Market entry in Thailand
Thailand is the second-largest economy in South East Asia, ranking 21st amongst 190 countries on ease of doing business and is open to foreign investment. Depending on your business activities, your future company can be 100% foreign-owned or may need a local partner.
Thailand’s main regulation towards foreign investments is the Foreign Business Act B.E. 2552 (1999) that provides 3 lists of business activities that are prohibited or restricted to foreign companies (FBA). Under this law, a foreign company is defined as a company where 50% or more of the share capital is owned by foreigners (“Foreign company”). Read more
Foreign companies are prohibited from business activities specified in the list 1 of the FBA and must obtain a Foreign Business License in order to carry business activities of the list 2 or 3. Prohibited activities include agriculture, forestry, commodities related to the practice of Buddhism, newspaper and television businesses for instance while restricted activities include most service activities. The listing of activities is clearly outdated, and poorly regulates the real business environment of today. The obtention of a Foreign Business License is time-consuming and notably requires to demonstrate that a special know-how and new technologies would be brought to Thailand, which makes it unsuitable for numerous business activities. A few activities can be done freely by majority foreign-owned companies, this is the case for retail or wholesale for instance providing that a significant amount of capital is paid up.
American citizens still benefit from the US-Thai Treaty of Amity that exempts them from most of the business activity restrictions under the FBA. But both these exemptions are strictly limited to foreign shareholding, and do not include tax exemptions or derogations for foreign expatriate recruitment, which can only be given by the Board of Investment (BOI).Numerous companies operating in Thailand are 100% foreign-owned under a license from the Board of Investment coupled with a Foreign Business Certificate. The BOI grants such privileges to foreigners investing in certain activities that are deemed important for the development of Thailand. Eligible sectors are mostly related to industrial activities, but also include digital, software development, trade and investment support.
Aside from the BOI, there is also a set of special incentives for companies to develop activities in the Eastern Economic Corridor (EEC) and special derogations for companies choosing Thailand to set up their Regional Headquarter.
However, the difficulty or impossibility to obtain a Foreign Business License and/or a promotion from the BOI for certain business activities often pushed foreign investors to enter into a joint venture with a Thai partner. The Thai partner will then own more than 50% of the share capital to allow the company to carry out most business activities without any specific restrictions. Corporate and contractual arrangements permitting foreign control of a Thai company are possible, provided that the Thai partner is not a nominee.
Our market entry practice follows a pragmatic approach:
- Business Eligibility Check allowing you to quickly determine whether your business activity can be legally done in Thailand before engaging any substantive cost. When possible, it is recommended that a foreign entrepreneur owns the majority of the shares of his or her company, as it is the best form of investment protection.
- Market Research to analyze industries, distribution channels as well as the size of the market potential for your products and services, and find business partners or investors.
- Entry Strategy to assess a realistic cost and estimate the revenue that your business activity could generate, determine the most suitable structure (soft structure with a representative or legal entity with or without a local partner), and get familiar with the Thai business practices (HR, negotiation, behavior, etc.).
- Business structure to assist with the registration of a Thai limited company, BOI company, Representative Office, Amity Treaty etc. and assist you with ongoing corporate change, post registration duties, accountancy, work permit and visa etc.
70 Million people
35 million tourists arriving yearly
GDP of 520 Billion USD in 2019, 3%. expect growth in 2021
Ease of doing Business Rank: 21/190
100% foreign ownershsip available for certain business activities
Word Intellectual Property Organisation (WIPO)
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
Potent Cooperation Treaty (PCT)
Coonvention on the Recognition and Enforcement of Foreign Arbitral Awards
Is my business activity possible in Thailand?
Business feasibility check
Before engaging any substantial cost, you should check whether or not your business activity is possible in Thailand under a 100% foreign owned company. If not, a Thai local partner may be required.
We have compiled the knowledge gained over the years by our market entry experts to provide a quick and complete answer to business feasibility including eligibility for a promotion from the Board of Investment, Foreign Business License, activities regulated or not under the Foreign Business Act and Thai business practices that may limit access to some businesses to foreign-owned companies.
Is there a market for my service or product in Thailand?
Market research in Thailand
We have a team of local and international experts per industry who will analyze the chance of your product or service to succeed in Thailand based on our deep knowledge of the local market. We assess the size of the market, the potential competitors and the legal or cultural limits to the development of your intended business activities.
Our experts have assisted clients with market research in numerous business activities including digital, telecommunications, infrastructure, food and beverages, etc.
What is the best structure to invest in Thailand?
We determine the best structure for a successful implementation in the Thai market. Depending on your needs and the business activity:
• A soft structure with a local agent/distributor with some dedicated local staff or through a representative
office may be sufficient for a start.
• A complete structure with a 100% foreign-owned company, through a joint venture with a local partner
and/or with a holding company in Singapore or Hong Kong.
• A joint venture with a local partner.
Our entry strategy memorandum also includes the main tax implications, the protection of your investments (Intellectual Property, access to justice and arbitration, fund repatriation, etc.), information on Thai business practices and follow-up questions with our experts to ensure that you got it all clear.
* Average time from the moment we receive complete information from you
** Starting price for simple matter
Thai Business structures
We assist you with the setting up of your entity in Thailand as well as all ongoing accounting, tax and compliance matters.
A limited company has the liability of its shareholders limited to what they have invested. This is the most common vehicle to do business in Thailand.
A limited company that has obtained privileges from the Board of Investment such as 100% foreign ownership, work permit facilitation and tax exemption.
US Treaty of Amity Company
A limited company registered under the US Treaty of Amity allows US citizens to hold the majority of the capital in businesses normally restricted to foreigners.
A representative office is an office established by a foreign company to conduct market research and other non-transactional operations.
A branch office is an ancillary place of business of a foreign company in Thailand that is treated as the same legal entity of its parent company.
A regional office is an office established by a foreign company to coordinate and oversee the operation of its affiliated entities in the region.
Regional Operating HQ (ROH)
A Regional Operating Headquarters is a legal entity providing managerial, technical, or other supporting services to its associated companies.
Question Before You Begin?
Speak to our expert by scheduling a free consultation on how to operate your company in Thailand.