Business in Thailand

Entrepreneurs and business people identify a need or problem in the market and embark on a journey to solve this problem or satisfy the need for a profit. One may also set up a business if they cannot find the quality of products or services they wanted or in the cases where the products and services already in the market are not affordable. This applies to all countries including Thailand. Setting up a business in Thailand requires the help of customs consultants who understand the laws and regulations on foreign companies in Thailand.

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Setting up a business in Thailand

If you are a foreigner seeking to set up business in Thailand, you must understand the laws and regulations to prevent penalties or jail terms. There are three main types of businesses that a foreigner can set up including Limited Partnerships, Representative office or branch and Limited Company. In a Limited Partnership one of the partner's liabilities are unlimited while the other's liabilities are limited. Registration for such a partnership is compulsory.

If you already have an international company, you can set up a representative office or branches within different parts of Thailand. However, this type of business is only permitted to carry out activities on behalf of the headquarters but not independently. A limited company on the other hand may either be private- with a minimum of three shareholders- or public- with a minimum of 15 shareholders. For a Public Limited Company, the board must have at least five members and half of them are required to be from Thailand.

Advantages of starting business in Thailand

Being the second largest economy in South East Asia, Thailand has a myriad of opportunities for business people. Having well developed infrastructure helps businesses in improving efficiency and minimising the cost of overheads. The large population readily provides skilled, semi-skilled and unskilled labour for use in different industries. The workers are affordable which ensures that the business can maintain lower costs of operations.

In addition to this, the government encourages foreign investment and has made it easier for foreigners to acquire permits and licenses for operating their businesses. In addition, the taxation is reasonable and graduated ranging between 10% and 30%. Proximity to Bangkok ensures that the business have access to other international markets through affordable and efficient transport. Goods from Thailand can be transported through a combination of air, sea and road transport modes to the United Kingdom and other countries.

Risks and disadvantages of setting up business in Thailand

International companies setting up a representative office or branch in Thailand are only restricted to a set of operations, which they are carrying out on behalf of their head office, beyond which they are contravening the law and they may face penalties and imprisonment. This restricts the expansion of the company even in the midst of opportunities. In addition to this, foreign companies may not be allowed to enter into certain industries unless an express exception has been issued by the government.

Although Thailand has a large population, language barriers may limit the extent to which the business can engage with the citizens either as employees or clients. The large private debts may also limit the consumption abilities of different households which means that business may not be at a position to maximise the utilisation of different opportunities. Moreover, the political climate is still a bit volatile and may therefore affect the business' operations.

Effect of Brexit on businesses

With slowed economic growth, businesses that have operations in the UK or that have constantly imported or exported products to the UK will also experience little or no growth in the medium term. Foreign direct investment from Britain and the UK to other markets such as Thailand will also reduce which will ultimately affect the GDP in these economies.

Some of the trade agreements with Britain will require to be reviewed and revised to reflect the new situation. The financial markets in Britain and the UK will likely slow down and the ripple effect will be felt all over the world with the extent of this effect being based on the nature and level of financial interdependence between Britain and the other countries.