Land of Smiles, Thailand, is having great potential to yield high ROI to Foreign Direct Investments. It is the diversity in business opportunities and the welcoming approach of the Royal Thai Government that makes it the most sought for country to invest in a business in the world. So, if you are thinking of starting a business in Thailand, you are on the right track to multiply your investments.
Principles of Thai Business Culture
- As The Kingdom of Thailand has never been colonized, it is having the least influence on Western Culture.
- Thai Business culture follows “Sanuk”, i.e., achieve satisfaction in whatever you do and make a maximum from the situation.
- Thai people follow the “Mai Pen Rai” or “Never Mind” concept characterizing a general focus on life and approach to business.
- Hierarchies define not just the working environment but Thai society as a whole.
- Thais do not tend to challenge the hierarchical structure and consequently do not question decisions coming from senior management.
- Personal relationships are keys to a successful deal in Thailand and the level of closeness with Thai professionals may take precedence over the offer.
- The concept of ‘face’ is also crucial in business interactions, as people seek to maintain their reputation and those of their business and others.
- Foreigners should avoid embarrassing situations or putting their Thai counterparts in a difficult position.
First Contact or Introduction
- Appointments for formal business meetings should be made well in advance with a written invitation that is often followed up by a phone call.
- It is also a good idea to reconfirm the meeting the day before the arranged day. Due to the difficulty of traveling around large Thai cities, you should not schedule more than two meetings a day.
- It is advisable to schedule meetings between November and March. Most Thai business people go on holiday in April and May when there are many Buddhist holidays.
- Thais, especially those who have not studied abroad, tend to not be very proficient in English; therefore it is a good idea to check whether an interpreter will be necessary.
Greetings and Titles
- Wai is the most common form of greeting in Thailand for both men and women and applies both to professional and social encounters.
- The Wai gesture is performed by placing the palms of the hands together, raising them to the face with the fingertips at eye level, and inclining the head slightly.
- There is a great formality in the “wai” and the level at which the hands are placed has great significance.
- Foreign business contacts are not expected to initiate a “wai”, but it is an insult not to return the wai.
- If a wai is not offered, it is appropriate to shake hands with men and nod to women.
- Alternatively, a Thai professional could simply extend their hand instead of offering a wai gesture.
- Wai gestures are offered to a person of equal or greater status, whereas, subordinates should offer a wai first.
Dress Code
- While business attire is not strictly formal, it is important to wear a suitable outfit that will allow you to be taken seriously by Thai business partners.
- Conservative-colored suits with shirts and ties are appropriate for men. Jackets are not a must but are good to have, especially for meetings with senior partners.
- Long trousers or a skirt that covers the knees and a blouse or shirt are appropriate for women. You should avoid tight-fitting and sleeveless attire.
- You should take off shoes in offices and most homes. Therefore, it is a good idea to wear shoes that are easy to slip on and off.
- Smart casual is acceptable for business entertaining events.
Greetings, Titles, and Gifts
- Wai is the most common form of greeting in Thailand for both men and women and applies both to professional and social encounters.
- Thai corporates often address one another by their first names and titles. Whereas, surnames are for very formal occasions and written communications.
- “Khun” precedes Thai first names, unless they carry an academic title, such as a doctor. Khun is used for men and women, married or single.
- During the introduction or when greeting someone, men say “Sawatdee-krap” and women say “Sawatdee-kah”.
- Introduce people in order of seniority. For instance, you should introduce a secretary before her boss.
- It is advisable to bring a gift from your home country. Shareable gifts, including fruits, sweets, or snacks, are recommended, as every attendee in a meeting should be able to receive part of your gift.
- Receive or give gifts with the right hand and a wai gesture (place your hands in front, as if in prayer, and bow your head to the point where your nose touches your thumb).
- Never open gifts in front of the giver.
Meetings Management
- As the first meeting usually serves the purpose of establishing rapport. Henceforth, they arrive at important decisions only after subsequent meetings.
- Thais expect small talks before meetings and they take it rude to directly delve into negotiations.
- Status, connections, and power are more important than content in negotiations. Thai people respect foreign business people with strong connections in the country and are more willing to accept their offers.
- While Thailand has a pro-business attitude, they arrive at decisions quite slowly. They do so only after several meetings have taken place with more senior partners. Thus, it is important to remain patient.
- You must avoid pressure tactics. Planning is usually short-term. Therefore it is a good idea to emphasize the immediate benefits of the offer.
Communication and Gestures
- Thais do not prefer direct communication and are unlikely to openly say ‘no’ to offers. They tend to give vague answers to remain courteous and expect foreigners to be subtle as well, especially when responding with a negative reply.
- Thai people are good listeners and will rarely interrupt a speaker. Foreigners should also avoid interrupting Thais when speaking.
- Moments of silence are common as responses are careful consideration and foreigners should not appear too hasty to get an answer.
- It is important for foreigners not to put their hands in their pockets while talking to someone.
- Waving hands while talking must be avoided, as this gives Thais the impression that the person is angry.
Your Take!
If you are to start a business in Thailand, it will need greater caution than starting your own. There are various reasons to logically support this point and the primary ones are differences in registration policies and Thai trade regulations which have certain sorts of discrimination against foreign business owners.
Your business should follow an operational and accounting framework that must be stringently in adherence to Thai standards. You can appoint some qualified accountant conversant in Thai Law or hire a Thai accounting team to take care of the entire operations. Accounting operations like half-yearly or annual account audit, corporate income tax filing, bookkeeping, tax audit, payroll management, and tax return filing needs specialized Thai accounting professionals for error-free activities.
Now as you know the domain for your business comprising all the essential operational, accounting, and legal frameworks, you are all set to start your business in Thailand. Always adhere to noble business practices in accordance with the Thai legal framework. Moreover, you must follow Thai culture and traditions to get more involved with the locals. If you are good with people, follow ethical business processes, and have an honest and modest presentation. By this, you will surely make a bagful of profit from your business in Thailand.
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