Top 10 Reasons To Start A Business In Thailand
In recent years more and more international companies have looked into opening a branch in Thailand, while independent traders and other business people have also decided to start a business in Thailand.
Here is an overview of some of the many factors that make Thailand the best country to start a business.
People who are planning to start a business in Asia will quickly discover that Thailand is one of the best countries in the whole of Asia to establish and business and make important connections.
Thailand is one of the original Tiger Economies and the nation experienced an impressive growth spurt in the early 1990s. Thailand is blessed with rich natural resources that include timber such as highly valuable teakwood, a wide range of different types of precious stones and fisheries.
The nation is one of the biggest rice exporters in the world, tourism, textiles, jewellery and electrical appliances are also major products. A magnificent sixty percent of Thailand’s GDP is made up of exports and different products that are made in Thailand are exported all over the world.
Now you will discover why start a business in Thailand is a good idea:
- 1 1. Working Hours and Wages in Thailand
- 2 2. Thailand’s Population
- 3 3. The Gateway to Asia
- 4 4. Business Language
- 5 5. Thailand’s Growing Economy
- 6 6. FDI Policies in Thailand
- 7 7. Government Support and Incentives for Foreign Investors
- 8 8. Long Established and Newly Emerging Industries
- 9 9. Education and Healthcare Services
- 10 10. Strong Corporate Governance
- 11 Start a business in Thailand Infographic
- 12 The Mercer 2015 Cost of Living Survey
- 13 Thailand is Highly Ranked by International Organisations
- 14 2015 Business Traveller Asia Pacific Awards
- 15 Key Advantages of Living and Working in Thailand at a Glance.
- 16 The Importance of Working with a Business Startup Consultant in Thailand
1. Working Hours and Wages in Thailand
One of the things that makes starting a business a viable option for international companies is the relatively low wages that have to be paid compared to in the Western world.
Naturally, the minimum daily wage varies according to skill and experience, although the starting salary for most labourers if around $8.5 a day.
The maximum number of work hours per day is eight, while employees are permitted to work up to 48 hours per week.
Employees are permitted to work more than this as long as they are fairly compensated for their extra time and overtime compensation is paid at a rate of between one and a half to three times the usual hourly rate. However, average companies operate on a 8 hrs, 5 Days a week schedules.
Employees who work in a company in Thailand are entitled to minimum thirteen national holidays each year as well as a minimum of six days of holiday or annual leave after one year of consecutive work.
Thirty annual paid sick days is standard for employees in Thailand and an employer may ask the employee to provide a doctor’s certificate for sick leave of three days or more. Female employees are entitled to ninety days of maternity leave, which includes 45 days of paid leave.
2. Thailand’s Population
There are more than 68 million people living in Thailand and the population is comprised of various different ethnic minorities including Indian, Cambodia, Lao and Chinese people.
One of the main advantages for people who want to start a business in Thailand is that these different minorities bring different skills into play and there are plenty of people with skills that are desirable among all different types of companies.
The population of Thailand represents 1.01 percent of the world´s total population which arguably means that one person in every 100 people on the planet is a resident of Thailand.
3. The Gateway to Asia
One of the best things about to start a business in Thailand is that Thailand has an strategic location and serves as a gateway into the heart of Asia, which is home to the largest growing economic market in the modern world.
Thailand also offers convenient trade with China, India and the countries of the newly formed Association of Southeast Asian Nations, which is commonly known as ASEAN. People who set up a company in Thailand will also have easy access to the Greater Mekong sub-region, where newly emerging markets offer great potential for doing business in Thailand.
Thailand was foresighted enough to be one of the founding members of ASEAN and has been active in the formation and development of the ASEAN Free Trade Area, which is commonly known as AFTA. AFTA entered into force on January 1st of 2010 for the six original ASEAN (ASEAN-6) members, which were comprised of Thailand, Singapore, Malaysia, Indonesia, Philippines and Brunei, thereby reducing the import duties that the country had to pay to zero.
Thailand is perfectly placed at the crossroads of Asia and offers easy access to the region’s dynamic markets, including its own booming domestic consumer market of more than 68 million people.
Thailand has long been an advocate of free and fair trade and it is very attractiveness as a production base for leading international companies that is enhanced by a number of free trade agreements.
At the start of 2016 it became clear that Thailand a major beneficiary of the ASEAN Economic Community, known as AEC for short, which has helped Thailand to gain an even stronger foothold on the business chain throughout Asia. Read more about the ASEAN Advantage
4. Business Language
Most of the major universities in Thailand teach business English, which makes finding Thai employees who have the skills to do business and communicate clearly in English relatively easy.
Chinese and Japanese are also taught in many schools, while the number of graduates who have at least a working understanding of German and French is rapidly increasing.
This makes doing business with other countries a lot easier and there is increasing demand for students to study business both in college and university.
Having said that, language barrier still prevails to a large extent. Apart from the upper mid-top management people, the rest of any organization speaks Thai language only, making it often difficult for foreign companies to interact freely.
