Thailand highly encourages foreign investment. Foreign nationals who invest in the country’s economy enjoy several perks that ordinary expats or tourists don’t usually get.
If you’re thinking of starting a business in Thailand, you might as well arm yourself with the necessary knowledge to make sure you’re always on the right track. You’re already in Thailand, so all you need to know at this point is the procedure that you will follow to make sure your venture is legal in the Kingdom.
Pick a Partner
Under the Foreign Business Act of 1999, foreigners are not allowed to own majority of a company’s share. That can only happen if you apply for an exemption with the Board of Investments. Alternatively, you can also apply for a foreign business license.
These are expensive avenues, although very practical in a business sense. For most, however, getting into a partnership with a Thai entrepreneur, or a group of entrepreneurs, is a good start in getting their business off the ground.
Thus, you will need the help of a local partner, or many of them. Take note, however, that you must be careful not to go into what they call the “nominee shareholder” scheme. In the past, companies have appointed people who are shareholders in name only while their foreign owners are the only ones with voting power in the enterprise.5
Nominee shareholders are illegal in Thailand, so don’t be tempted.
Pick the Type of Company to Register
There are three types of business structures that you can use to register your business. These are, namely: partnerships, limited companies, and joint ventures.
Most foreign businessmen opt for the limited company structure because it is easier and less expensive to setup. This is because of the Foreign Business Act limitation on foreign ownership. If a company is majority owned by Thais, there are fewer paperwork to file. This significantly reduces the amount of time required to get the business up and running, and reduces startup expenditures as well.
Even as a minority shareholder, you can still be appointed as a managing director and have the authority to manage your business as you see fit. If there are a number of Thai shareholders, their individual holdings might even be fewer than your controlling shares.
As a shareholder in a registered business in Thailand, you also have the perk of being able to buy real estate that is not a condominium in your name.
Know the Types of Visas to Apply For
Normally, the visa that most people apply for in their planning to start a business in Thailand is the Non-Immigrant B Visa. The single entry version has a validity of three months from date of application, while the multiple entry B Visa is good for one year.
Both allows you to apply for extensions should the need arises, as long as the visa remains valid. They are also valid for work permit applications.
Thailand has also launched the SMART Visa intended specifically for entrepreneurs or investors, like you. Unlike the B Visa, the SMART Visa lets you stay in Thailand for up to four years at a time, and waives the work permit requirements.