

Regional Office

A Regional Office is also possible to set up in Thailand.

Regional Offices provides support services to its affiliates in the same region in at least one country.

Regional Offices should be non-profit business. The company or the office must be a legal entity registered under the law of a foreign country.

Once it is established, a Regional Office is considered to be the same legal entity as its head office.

Under the new Ministerial Regulation of the Ministry of Commerce, a Regional Office is not considered a restricted business under the Foreign Business Act.

Therefore, it does not necessary to apply for a foreign business license to operate a regional office in Thailand.

However, a legal entity number is required to apply from the Ministry of commerce.

Please note that at least 2 million baht is required, according to the Foreign Business Act, 2542 B.E.

Branch Office

A branch office is another great option for foreign companies to operate their business here in Thailand.

A branch office will be able to conduct various activities regardless of whether or not they generate any income.

Although it must be a legal entity established under the law of a foreign country, and is considered to be the same legal entity as its head office.

If the business to be operated is considered as a restricted business under the Foreign Business Act, 2542 B.E., a foreign business license must be obtained from the Ministry of Commerce.

If the business to be operated is not restricted under the Foreign Business Act, 2542 B.E., a commercial registration certificate must be obtained from the Ministry of Commerce.

Please note that at least 3 million baht is required if the business is a restricted business and at least 2 million baht is required if the business is not restricted under the Foreign Business Act, 2542 B.E.

doing business in thailand

5. Duty of Business Entities in Thailand

Success in establishing a business in Thailand is not that easy, it’s not an easy road.

Indeed, setting up business in Thailand cost a lot lower than western countries and other neighboring Asian countries.

Once you set up your company the work is not finished, you still need to process the accounting, SSO, VAT, Taxes, Balance sheet etc.,

Having a company is a lot of work but at the end of the day your company will surely thrive in Thailand.

Paying Taxes

Another major operating responsibility is filling taxes and renewing licenses.

You should hire an accountant. Usually, the same person who registered your company can do this for you.

If you can’t find one, ask local business owners for a good referral.

Not paying your taxes can result in heavy fines, your work permits cancelled, or worse, jail, asset seizure, and even company shut down.

Corporate Income Taxes

The corporate tax rate in Thailand is 10% in 2019 for profits exceeding 300,000 baht per year, due to Revenue Department regulations.

Normally it’s between 15% and 20%. You need to hand in corporate income taxes twice a year.

Corporate Income Tax (CIT) is a direct tax levied on a juristic company or partnership carrying on business in Thailand, or not carrying on business in Thailand but deriving certain types of income from Thailand.

Tax will be withheld on interest paid to associations or foundations at the rate of 10%.

Royalties paid to associations or foundations are subject to 10% withholding tax.

Government agencies are required to withhold tax at the rate of 1% on all types of income paid to companies.

VAT and Withholding Taxes

VAT is calculated on sales of goods and services.

The current VAT rate is 7%. It’s only calculated on the difference between the price you buy the goods for and the price you sell the goods for.

Some types of company service income are subject to withholding tax, or WHT.

The company has to give Withholding Tax certificates for all transactions that fall under this category.

You must pay WHT to the Revenue Department every month.

WHT rates depend on income types as seen from the Revenue Department website on Subject 6. you can report WHT by paper before the seventh day of each month or by e-filing before the 15th day of each month.

Social Security

Companies have to pay Social Security each month for employees.

Five percent of Social Security for health insurance is levied up to 750 baht per month per employee.

As an employer, you need to take out Social Security for employees and pay an extra equal amount to the Social Security office.

For example, if you pay your worker 15,000 baht, the total amount paid to Social Security is 1,500 baht, or 750 baht from the employee and 750 baht from your company.

You need to pay Social Security before the 15th of every month at the Social Security office, Krung Thai Bank, or Bank of Ayudhya.

You also have to let the Social Security office know within 30 days after you hire a new employee, and before the 15th of the next month when an employee leaves your company.

Group Health Insurance

Medical coverage for Social Security isn’t enough in Thailand.

To maintain the health of your employee and keep them around, consider buying group health insurance.

It’s optional but can attract skillful employees to your company.

And you can use the expenses you pay for insuring your employees as a tax write off.

Personal Income Taxes

Although it’s not a must, companies should pay personal taxes for employees.

The tax rate in Thailand is progressive, meaning it changes and your personal tax liability increases.

For employees that don’t meet the minimum taxable income in Thailand, which is under 150,000 baht, you only have to pay the social security on their behalf.

Accounting Fees

You need to hire an accounting firm to handle everything related to accounting, including:

  • monthly, mid-year, and annual taxes
  • paying Social Security funds
  • preparing and auditing financial statements
  • dealing with the Revenue Department
  • providing tax advice

You need send all receipts and invoices to them every month.

Accounting fees depends on your company type and the amount of monthly transactions.

Be careful when choosing an accountant. Hire someone ethical so you avoid unexpected tax problems that could result in fines or jail time.

Some accounting firms may only offer tax fillings. They won’t deal with Social Security or handle unexpected problems with the Revenue Department.

Conclusion: We can help you to do Business in Thailand

Being one of the leading law firms that assist foreign entities and local people in setting up their businesses in Thailand we have a reputation for providing a quick and polished service when it comes to Corporate and Business matters.

Our lawyers are mostly engaged in Business Services as it is very timely and relevant to Thailand’s peeking economy.

Our team can assist you with all your needs in setting up a company or establishing your business here in Thailand.

We can provide you all the details and we will make sure that our service is worth your hard-earned money.

For consultations and business services please do not hesitate to contact us through our contact details and emails, you may also engage with us through our live chat feature.

Here at Siam Attorney, we give you the best service with the best and positive outcome.