Doing Business in Thailand

Bank of Thailand – Economy further contracted in April
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UN agency recommends health guidelines for airlines
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Government to boost domestic tourism in July
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Latest Destinations

Phuket, Thailand

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Major Cities and Serving Airports

Bangkok	Suvarnabhumi Airport (BKK)
Bangkok	Don Mueang Int Airport
Chiang Mai	Chiang Mai Int Airport
Phuket	Phuket Int Airport
Chiang Mai	Mae Fah Luang Int Airport
Hat Yei	Hat Yei Int Airport
For Flights & Information Click Here

At a Glance

Thailand is located in the centre of mainland South East Asia wholly within the tropics. It encompasses diverse ecosystems, including the hilly forested areas of the northern frontier, the fertile rice fields of the central plains, the broad plateau of the northeast, and the rugged coasts along the narrow southern peninsula.

Thailand formerly Siam, was primarily known towards the mid part of the 20^th century as an agricultural country, however in the 1960s increasing numbers of people started moving to more urban areas such as Bangkok, the capital, and to other prominent cities. Although the greater Bangkok remains the pre-eminent urban centre in the country, there are other sizable cities, such as Chiang Mai in the north, Nakhon Ratchasima (Khorat), Khon Kaen, and Udon Thani in the northeast, Pattaya in the southeast, and Hat Yai in the far south whilst islands such as Phuket have become popular places for tourists and ex-pats over recent years.

According to the World Bank, over the last four decades, Thailand has made remarkable progress in social and economic development, moving from a low-income to an upper-income country in less than a generation. As such, Thailand’s has been a widely cited development success story, with sustained strong growth and impressive poverty reduction.

Thailand’s economy grew at an average annual rate of 7.5% in the boom years of 1960-1996 and 5% during 1999-2005 following the Asian Financial Crisis. This growth created millions of jobs that helped pull millions of people out of poverty. Gains along multiple dimensions of welfare have been impressive: more children are now getting more years of education, and virtually everyone is now covered by health insurance while other forms of social security have expanded.

The economy of Thailand is dependent on exports, which accounts for more than two-thirds of the country’s gross domestic product (GDP). Thailand itself is a newly industrialized country, with a GDP of 16.316 trillion baht (US$505 billion) in 2018, the 8th largest economy of Asia, according to the World Bank. As of 2018, Thailand has an average inflation of 1.06% and an account surplus of 7.5% of the country’s GDP. The Thai economy is expected to post 3.8% growth in 2019. Its currency, the Thai Baht, ranked as the tenth most frequently used world payment currency in 2017.

The industrial and service sectors are the main sectors in the Thai gross domestic product, with the former accounting for 39.2 percent of GDP. Thailand’s agricultural sector produces 8.4 percent of GDP—lower than the trade and logistics and communication sectors, which account for 13.4 percent and 9.8 percent of GDP respectively. The construction and mining sector adds 4.3 percent to the country’s gross domestic product. Other service sectors (including the financial, education, and hotel and restaurant sectors) account for 24.9 percent of the country’s GDP. Telecommunications and trade in services are emerging as centers of industrial expansion and economic competitiveness.

Thailand is the second-largest economy in Southeast Asia, after Indonesia. Its per capita GDP (US$7,273.56) in 2018, however, ranks in the middle of Southeast Asian per capita GDP, after Singapore, Brunei, and Malaysia. In July 2018 Thailand held US$237.5 billion in international reserves, the second largest in Southeast Asia (after Singapore). Its surplus in the current account balance ranks tenth of the world, made US$37.898 billion to the country in 2018 Thailand ranks second in Southeast Asia in external trade volume, after Singapore.

Thailand has also joined the World Bank Group’s Partnership for Market Readiness, a global climate change alliance of more than 30 nations, to reduce greenhouse gas emissions and energy consumption. Thailand also received a grant of $3.6 million from the World Bank’s Forest Carbon Partnership Facility to manage and protect its forest.

