Doing Business in Bangkok

Following the Asian financial depression of 1997, Thailand further opened its economy to foreign investment. Manufacturing and professional services, except banking, present few entry problems for the would-be investor. Even so, the government continues to closely guard some industries by limiting to 50 percent foreign ownership of companies in many sectors. As a result, foreign investors partner with law firms and trusted local acquaintances.

Owning land is another tricky issue, although the regulations were eased by land-reform bills passed in 1999. Regulations also vary depending on region. Investing in remote and less-developed areas is rewarded with easier regulations and greater incentives.

The Board of Investment (BOI) offers qualified foreign investors a number of incentives, including tax holidays.

Board of Investment
555 Vibhavadi-Rangsit Road, Chatuchak
Bangkok 10900 Thailand
Tel: +66-2 537-8111/55
Fax: +66-2 537-8177
Email: head@boi.go.th

Hiring agencies

Establishing a business in Thailand may seem daunting with all its regulatory hurdles, but some agencies can be hired to facilitate the registration process. Some of these companies advertise in the classified sections of English-language newspapers such as Bangkok Post and The Nation.

Chambers of commerce, contactable via your country's embassy, can also offer advice and assistance in finding suitable Thai partners.

Kinds of businesses that foreign investors can set up

A. Partnerships

Thailand provides for three general types of partnerships:

• Unregistered ordinary partnerships, where partners are jointly and wholly liable for all obligations.
• Registered ordinary partnerships, where the partnership becomes a legal entity, separate and distinct from the individual partners.
•  Limited partnerships. Individual partner liability is restricted to the amount of capital contributed to the partnership. Limited partnerships must be registered.

B. Limited companies

• Private limited company. Must submit a Memorandum of Association (Articles of Incorporation) and Articles of Association (By-laws) as its constitutive documents. The registration fee for a private limited company is 5,500 baht per million baht of capital.
• Publicly limited companies may offer shares, debentures and warrants to the public and apply to have their securities listed on the Stock Exchange of Thailand (SET), after complying with requirements, such as the submission of a prospectus. The registration fee for a public limited company is 2,000 baht per million baht of capital.

C. Joint venture

Not considered a legal entity based on the Civil and Commercial Code. The Revenue Code, however, recognizes a joint venture as a single entity whose income is subject to taxes.

D. Branches of foreign offices

For a foreign branch to be granted an alien business license, the working capital brought into Thailand must be equivalent to 5 million baht over a four-year period.

E. Regional head office

Companies establishing regional offices need not register or incorporate as juristic entities in Thailand, and need not submit financial statements to the Department of Commercial Registration. The department assists in the Customs clearing of foreign staff's personal effects, applying for visa extensions, and changing visa types.

As a matter of norm, work permits for up to five foreign staff may be granted, but this can be expanded on a case-by-case basis. The government charges up to 1,000 baht per year for new or renewed permits.

F. Regional trade office and investment support offices

In 1996, the government announced businesses that provide:

• Information services related to sourcing and procurement, but not brokerages or agencies;
• Engineering and technical services, except those related to architecture and civil engineering;
• Testing and certifying standards of products, production and services standards;
• Exporting of all types of products;
• Wholesaling of all types of products within the country, excluding local agricultural products, arts & crafts, antiques, and natural resources;
• Provision of training on the use of machinery, engines, tools, and equipment;
• Installation, maintenance, and repairing of machinery, engines, tools, and equipment;
• Calibration of machinery, engines, tools, and equipment; and
• Computer software design and development

may receive the following incentives:

• Permission to own land for an office;
• Permission to bring in foreign nationals to undertake investment feasibility studies;
• Permission to bring in as many foreign technicians and experts as required;
• Permission to take or remit foreign currency abroad; and
• No limit in the number of shares owned by foreigners.

You can also view our Chambers of Commerce in Bangkok dedicated page.