Land of Smiles, Thailand, is having a great potential to yield high ROI to Foreign Direct Investments. The diversity in business opportunities and the welcoming approach of the Royal Thai Government makes Thailand attract FDI. So, you are on the right track if you think to start a business in Thailand.
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. The primary ones are differences in registration policies and Thai trade regulations with certain sorts of discriminations for foreign business owners. This article is going to provide you with the guidelines essential for starting a business in Thailand.
Stages of Starting a Business in Thailand
You must know about the stages before the documentation and legal process commencement to start a business in Thailand. Adherence to the following stages with optimum diligence and dedication can create a fool-proof plan of business conveyance in Thailand.
Stage 1: Define Your Objectives
This is the primary and most important stage as all the stages which follow from here are the imprints of what you define. You must be clear about what you want to give to and take from your business in Thailand. Answers to the following list of questions can surely help you define your objectives in a clear way –
- What is my maximum investment potential or volume of total investment in the business? Be very true in defining this volume. This is the basic foundation.
- What will be your role in the business? You must know what YOU will do after starting the business.
- What is my expectation related to the payback period and return? Never attach any impractical or impossible expectations.
- What types of business should you consider to start in Thailand? Know your specialities and skills to answer this question.
- What are your preferred locations to start a business in Thailand? Do thorough research before answering this.
The above questionnaire can help you define your investment capacity. Additionally, it can create a projection of future returns. Moreover, it will guide you to select the type of business and its location in Thailand. You should take a note! Business in prime locations of Thailand promises a quicker and higher volume of returns than those in remote locations of the country.
In this stage, you must clearly define your business goals and target achievement timelines. Additionally, you must have a fool-proof and complete investment plan to start a business in Thailand. However, as you are going to start your business in a foreign land, a prejudice factor governs the risk. Therefore, you can never afford to make any mistake.
Stage 2: Research and Analysis
You are going to start your business in a totally new environment. Therefore, the primary research should be on the traditions, local practices and culture and etiquettes of Thailand. It is quite obvious that traditions and culture vary country-wise and you might not get many similarities of the Thai practices to that of your native country.
Now let us help you in getting a concise idea of the Thai business practices.
Communications
- You need to be very open and upfront in your communications. Thai people would prefer to develop a personal relationship with you before they go into any business relationship.
- “Wai” is the typical greeting in Thailand that involves placing your hands together in a prayer form and a slight bowing of your head.
- Use the term “Khun” before you address any superior as this term is similar to Mr., Mrs., Ms. or Miss. Always avoid speaking negative about Thai politics and mocking Thai people or places.
Business & Office Culture
- Thai people respect hierarchies and offer great respect to elders and seniors. So you must have a business card clearly mentioning your designation in the company to receive proper respect.
- Avoid black clothes in your business attires as those are considered only for funerals in Thailand. They accept bright and vibrant colours and if you prefer dark colours, go for shades of brown or grey. Normal business attire in Thailand comprises dark suits, white long-sleeve shirts and ties.
- Simple courtesies like holding doors open or offering to bring a drink for an event. These can be some of the easiest ways of ingratiating yourself with the Thai people and culture.
Social Culture
- Small gifts as tokens for starting a new contract or going for a new deal are highly appreciated by Thai people.
- A majority of the Thai population is Buddhists. Therefore, you should not take selfies or pictures with statues of Buddha and respect their culture and religious faiths and beliefs.
- If you are gifting or giving anything to a Thai person, always consider using both of your hands to do so as using one hand might be considered offensive.
- While eating, use a fork only to place the food on your spoon. Never eat using your fork as it is considered to be a bad dining etiquette in Thai culture.
These were a few of the lifestyle etiquettes to know before you start interacting with Thai people. After this, research for the best business spaces and local brokers in the respective regions. Brokers can suggest to you the list of most eligible businesses on sale.
Stage 3: Prepare Your Documents Well
Before Reaching Thailand
After Stage 2, you should now go for the documentation process. You should start the documentation process with the application of a non-immigrant Visa of the B category. This is if you are planning to travel alone to start a business in Thailand. Else you should apply for a non-immigrant O Visa at your nearest Thai Embassy or Consulate-General office. You must apply for the Visa 30 days prior to your planned departure for Thailand. For your Visa application, you must have the following documents –
- A valid Passport
- Visa Application Form
- Recent colour passport-sized photograph
- Thai Immigration Form and Departure Card TM.6
- Academic and Professional Testimonials
- Certificates or licenses held by the applicant
- Medical Fitness Certificate validated by a government medical practitioner
- Letter of Employment, Reference or Recommendation and Address Proof of Thailand
- Copies of additional licenses, if required.
Once you have the visa approval, leave for Thailand.
After Reaching Thailand
After landing in Thailand, apply for a work permit in the Thai Labor Office. Your work permit application must be enclosed with the following documents –
- 2 inches photo
- Medical Certificate
- Original Passport
- Letter of Employment/Reference/Recommendation
- Certificate of Degree
- Address in Thailand
The issue of a work permit generally takes 7 to 14 days from the date of application. However, on getting the approval, you have to appear in-person to a Thai Labor Department staff with your passport to sign the Thai Work Permit book. During your visit, the Labor department stamps the back of the passport of the applicant as a receipt.
Generally, a Thailand Business Visa provides a permit of a 90-days stay in the country. It has a validity of a maximum of 6 months. Therefore, you must apply for the renewal of the visa and Thailand work permit within these 90 days to continue your trade activities.
Stage 4: Set up your Business and Accounting framework
After getting the work permit, you are having all the rights to carry on the respective trade in Thailand. But before you start to trade, you should be conversant with the Thailand business policies. Additionally, you must know about the Labor laws very closely. This will help you to create a sustainable business environment and create a peaceful workplace for your employees.
Your business should follow an operational and accounting framework that must be stringently in adherence to the Thai standards. You can appoint some qualified accountant conversant in Thai Law. It would be great to 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 have created the domain for your business comprising of 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 and follow the Thai culture and traditions to get more involved with the locals. If you are good with the people, follow an ethical business process and have an honest and modest presentation, you will surely make bagfuls of profit from your business in Thailand.