If you are looking at investment then the easiest way to invest in Thailand is using exchange-traded funds or ETFs, which offer instant diversification in the U.S. traded security. With nearly $500 million in total net assets, the iShares MSCI Thailand Capped ETF (NYSE: THD) represents the most popular option for U.S.-based investors to gain exposure to the Thai economy.

The fund holds over 120 different securities weighted primarily in financials and energy, with its three largest holdings accounting for more than 20 percent of its portfolio. With an expense ratio of 0.62 percent, the ETF is cheaper than many actively managed mutual funds.

Investors should look at the fund’s equity beta, concentration risks, and other factors before adding it to a portfolio. Historically, international ETFs focused on emerging markets have had higher beta coefficients than domestic ETFs, which means that they may be riskier for investors.

Investors looking for more direct exposure may want to consider purchasing American depository receipts or ADRs, which are U.S.-traded securities representing foreign equities like those in Thailand. While they are not as diversified as ETFs, they represent a way for investors to purchase individual stocks to capitalize on more specific opportunities.

Popular Thailand ADRs include:

Siam Commercial Bank (SMUUY)
Advanced Info Service PCL (AVIFY)
Bangkok Bank (BKKLY)

Investors should keep in mind that ADRs may have less liquidity than their domestically traded counterparts on foreign exchanges. While the many UK and European ADRs have a lot of volume, emerging market ADRs—like Thailand’s ADRs—may have significantly greater liquidity risk. Investors may also have to build their portfolio of ADRs for well-rounded exposure, which can be challenging when dealing with emerging market companies.

Getting Around

With Thailand being such a beautiful scenic destination, it all comes down to personal preference when choosing how you want to see the country. Even when you are on business it is very difficult to not get distracted by some of the amazing cultural places to visit and enjoy during your trip. When you have some down time at the end of a busy business trip, then it may be time to join the locals and see Thailand as many other travellers do – through the local transport network.

Air
Thai (www.thaiairways.com) runs services to all major domestic destinations, including Phuket and Chiang Mai. Bangkok Airways (www.bangkokair.com) flies several additional routes including Ko Samui. Discounts are available during off-peak seasons and during special promotional periods. Orient Thai Airlines (www.flyorientthai.com) and Nok Air (www.nokair.co.th) also offer domestic flights.

Taxis
Getting around Bangkok by taxi is the easiest and most convenient, besides taking the BTS and MRT. Most taxis are new, spacious. They come in a lot of funky colours.

Finding a taxi is hassle free especially around places such as hotels, malls and tourist attractions.

The fares start at 35 baht for the first 2 kilometres and works it way up 2 baht at a time. Typical fare fr a few kilometres is 50 baht.

Overall, there is never a shortage of taxis but expect a long wait of it rains and during rush hour. In recent months ride hailing apps such as Grab have come into the market but are not overly publicized and nay be limited as to where they can pick up from.

Rail
Thailand’s train system connects the four corner of the country and is scenic, if slow but if you are spending a few days at the end of a business trip is well worth a try and is a good alternative to buses for the long journey north to Chiang Mai or south to Surat. The train is ideal for short trips from Bangkok where traffic is a consideration.

The network is run by State Railway of Thailand and covers four main lines. All long-distance trains originate from Bangkok’s Hualamphong Train Station.

Most stations have printed timetables in English.

Buses
Thailand has a very prolific and reliable network which is subsidized by the Thai Government called Baw Khaw Saw. All cities that are linked in Thailand by bus has a BKS station. The most reliable bus companies in Thailand operate out of BKS stations.

Visa & Immigration Policies

If you are looking to relocate to Thailand for work purposes, then these basic guidelines will help you.

