FAQ
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Investing in Thailand
There are government regulations regarding foreigners doing business in Thailand, such as the Foreign Business Act (FBA), which prohibits and restricts foreigners from operating in more than 40 categories of businesses unless they obtain a foreign business license or are otherwise exempted. You may also need to meet minimum capital requirements, obtain work permits and visas, and comply with tax laws and labor laws.
According to the Thai Foreign Business Act, a business in Thailand must be at least 51% owned by a Thai national. However, foreigners are allowed to register 100% foreign business ownership in Thailand, depending on the business activities and if your business receives a Foreign Business License (FBL).
Foreigners can hold the majority share of a company in Thailand if the business activities are not restricted by the FBA or if they obtain a FBL, a Board of Investment promotion, or a Treaty of Amity promotion .
There are some treaties between Thailand and China that may benefit your company, such as the ASEAN-China Free Trade Agreement (ACFTA), which eliminates tariffs on most goods and services between the two countries (L).
There is also a Memorandum of Understanding (MOU) between Thailand and Shenzhen to increase trade and assist small and medium enterprises (SMEs) in market expansion through cross-border e-commerce and high-quality economic and trade cooperation.
Foreign ownership of land is generally not allowed, so you may need to lease the land or set up a Thai nominee company to hold the land on your behalf.
To lease land in Thailand as a foreigner, you need to follow these steps:
BOI Privileges
The Board of Investment (BOI) of Thailand is a government agency that offers various benefits and incentives to investors who engage in BOI-approved projects. Some of the benefits include:
Support for research and development, such as grants and tax deductions.
According to the Thai Foreign Business Act, a business in Thailand must be at least 51% owned by a Thai national. However, foreigners are allowed to register 100% foreign business ownership in Thailand, depending on the business activities and if your business receives a Foreign Business License (FBL).
Foreigners can hold the majority share of a company in Thailand if the business activities are not restricted by the FBA or if they obtain a FBL, a Board of Investment promotion, or a Treaty of Amity promotion.
To apply for BOI privileges, you must submit an application form along with the required documents to the BOI. The application process may take from 40 to 60 days depending on the complexity of the project. You can also apply online through the e-Investment system.(L)
Foreign Business License
A Foreign Business License (FBL) is a license given to companies that are majority-owned by foreigners or foreign investors who wish to operate business activities that are restricted to foreign nationals under Thai law. These activities are classified into three lists:
To obtain an FBL, you must meet the following requirements:
You must also prepare the necessary documents, such as a business plan, company profile, financial statements, and other relevant documents. You must submit your application to the Department of Business Development (DBD) along with the government fee. The application process may take from three to six months depending on the type of business activity. (L)
Costs of Doing Business in Thailand
The costs of doing business in Thailand depend on various factors, such as the type, size, location, and sector of your business. Here are some average costs for reference (L):
The minimum wage in Thailand (As of June 30, 2023) ranges from 328 – 354 Baht per day depending on the provinces. The monthly salary ranges from 15,000 – 80,000 Baht across all occupations. The social security contribution is 5% of the salary for both employers and employees.
The average electricity tariff (As of June 30, 2023) ranges from 2.35 – 4.42 Baht per kilowatt-hour (kWh) for general service, the higher rate is applied when the total usage exceed the minimum kWh levels.
The average water tariff (As of June 30, 2023) ranges from 9.50 – 15.81 Baht per cubic meter for commercial use, the higher rate is based on total volume usage.
Please note that these rates vary based on size of the business, specific business services e.g., Non-profit organization and others.
The corporate income tax rate is 20% for corporations with net profits up to 300 million Baht and 23% for corporations with net profits exceeding 300 million Baht. The value-added tax rate is 7% for most goods and services.
Double taxation agreements exist with more than 60 countries to avoid or reduce double taxation on income derived from cross-border transactions.
The average gasoline price (As of June 30, 2023) for Gasohol 95 E-10, Gasohol 95 E-20, Gasohol 95 E-85 and Gasohol 91 are 39.3, 36.02, 36.09 and 38.03 Baht per liter, respectively.
The average diesel price (As of June 30, 2023) for Diesel B7, Diesel HSD and Diesel B20 are 29.97, 29.94 and 29.94 Baht per liter, respectively. The toll fees vary depending on the distance and type of vehicle.
