Starting a Business in Thailand

With the actual economical crisis, covid, people working from home, I see more and more foreigners starting a business in Thailand. They should be careful as starting a business here, or anywhere else, is not necessary easy. It might even be more difficult for a foreigner to start a business here because of the culture, the language and the laws.The following article is just some personal remarks to anyone wishing to start a business in Thailand. They come for my personal experience or what I’ve seen around me.

Written in 2009 and modified in May 2022 by Sebastien H. Brousseau, LL.B., BSc. manager of www.thailawonline.com

All pictures below are my old office, taken by myself.

A) Make a research before starting a business in Thailand

Too many people are starting the same kind of businesses: restaurant, hotel, massage parlor, diving, etc. Remember that Thai salaries can be very low. Therefore, if they can copy you, they might be able to make the same products for a better price. Look around people having a successful business here: they probably have something different, use their own skills, invest time and money and probably work much more than you can think.

Many entrepreneurs gravitate towards the same business types: restaurants, hotels, massage parlors, diving schools, and so on. Given the typically lower Thai salaries, if locals can replicate your idea, they might produce the same offerings at a more competitive price. Successful businesses in Thailand usually stand out—they’re unique, leverage the owner’s skills, require significant investment (both time and money), and often involve more work than one might assume.

Your research should encompass identifying the ideal legal structure for your enterprise. Will it be under your Thai spouse’s name, a partnership, or a Thai limited company? Consider staff requirements, where to source them, your investment size, and potential obstacles. Previous failed attempts at your idea are worth noting. Comprehensive research may be time-consuming, but it’s invaluable.

Determine if you’ll merely be an investor or an actively involved business manager. A casual approach or treating your business as a side hobby can lead to swift financial losses. A robust managerial presence is crucial for overseeing employees, product quality, marketing, and overall business operations.

B) Consider a Thai Partner

While not obligatory, having a Thai partner can be beneficial depending on your business’s scale. Certain business activities are restricted for foreigners in Thailand. A local partner might provide access to opportunities that would otherwise be inaccessible. Your ideal Thai partner might not necessarily be your spouse.

Remember, foreigners in Thailand face several constraints:

   • Foreigners needs a visa is required for an extended stay.

   • A work permit is also essential for employment (with some exceptions).

   • Direct land ownership is usually off-limits.

   • Foreign Business ownership has also its limitations.

A trustworthy Thai partner can streamline your business integration in the country.

C) Ensure Adequate Funding

Sufficient capital is paramount. Many businesses fold within their first year due to underfunding. Your inaugural year could be financially challenging, potentially demanding additional investments for unforeseen expenses. Therefore, a detailed business plan and a first-year budget are essential. 

If your funds are limited, start modestly. Minimize costs where possible: consider partnerships, shared expenses, or renting equipment. A crucial rule of thumb in Thailand: only invest what you’re prepared to lose.

D) Prioritize Marketing

Your marketing strategy could make or break your venture. How do you plan to promote your business? Who is your target audience, and how can you engage them cost-effectively? I’m acquainted with a business owner who lacks even basic marketing tools like a website or phone number. Despite his advertising investments, his lack of dedicated effort might spell its downfall.

E) Understand Legal Aspects

There are various contractual agreements to consider. For instance, if leasing space, ensure lease renewal provisions are favorable. If hiring, non-compete clauses might prevent employees from poaching clients or ideas. Decide between hiring full-time employees and handling their tax and social security obligations or working contractually.

In conclusion, starting a business in Thailand isn’t a decision to take lightly. For those committed to long-term success, forward-thinking and thorough preparation are imperative. If you’re serious about succeeding, ponder the future and the steps needed to ensure it.

PS: Should you wish to find information about business in Thailand, ThaiLawOnline have helped hundreds of expat to start successful business in Thailand. Do not hesitate to consult us. Bookings are in the contact section.