However, consulting companies like Startup in Thailand assist in bridging this gap and provide 360 degree service support to foreigners so that they can be successful in Thailand.
5. Thailand’s Growing Economy
Economically, Thailand is characterized by steady growth, strong exports and a vibrant domestic consumer market. Abundant natural resources and a skilled and cost effective work force all help to attract foreign investors and enable them to prosper and develop industry in Thailand.
In addition to a growing highway system that now connects not only every province in Thailand, but also to the neighbouring nations of Laos, Cambodia, Malaysia, Burma and Vietnam, Thailand also offers:
- Seven prominent international airports
- Modern city wide mass transit in Bangkok
- 4G/Wi-Fi and broadband access throughout the country
- Six deep sea ports and two international river ports, including containers, tank farms and liquid jetties
Thailand’s development plans for the coming decade include a high speed rail network that will connect Bangkok with the north, south, east and west of Thailand, as well as to southern China.
The mass transit system in Bangkok has already been expanded far into the suburbs with more connections to other parts of the city in the pipeline and air and marine transportation will be further strengthened to meet the pace of growing demand.
6. FDI Policies in Thailand
Thailand’s well defined business investment policies focus on liberalization and encourages free trade throughout the nation and with other countries.
Foreign business investments in Thailand, especially those that contribute to the development of skills, technology and innovation are actively promoted by the government.
Thailand consistently ranks among the most attractive investment locations in the world in international surveys, and the World Bank’s Ease of Doing Business 2016 report places Thailand as the 49th easiest country in the world and the second ranked emerging economy in Southeast Asia in which to do business.
The United Nations Conference on Trade and development, which is commonly known as UNCTAD, ranks Thailand as the 8th most attractive host economy in the world for 2014-2016.
7. Government Support and Incentives for Foreign Investors
The Thailand Board of Investment (BOI) offers investors a wide range of different tax incentives as well as support services and import duty exemptions or reductions for activities that meet the national development objectives.
Companies that are able to receive investment promotion privileges from the Board of Investment(BOI) are not subject to foreign equity restrictions in the manufacturing sector and there are no local content requirements or export requirements due to the fact that Thailand’s investment regime is in complete compliance with WTO regulations.
The Board of Investment also coordinates the activity of the One Stop Service Centre for Visas and Work Permits, which makes it possible for foreign staff of BOI promoted companies to obtain work permits and long term visas within three hours or less.
In addition, administers the One Start One Stop Investment Centre are able to facilitate a full range of services and streamline investment procedures by bringing representatives from more than twenty different government agencies under one roof.
In addition to the activities of the BOI, other government organisations such as the Department of Export Promotion and international chambers of commerce provide people who are starting a business in Thailand with essential support and a whole host of other important services.
8. Long Established and Newly Emerging Industries
With a steady economic development and strong support industries, industrial production throughout Thailand has grown and diversified rapidly both in long established and newly emerging industries.
The government has identified a total of fifteen activities that are classified as activities of special importance and benefit to the country.
These activities are economic forest plantations with the exception of eucalyptus, creative product design and development centres, manufacture of airframes, airframe parts and major aircraft appliances, engines, aircraft parts, propellers and avionics, Electronic design, Software, Production of electricity or steam power from waste or refuse-derived fuel; Energy Service Companies commonly known as ESCO, industrial zones or technology industrial zones, Cloud services, Research and Development, Biotechnology, Engineering design, Scientific laboratories, Calibration services, Vocational training centers.
Projects that are founded around these activities will be granted corporate income tax exemption without being subject to a corporate income tax exemption cap.
9. Education and Healthcare Services
The education standards in Thailand are accepted by many international examining bodies and there are a large number of international schools and colleges in Thailand that offer world class education, while the leading universities in the country constantly rank among the best in Asia.
In terms of healthcare, Thailand has developed an excellent reputation globally due to its internationally certified doctors and medical staff, and modern facilities and equipment.
Most major cities and other prominent destinations in Thailand boast international hospitals where patients can receive Western style care for a fraction of Western prices.
In fact, one of the fastest rising tourism sectors in Thailand is medical tourism, with international patients visiting Thailand to take advantage of the nation’s world class and extremely affordable health care system. One of the reputed companies, Travel Motivations can help you to know more about the medical tourism and how they can assist you to provide a comprehensive medical package combining all logistics and medical support.
10. Strong Corporate Governance
Thailand is recognized as being a leader in corporate governance and is applying similar principles to the public sector in order to enhance transparency and accountability.
In the Asia Corporate Governance Association’s seventh joint report that was issued with CLSA on corporate governance in Asia, the in depth 200 page report ranks 11 Asian markets on macro CG quality and 944 companies on their internal governance systems. Thailand ranks fourth, which is an impressive achievement for a nation of its size and location.
Start a business in Thailand Infographic
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The Mercer 2015 Cost of Living Survey
The Mercer Human Resource Consulting Cost of Living Survey Worldwide Rankings 2015 showed that the city of Bangkok in Thailand received a ranking of number 45.
