Rapidly evolving as the business hub of Southeast Asia, Thailand is becoming one of the most preferable destinations to attract foreign direct investment. If you are planning to register your company in Thailand, then you must go through this article. This article will guide you comprehensively on the requirements of respective license to do business in Thailand.
We all know that simply registering a company can never serve your purpose of operating the same. To operate you will need relevant permits and licenses. In Thailand, the regulations are pretty stringent and non-adherence can lead to severe penalties. This article will serve well as your guide to knowing about the licenses that may be mandatory for your upcoming business in Thailand.
Do You Need a Business License in Thailand?
First of all, you must know whether the type of company or business you are going to set up in Thailand needs a business license or not. To ascertain these facts, check out the following pointer:
- Will you set up a company in Thailand or a branch or representative office of your existing business?
- What will be the “nature of business” and in which industry will you be doing it?
- Are you going to bring in foreign nationals to Thailand as your employees?
- Is your business eligible for relaxation under any bilateral treaty between your nation and Thailand?
- Have you checked about the Board of Investment Promotions in Thailand? Is your business eligible for any BOI Privileges?
Depending on your answers to the above questions, you can ascertain whether you need a business license in Thailand or not. However, it is always wise to consult with a reliable corporate law firm in Thailand to reach this decision. Remember that this is a statutory requirement and you must make an informed decision to prevent any type of penalties or fines in the future.
To make the process simpler, we have answered these questions comprehensively. This will help you have a basic understanding before you speak with any corporate lawyer in Thailand.
License Requirement based on your Business Structure in Thailand
Foreign investors can incorporate 6 types of business structures in Thailand. You should select a business structure that complies well with the nature and purpose of your business in Thailand.
For your information, almost all types of businesses in Thailand need a Foreign Business License. Foreign Investors must apply for a Foreign Business License in Thailand to start their business in Thailand as various business verticals are restricted for foreigners in Thailand.
However, if you are planning to start a representative office in Thailand, you need not apply for a Foreign Business License in Thailand. Furthermore, there are requirements based on the nature and industry of your business in Thailand that ascertain your license requirements.
Your Business Nature and Industry Finalizes Your License Requirements in Thailand
As talked about in the previous section, a Foreign Business License is mandatory for almost 99.9% foreign investors, unless, they plan to start their representative office. However, the nature and industry of your business invoke certain license requirements as follows:
Medical License
Starting a medical company in Thailand necessitates obtaining specific licenses. The type of license needed depends on the activities undertaken in the medical field.
If you plan to operate a service business like a rehabilitation center or nursing home, you must acquire a medical service business license from the Department of Health Service Support.
For medical manufacturing activities, if your factory has machinery totaling 50 or more horses or employs 50 or more people, you’ll need a Factory license from the Department of Industrial Works. If neither of these criteria is met, you should apply for a Business Establishment license from the Local Administration Organization.
Before conducting any clinical research, a Science Laboratory Capacity Certificate from the Department of Medical Science is mandatory.
Moreover, according to the Thai Drug Act Be 2510 (AD 1967), obtaining permission from the Food and Drug Administration (FDA) is essential before marketing medical equipment, pharmaceutical products, or medical food.
E-commerce License in Thailand
In Thailand, businesses that run one or more websites to sell goods or services must obtain an e-commerce license. The application can be submitted once the website is operational and requires the following details from the website owner:
- Name of the website
- Nature of goods or services sold on the website
- The date on which the website started operating (application should be made within 30 days from the start date)
- Method of payment for purchases
- Document evidencing the domain name registration or certification document from the service provider (ISP or web host)
Check out why you should start an e-commerce business in Thailand.
Licenses for Restaurants and Bars in Thailand
In Thailand, the licenses needed by a restaurant depend on the services it offers. However, some obligatory licenses are required by most restaurants.
These licenses include:
- Restaurant license: This license is a must for establishments with premises of at least 200 square meters. Thai eateries smaller than 200 square meters need a certification of notice.
- Liquor license: This license is required for restaurants serving alcoholic drinks on their premises.
- Music license: Restaurants with live music or any music playing on their premises must obtain this license.
All these licenses are granted for one year and must be renewed annually by the restaurant.
License for Financial Services Businesses in Thailand
In Thailand, companies aiming to provide financial services must secure specific licenses from the Bank of Thailand. These services include commercial banks, finance companies, credit finance companies, asset management companies, and e-payment channel services.
Furthermore, specialized financial institutions aligned with governmental policies fostering investment and economic growth within Thailand require additional authorization from the Ministry of Finance.
Import/export Licenses in Thailand
Certain import/export companies in Thailand require specific business permits based on the category of goods being traded. Specialized licenses are mandatory for importing controlled goods like food, medicines, and cosmetics from Thailand’s Food and Drugs Administration.
Additionally, a permit from the National Broadcasting Department is necessary for importing electronic devices like mobile phones. Finally, a customs paperless license from Thailand’s customs department is necessary for import/export companies to facilitate the movement of goods under their name.
License for Travel Agencies in Thailand
In Thailand, running a travel agency necessitates a Tourism Authority of Thailand-issued Tourism license. Without this license, there are prohibitions on arranging and selling tours and packages, booking accommodations, and distributing travel tickets.
The license is divided into three categories: inbound tourism (serving foreign visitors to Thailand), outbound tourism (catering to Thai travelers going abroad), and domestic tourism (serving Thai travelers within Thailand).
A majority of Thai ownership is necessary for travel agencies in Thailand, and a local director’s signature is mandatory to obtain the tourism license. Notably, there may be restrictions to the local director’s signing authority to matters directly related to the tourism license. This structure allows foreign shareholders to maintain control over other aspects of the business’s activities.
Education Business License in Thailand
When registering an education business in Thailand, a license and approval from the Ministry of Education or the Department of Social Welfare are essential prerequisites. The type of education offered by the business determines which authority must grant the approval.
Before starting an education business, you need to consider several key factors, such as the business premises and the legal structure of the company. Any deficiencies in addressing these elements correctly will lead to the rejection of the application for the required license.
Other Factors Confirming Requirements of License to do Businesses in Thailand
To bring in Foreign Workers to work for business in Thailand
Every foreign worker you bring into Thailand must hold a valid work permit to work for your company. It is your responsibility to facilitate the process of work permit issuance for your foreign employees. In the process, a valid commercial and business license is one of the mandatory documents for the same.
Bilateral Trade Treaty between Thailand and native nation of Investor
The need for a foreign business license is to permit foreign investors to undertake business activities that are normally only for Thais. However, certain bilateral trade treaties expand the scope of availability of business verticals in Thailand to the respective natives. Therefore, it is always advisable to check if your nation holds a bilateral treaty with Thailand and check the permitted business categories.
Eligibility to obtain Board of Investment Promotion in Thailand
Although a Board of Investment promotion never exempts the requirements to obtain any relevant license, yet, there are discounts on licensing fees. Therefore, if your business becomes eligible for BOI Promotion in Thailand, check if you are getting these benefits or not. This will reduce your setup cost significantly.
Business licensing in Thailand covers a wide range of considerations. You must avail the consultation of some reputed corporate lawyer or law firm in Thailand. To set up an appointment with us, email us your license requirements at [email protected].
