This article is not about the legal procedures to open a business in Thailand as a foreigner, but rather about the pros of having a business here, as well as some of the most important issues investors should consider before business setup. If you are interested in the steps for company creation you can read about these here.
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What are the advantages for those who open a business in Thailand as a foreigner?
Thailand offers important advantages in terms of access to the ASEAN markets. Therefore, foreign investors who do business here enjoy the following:
- A strategic location in Asia to base a branch;
- A growing economy;
- Skilled workforce;
- Low operating costs;
- Full foreign ownership in certain business sectors and with a foreign business license.
Moreover, businesses are encouraged through various incentives, which can be detailed by our team.
| Quick Facts | |
|---|---|
| Entry requirements for EEA citizens | Visa on arrival is available for some citizens. Single-entry and multiple-entry visas are in place for tourism purposes. |
| Entry requirements for non-EEA citizens | Visa on arrival (depending on nationality), single-entry and multiple-entry visa. |
| Mandatory residency required to open a company in Thailand as a foreigner | Company owners are not conditioned to become residents, however, the company will require a resident director. Our team can give you more details. |
| Residency by investment scheme available | Under the long-term resident visa for investors and skilled professionals (subject to conditions) |
| Minimum investment amount for residency by investment (if applicable) | No formal minimum capital requirements when opening a business. |
| Relocation with family members for foreign investor residence permit holders | A maximum of 4 dependents per one visa holder |
| Types of companies available to foreign investors | Private limited company, public limited company, partnership, branch. |
| Full foreign ownership permitted | Possible with a foreign business license, however, restricted in some investment sectors. |
| Operation costs in Thailand | Company registration fees (can start at Baht 5,000 for the government registration fee), work permit fees payable by the employer, office costs (see below), other operational costs (see below). |
| Payroll costs in Thailand | 5% of the employee’s monthly salary payable by the employer (subject to a cap), in addition to other bonuses and the minimum monthly wage (see below). |
| Accounting costs (approx.) | 4,000 – 5,000 Baht per month for companies with few transactions. |
| Employment costs (minimum salary) | Minimum wage of 400 Baht per hour |
| Office rental costs (approx.) | 650 – 1,600 Baht per square meter in Central Lumpini, lower in other areas (starting at 500 Bath). |
| Number of companies incorporated each year (approx.) | More than 80,000 |
| Regulatory environment makes it easy to open a business in Thailand as a foreigner | Depending on industry |
How easy is it to do business in Thailand as a foreigner?
Investors who decide to start a business in Thailand as a foreigner enjoy several advantages when starting a business here, as previously mentioned. But how easy is it to do business in the country as a foreigner?
The following infographic offers a useful summary:
The World Bank, through its Ease of Doing Business Index, ranks countries according to how easy it is for foreign investors to start a business in a jurisdiction. According to the 2020 Index, Thailand occupied 21st place overall and had a score of 88 points.
The score is calculated according to several factors that also include how easy it is to start a business in Thailand as a foreigner. The country scored well in the following categories:
- Time required to open a business in Thailand: total score of 94.5 out of 100;
- Costs associated with starting a business: 98.5 out of 100 possible points;
- Average number of procedures for those who start a business in Thailand as a foreigner: 5;
- The mean time required to start a business in Thailand (approximate): 6 working days.
Please keep in mind that the approximate time and procedures depend on the correctness of the incorporation documents (so that no revisions are required). The approval of the foreign business license should also be taken into account.
A key issue to factor in for those who will open a business in Thailand as a foreigner is that they will be required to obtain proper business licenses and to enter the country based on a visa and residence permit that suits their purpose of stay.
We invite you to watch a short video on this topic:
What are some costs related to running a business in Thailand?
As in other jurisdictions, the costs required to open and run a business depend on several key factors, such as the size of the company and the number of its employees, the industry, and whether it provides services or manufactures products.
In Thailand, some of the main business-related costs are the following, presented by our experts:
- Office rental costs: these differ according to area, and office size however, an A-grade office can have a rent of THB 939 per square meter per month;
- Once the company is set up, foreign investors have access to accounting services that will allow them to maintain ongoing tax compliance. These can start at THB 15,000 per month (for a minimum number of transactions);
- Employee-related costs: the minimum wage varies per region. In Bangkok, it is currently set at THB 400 per day. Please keep in mind that this can be subject to change.
If you plan to open a business in Thailand as a foreigner, you should use the aforementioned costs for information purposes only.
Information on the steps required to open a business in Thailand, according to business form, can be found here.
Can I stay in Thailand as a foreign investor?
The Long-Term resident visa is suitable for foreign investors looking to open a business in Thailand. This visa aims to encourage investors, professionals, and experts to relocate to Thailand. It offers a ten-year residency option (subject to adequate renewal and continued compliance with the initial purpose for which it is granted).
Wealthy foreign investors who hold at least USD 1 million in assets and make an investment in Thailand of at least USD 500,000 are eligible for this visa. With the long-term resident visa for the wealthy global citizen category, the holder can make a direct investment in a Thai company. A key requirement is for the foreign investor to have already made the investment in the company before applying for the visa.
Alternatively, there is also the option to apply for the non-immigrant visa B (issued for business and work). With this visa, the foreigner will be allowed to undertake an investment activity in Thailand, provided that the intended purpose of stay is not permanent and that they have adequate resources to stay in Thailand.
Depending on your country of origin, you could open a business in Thailand as a foreigner under the non-immigrant visa “O-X” (long-stay) and remain in the country for a maximum period of 10 years. Japanese, Australians, Canadians, Americans, and nationals of other countries can apply for this visa if they are at least 50 years of age. Other conditions apply for having sufficient income.
Understanding the types of visas available to foreigners who are interested in Thai company formation is an important step for those traveling to the country/relocating here for business purposes.
Can your team help me open a business in Thailand?
Our team can help you open a company in Thailand and ensure compliance in two different, but equally important areas: firstly, corporate compliance through the fact that the incorporation stages will be handled according to the investment and business registration laws. Secondly, residence compliance, which is of utmost importance to international investors who are interested in remaining in Thailand for the purpose of running their business.
To open a business in Thailand as a foreigner, we recommend getting in touch with our local team that can help with representation in front of the Office of the Board of Investment (BOI). With our help (via a power of attorney entrusting our agent to make the submissions on your behalf), all the filings that are mandatory with the BOI will be taken care of accordingly.
Contact our team if you are ready to start a business in Thailand as a foreigner.