First of all, you will need to have a Non-Immigrant Visa before being able to apply for a Work Permit. The Thai Work Permit can be granted to expatriates who satisfy any or most of the following conditions:

Working for an establishment with a registered capital of at least 2,000,000 Baht. One expatriate can be hired for every 2,000,000 Baht of capital but not more than 10 expatriates.
Working in an establishment, which has already paid income tax to the Revenue Department in the past 3 years not less than 5,000,000 Baht. For every 5,000,000 Baht tax payment is allowed to hire 1 expatriate.
Working for an establishment, which engages in export business and remit foreign currency of at least the equivalent of 3,000,000 Baht last year. For every 3,000,000 Baht, an establishment is allowed to hire 1 expatriate but not more than 3 expatriates.
Working in an establishment, which employs 50 Thai employees. An establishment is allowed to hire 1 expatriate for every 50 Thai employees but not more than 5 expatriates in total.
An expatriate who has an income and duty to pay personal income tax to the Revenue Department of equivalent or more than 18,000 Baht, or already paid personal income tax in the past year of equivalent or more than 18,000 Baht.

Setting up your own business in Thailand entails following certain legal precedents and could take several weeks. Take the burden out of this process by having a trusted lawyer communicate on your behalf. Having the best legal counsel assures that you avoid any unnecessary oversight and delays.

Listed below for your reference are the different Business Structures, and the steps necessary to forming a company.

Partnership

Thai and Western concepts of partnership are broadly similar. Thailand provides for three general types of partnerships: Unregistered ordinary partnerships, Registered ordinary partnerships and Limited partnerships.

Limited Companies

There are two types of limited companies, i.e., private or closely held companies, and public companies. The first is governed by the Civil and Commercial Code, the second by the Public Company Act.
Private Limited Companiesin Thailand have basic characteristics similar to those of Western corporations. A private limited company is formed through a process which leads to the registration of a Memorandum of Association (Articles of Incorporation) and Articles of Association (By-laws), as its constitutive documents.
A minimum of seven shareholders is required at all times. A private limited company may be wholly owned by aliens. However, in those activities reserved for Thai nationals, aliens’ participation is generally allowed up to a maximum of 49 percent. The registration fee for a private limited company is 5,500 baht per million baht of capital.
Public Limited Companiesregistered in Thailand may, subject to compliance with the prospectus, approval, and other requirements, offer shares, debentures and warrants to the public and may apply to have their securities listed on the Stock Exchange of Thailand (SET).
A minimum of 15 promoters is required for the formation and registration of the memorandum of association of a public limited company, and the promoters must hold their shares for a minimum of two years before they can be transferred. The Board of Directors of a public limited company must have a minimum of five members, at least half of Them are Thai nationals. The registration fee is 2,000 baht per million baht of capital for a public limited company.

Health & Safety

Healthcare in Thailand is overseen by the Ministry of Public Health (MOPH), along with several other non-ministerial government agencies. Thailand’s network of public hospitals provide universal healthcare to all Thai nationals through three government schemes. Private hospitals help complement the system, especially in Bangkok and large urban areas, and Thailand is among the world’s leading medical tourism destinations. However, access to medical care in rural areas still lags far behind that in the cities.

The country’s universal healthcare system provides an adequate level of care for over 95% of the resident population, though the system is not without its flaws. Along with the usual issues seen in public healthcare systems, such as long wait times for treatment, and overcrowded facilities, the Thai system also greatly limits the hospitals that people can use for public treatment. Each individual living in the country is assigned a main hospital where they should seek out their treatment if they want to get it for free, or at a very low cost.

For those that want to seek treatment outside of their assigned medical facility, there are options, but they do not come without a cost. If you don’t know already, it bears stating that Thailand is one of the world’s major medical tourism destinations. As such, many of the international hospitals found in the most urban parts of the country are well equipped to cater to preferences popular among westerners, and other citizens of developed nations. Some hospitals even have amenities consistent with those of a 5-star hotel!

By seeking treatment in private hospitals, especially those that cater to foreigners, a person can ensure they get the best quality of care Thailand has to offer. This is not only because the doctors found in such facilities are generally foreign trained with staff who can generally communicate with expats more effectively, but also because private hospitals tend to have superior medical technology, and equipment than their public counterparts. Due to these factors, expats in Thailand tend to prefer using pricey private hospitals for their medical care.

