Thailand is an attractive destination to do business for foreign investors, thanks to its government initiatives. Here is what you can expect when it comes to setting up a company in the country.
With a population of 69 million people, a steadily-growing economy and business-friendly policies, Thailand is an attractive destination for foreign investors and multinational corporations (MNCs).
According to the Work Bank's Doing Business Report 2019, Thailand is ranked 27th out of 190 countries surveyed when measured by ease of regulation – a slight drop from 26th place in 2017. According to the 31 October 2018 report, Thailand reached a score of 78.45, up from 77.39 last year, meaning Thailand remains in the top 30 of 190 economies in the Ease of Doing Business ranking.
Thailand's improvement is largely due to the government's consistent efforts to improve both the regulatory environment and business incentives.
Starting a business in Thailand is easier than ever
Foreign investors and MNCs are in favour of Thailand's e-Registration system, a new initiative by the Department of Business Development. The new system means they no longer have to go through the conventional registration process, which involves submitting work rules and regulations or an official seal registration certificate.
Moving forward, foreign businesses can appoint a representative to act on their behalf to register their businesses in Thailand. They also can choose to pay via various channels, and put together, these tweaks make the procedure more flexible. The registration of a company has been made less costly: the registration fee has been reduced to the fixed fee of THB 5,500.
The Thai government is planning to revise the Bangkok Act for Construction Permit Applications (1982), to reduce the inspection processes to only three stages, and also reduce the permit issuance timeline to only 10 days.
If this is successfully implemented, it will be a huge win for businesses – especially foreign manufacturers – as they can expect to get approval from the authority before building their plants in Thailand.
Export and imports in Thailand
The Thai government has established a standard of custom operations and a "related procedures framework", in line with the World Trade Organisation and World Customs Organisation's standards.
A mutual recognition agreement (MRA) was established between Thailand and its regional partner countries to share the benefits of the Authorized Economic Operator standards. These grant a special privileges programme to entrepreneurs.
The Thai government has also completed several new initiatives such as the Tariff Valuation and Rules of Origin rules, e-Tariff service and anti IUU Fishing application.
The net effect of all this, is that Thailand is now a simpler country to import to, and export from.
Thailand has undergone several transformations to improve its tax system - not least by making filing online easier. This is a further step to ease administration for hard-pressed international businesses.
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These impressive enhancements are part of Thailand's plan to attract more investors. But while the country is simpler and more attractive, any country-specific compliance requirements can be an unwanted headache for foreign business people.
TMF Thailand can take the pain away, by providing local compliance, accounting, tax, HR and payroll services and insight; allowing you to concentrate on running your business.
Want to know more? Contact us today.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.