Start a Franchise Business in Thailand

Investors who wish to start a franchise business in Thailand have a number of options, ranging from fast food chains, fashion stores or businesses offering recreational services. Our Thai company formation agents assist investors interested in exploring the possibilities offered via a franchise option for doing business in the country.

The franchise business model is one that is advantageous both for the party selling the business license and for the party buying it. Compared to starting a new company, this option offers a higher degree of security for the business owner as he will rely on an already tested business model.

The franchise in Thailand

The franchise is a locally registered legal entity. Unlike the branch, it is not a direct extension of a foreign company. The franchise owner would have acquired the brand rights from the parent company, and would then proceed to operate their franchise independently, as a third party.

The fundamental distinctions between the branch and the franchise are relevant not only for company formation in Thailand, as they influence the general business registration process, but also in terms of investor protection. Our team that can help you open a company in Thailand, or become a franchisee, lists some of these important differences below:

• The branch is an extension of a foreign company. The parent, foreign legal entity is liable for its debts and obligations. The foreign legal entity that franchises is not liable in the same way for its Thai franchise;
• The Thai branch is managed by an appointed representative of the foreign company. The franchise is independently controlled by the franchisee. They can hire staff in Thailand and manage the business accordingly;
• The costs for the branch set up in Thailand are handled by the foreign company. The costs for the franchise set up are wholly or partly covered by the franchisee;
• The branch reporting requirements differ from those of the franchise. Our team of accountants in Thailand can provide more details on this upon request.

How to open a franchise in Thailand

A franchise is set up based on an agreement between the franchisor (a foreign company) and the franchisee (a natural or legal person). The former grants the latter the rights to use its trademark and know-how in exchange for a fee. To open a franchise in Thailand, the two parties will have to sign such an agreement. The specific of the contract may depend on the industry in which the company will operate.

Our team can help you open a company in Thailand that will be used by the franchisee (under which the franchise will operate). This will be a locally registered Thai company, which adheres to the current incorporation and taxation requirements.

Once the franchise is registered with the Thai authorities, it becomes liable for tax. Some of the corporate taxes in Thailand include:

• 20% general corporate income tax;
• 10% dividend withholding tax;
• 10% general VAT rate (currently reduced to 7% for a limited time).

Thailand is a country that encourages foreign investment. The Foreign Business Act is the main source of law for all rules and regulations concerning the process needed to open a company in Thailand by a foreigner. One of the most important provisions of this Act is that certain types of investments require prior approval.

Our team can help you open a franchise in Thailand by observing the ongoing requirements for this type of business. You can reach out to our Thai company formation agents for complete information about our incorporation packages and our pre- and post-registration services.

We invite you to watch a video about franchising in Thailand: 

Franchise opportunities in Thailand

Opening a new business implies several types of costs and in some business sectors, this decision has to include a number of business risks. When opening a franchise in Thailand, the franchisee (the one acquiring the business license) is not doing business by himself but rather has the support of an already tested business model and, depending on the franchisor, he will also have access to training and support.

Thailand is a country that offers a number of business opportunities for those who wish to buy a franchise. The advantage of this business model for the franchisor (the company selling the business license) is that it will have access to and will expand to a new market. Moreover, the franchisor will not be involved in the process of company formation in Thailand.

Franchising opportunities in Thailand include:

• fast food restaurants and international cuisine restaurants;
• fashion or cosmetic stores;
• cafes;
• beauty spas;
• cleaning agencies;
• real estate agencies;
• educational services and many others.

Some of these business fields will require special permits and licenses, and one of our agents who specializes in company registration in Thailand can help you. If you would like to open a branch in Thailand instead, our team can answer your questions and assist you throughout the process.

You can contact our agents who specialize in company formation in Thailand for detailed information about the conditions for investment.