General safety in Thailand
Crime in Thailand is usually quite low compared to other international destinations, and violent crimes against foreigners are rare. However, crimes of opportunity can happen and require certain precautions. Petty crime is much the same as most urban cities and you need to vigilant for pickpockets and bag snatchers.

Chiang Mai
According to InternationalCitizens.com Thailand’s second-largest city, Chiang Mai is surrounded by nature. Foreigners love this city and there is a huge international community with more than 40,000 international citizens calling Chiang Mai home. The city has excellent healthcare facilities, community resources, and a low rate of violent crime. It was part of TripAdvisor’s “25 Best Destinations in the World” in 2014. It owes this honor to its mix of museums, restaurants, shopping, nightlife, and overall high quality of life.

Chiang Rai
Just 100 miles from Chiang Mai, Chiang Rai is a semi-rural small city retreat. It is extremely affordable and is surrounded by mountains, forests, and waterfalls. Residents have easy access to all the big city amenities that Chiang Mai has to offer. It is the perfect destination for expatriates who feel a bit overwhelmed by Chiang Mai’s size and congestion and prefer a quieter destination – without compromising on their well-being.

Crime rates, including petty crime like pickpocketing and scams, are low. Plus, Chiang Rai’s position near the mountains means that the city is naturally cooler than many of its neighbors.

Koh Samui
This gorgeous island has great connections with Bangkok and the rest of the country, but it feels removed from the hustle and bustle of the mainland. Koh Samui is laid back, family-friendly destination with a surprisingly strong infrastructure. There is a good selection of hospitals, pharmacies, and doctor offices. There is also a strong emphasis on the quality of living and outdoor pursuits, including cave exploration, yoga, and snorkeling, are all popular. However, on average, the rates of drug use and drug-related crime are higher in Koh Samui than areas like Chiang Rai.

Krabi
Often described as one of the safest places to live in Thailand, Krabi is a peaceful, secluded small town with beautiful beaches on the southwest coast of Thailand. The cost of living and crime rate is low and the number of amenities like cafes is high. The sense of community in Krabi is strong. It feels like everyone knows each other in the expat community, which is just a few thousand strong during the high season.

Hua Hin
A lot of international citizens describe Hua Hin as having all the best things in Bangkok with none of the bad. Over a hundred years ago, Hua Hin was a small fishing village. In the 1920s, Thailand’s royal family built a vacation home there. Today, Hua Hin still feels a bit like a mix of the two. It is like a genteel seaside fishing town that manages to comfortably cater to the elite without losing its down-to-earth charm.

This town is two and a half hours from Bangkok and locals have easy access to that city’s hospitals, health facilities, infrastructure, and resources. In fact, a satellite campus of the respected Bangkok Hospital recently opened in Hua Hin. Residents all enjoy all of this at a fraction of Bangkok’s crime rate, air pollution, and traffic congestion.

Bangkok
There is a lot about Bangkok that makes it a safe place to visit and live. There is a large, friendly, and diverse community of expats, digital nomads, and backpackers. In general, Bangkok is very accepting of all kinds of sexual orientations and gender identification. There is a large number of resources for women and families, along with hospitals, clinics, and health care specialists. And the affordable transit system, the high number of museums and art galleries, exceptional culinary scene, and even access to English bookstore makes it a destination that balances affordability with a high quality of life.

Thailand Board of Investment

Explore the many opportunities that are now available for investing in Thailand. Click here for further information

SANSIRI

The Land of Smiles is ready to welcome you. Check out our International Guide to owning a property in Thailand .Click here for further information

Doing Business in Thailand

Bank of Thailand – Economy further contracted in April

UN agency recommends health guidelines for airlines

Government to boost domestic tourism in July

Latest Destinations

Major Cities and Serving Airports

Thailand Board of Investment

SANSIRI

Business Travellers recommended partners to do business in Thailand