This indicates that Bangkok’s cost of living was significantly lower than Singapore, which is ranked as being the 4th most expensive city in the world, Hong Kong, which is ranked number 2, Beijing at number 7, Shanghai at number 6, Seoul at number 8 and a large number of other major cities in Asia.
Thailand is Highly Ranked by International Organisations
Every year, the World Bank conducts a study of the ease of doing business in various different countries around the world.
The World Bank produces an annual report that looks at domestic and medium sized enterprises and the quantitatively measures regulations that effect them, covering nine indicators for 189 economies.
Ease of Doing Business in 2016 ranked Thailand number 49 in the world, and number 2 among the emerging economies in East Asia.
For many years Thailand has been among the most successful countries in Asia for attracting Foreign Direct Investment, which is commonly known as FDI.
In the ever competitive investment environment that characterizes the 21st century, Thailand has continued to remain attractive to foreign investors.
For more than three decades, successive Thai governments have recognized that the private sector in Thailand has been the main facilitator of growth and the government has actively played a promoting and supporting role.
The Thai government has taken a consistently favorable stance towards foreign investors, recognizing their importance to Thailand’s economic and technological development.
In fact, government approval to invest in Thailand is not even needed unless the special incentives offered by the Board of Investment are being applied for and most sectors of the Thai economy are open to foreign investors.
The combination of factors and the continued efforts of government agencies to reduce so-called red-tape and facilitate investors has led to Thailand being among the highest ranked countries for FDI by independent observers, as well as by foreign investors.
In addition, in its 2014 World Investment Report, the United Nations Conference on Trade and Development, which is known as UNCTAD for short, ranked Thailand the 8th best FDI host economy in the world for 2014-2016
When the internationally respected Bloomberg News asked Multinational Companies (MNCs) to select the most promising emerging nations in which to invest in 2015, Thailand ranked as the 11th most promising emerging market for 2014-2016.
Thailand consistently ranks highly in the world for various elements of business and infrastructure in Thailand is recognized as being the world’s:
- 31st biggest economy
- 22nd biggest economy by purchasing power
- 24th biggest exporter
- 16th largest manufacturing output
- 34th largest services output
- 11th largest agriculture output
- 25th largest industrial outputIn addition, in 2014, Thailand was recorded as being:
- The world’s leading rice exporter in terms of quantity
- The world’s second biggest pineapple exporter
- The world’s second biggest sugar exporter
- The world’s leading cassava exporter
- The world’s leading rubber exporter
- The world’s sixth largest rubber tires exports in terms of value
- The world’s seventh largest computer device exports in terms of value
- The world’s ninth largest computer accessories exports in terms of value
- The world’s seventh largest motorcycle exports in terms of value
- The world’s fifth largest truck exports in terms of value
- The world’s largest producer of HDD
2015 Business Traveller Asia Pacific Awards
In its 2015 Business Traveler Asia Pacific Awards, the readers of Business Traveler ranked Bangkok the Best Leisure Destination in Asia-Pacific and the second highest ranking for Best Business City in Southeast Asia.
Key Advantages of Living and Working in Thailand at a Glance.
Many people who decide to start a company in Thailand do so because they are following their hearts and want to settle in this stunning country.
Here are some of the many things that make living in Thailand so special.
- Impressive scenery including gorgeous tropical islands, jungles to explore and vibrant cities
- Delicious cuisine
- Vibrant nightlife scene
- Excellent shopping opportunities
- The famous Thai hospitality
- Good infrastructure
- Good access to talented Thai and foreign workers
- Modern office spaces and equipment available
- Excellent opportunities for connecting with local and foreign businesses
- Great networking opportunities in various parts of the country
- Excellent healthcare system and high quality of life
The Importance of Working with a Business Startup Consultant in Thailand
Foreigners who are planning to start a business in Thailand may find that there are several hurdles that need to be overcome before they are ready to start business.
These include the fact that obtaining a work permit in Thailand is far from easy and it is essential to pay for professional legal services to help cut through the red tape.
Many sectors are reserved for work by Thai nationals alone, so foreigners are restricted in the types of business they can run, so legal assistance can be sought on how to incorporate a business in Thailand. A boutique business
Working with a professional, boutique business consulting company such as Startup in Thailand can help to smooth the way and the experts can help to define the things that need to be overcome and provide the knowledge and knowhow to make this much easier.
They are the only company in Thailand to provide a single window solution for all business startup and expansion requirements under one roof : Startup | Market Entry | Legal | Serviced Office | Factory Setup | Representation | Recruitment |Accounting | Operations | Sourcing | Buying | Distribution | Marketing | Regional Business Development | Management
Author :Andy Aditya
As Business Startup Specialist, Andy is often hired as a consultant by his clients for being their Man Friday in Thailand/Asia to assist Business Owners who need support to Startup, Build and Promote their businesses in the region.
He has been an accomplished executive with a high-caliber in general management skills gained through hands-on experience in core business functions like strategic planning & operations, sales & marketing, international business & sourcing, product development & branding and financial & employee management.
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