The average ocean freight rate from Bangkok (As of October 31, 2023)
The average air freight rate from Bangkok (As of March 31, 2023)
The average office rent in Bangkok within Central Business District (CBD) area is approximately 535 – 1375 Baht per square meter per month (As of June 30, 2023). The rental expense could vary based on building grades, facility provided and distance towards public transportation, etc.
Rental for industrial property is quoted in Thai Baht on a square meter basis per month. Rents are normally paid monthly in advance. The normal practice is a security deposit equivalent to 3 months’ rental and 1 month’s rent in advance on the signing of the lease agreement. Nonetheless, rental rate varies based on location, area e.g., Eastern Economic Corridor (EEC), and structure of industrial property.
Typically, the rental is exclusive of management fee, government taxes and rates, lease agreements, and service agreement. (L).
Setting Up a Business in Thailand
To set up a business in Thailand, you need to follow these steps (L):
Factory License
To set up a business in Thailand, you need to follow these steps (L):
To apply for a factory license, you need to submit the following documents:
The application process may take from 40 to 60 days depending on the complexity of the project. You may also need to obtain other permits or approvals from relevant authorities depending on the type and location of your factory.
To transfer a factory operation permit, you need to submit an application form along with the original permit and supporting documents to the officials within 15 days of the transfer date5.
To renew a factory license, you need to submit an application form along with the original license and supporting documents to the officials at least 90 days before the expiration date.
Banking in Thailand
Banking in Thailand is regulated by the Bank of Thailand, which is the central bank and supervises all financial institutions in the country. There are over 30 licensed banks in Thailand, both local and foreign, offering various services to customers. (L)
To open a bank account in Thailand, you need to visit a branch of your chosen bank and provide the following documents:
Some banks may have additional requirements or restrictions for foreigners, such as having a Thai guarantor or a minimum balance. It is advisable to check with your bank before opening an account.
To transfer funds out of Thailand, you can use similar methods as transferring funds into Thailand. The fund can be transferred without limitation; the details depend on the regulations of each commercial bank where the recipient has opened a bank account in Thailand. However, you may need to obtain approval from the Bank of Thailand.
The sender must provide relevant information, identity verification documents that have not expired, supporting documents according to the purpose of transferring funds according to the BOT’s criteria in case of transferring funds abroad more than or equal to USD 50,000, etc.
You may also need to file a Foreign Exchange Transaction Form if the amount is more than $50,000 USD or equivalent. This form is evidence of remittance of foreign currency out of Thailand and specifies the purposes of transactions.
Visa and Work Permit
In some countries work visa may have the same meaning as a work permit, but not in Thailand. Foreigners may be confused and assume that once they have obtained a work visa, they can start working without having to go through other processes, and that is inaccurate. To work in Thailand legally, foreigners will need to have both a work visa and a work permit. These two are not interchangeable.
Thailand has different types of Work Visa for foreigners who want to work or invest in the country. Here are the five types of non-immigrant visas foreigners can apply for work or business-related purposes:
Acquiring one of the above-mentioned types of work visas will allow you to get a work permit in Thailand.
To apply for any of these visas, you need to contact the nearest Royal Thai Embassy or Consulate-General in your country and submit the required documents. You can find more information on their websites or on the official website of the Ministry of Foreign Affairs of Thailand.
The Smart Visa is a new type of visa specially designed to attract highly skilled professionals, investors, executives, and startup entrepreneurs who wish to work or invest in the S-Curve industries in Thailand. The Smart Visa holders will be granted maximum 4-year permission to stay, exemption from the work permit requirement, and other privileges. There are five categories of Smart Visa: T (Talent), I (Investor), E (Executive), S (Startup), and O (Other). Each category has different eligibility criteria and benefits. (L)
To apply for any of these visas, you need to contact the nearest Royal Thai Embassy or Consulate-General in your country and submit the required documents. You can find more information on their websites or on the official website of the Ministry of Foreign Affairs of Thailand.
A work permit is a Thai legal document that states the foreign worker’s position, occupation, and the company he or she is working with. To get a work permit the foreign worker must apply for a Non-Immigrant Visa Category “B” visa to enter Thailand and once it has approved, the foreign worker can begin the process of applying for a work permit. The Work Permit applications take about seven working days to process. (L)