Sole Proprietorship Company Registration in Thailand for US Investors

 

Are you planning to register a sole proprietorship business in Thailand? If you are a Thai, you can do it anyway, but the same is not possible for foreign investors in Thailand. However, things are pretty different for US citizens. The US-Thai Amity Treaty holds certain provisions availing of which US Citizens can register a Sole Proprietorship Business in Thailand. Thai article will help you delve deep into the details.

US-Thai Amity Treaty Clauses for US Citizens to Register Sole Proprietorship Business in Thailand

The US-Thai Treaty of Amity and Economic Relations (AER) allows US citizens and businesses to operate in Thailand on the same basis as Thai nationals. The treaty also allows US citizens and businesses to establish a company or branch office in Thailand. The treaty also gives US citizens who want to form a limited company in Thailand certain rights and privileges that are often closed to other foreign nationals.

The 1966 amendment to the US-Thai Amity Treaty provides two major benefits: 

• American companies are permitted to maintain a majority shareholding or to wholly own their company, branch office, or representative office located in Thailand.
• US citizens who register with the Thai Department of Business Development under the U.S. – Thailand Amity Treaty are allowed to run a sole proprietorship in most industries.

Note that, this is the only way for a foreigner to operate as a sole proprietor in Thailand. Doesn’t that sound cool?

Process and Cost of Registering Sole Proprietorship Business for US Citizens

The Thailand Board of Investment (BOI) establishes the guidelines for beginning a business in Thailand. The following is the procedure to register a sole proprietorship in Thailand, according to the guidelines.

1. Registering the Name of the Business/Company

Registering the entity’s name with the Department of Business Development (DBD) in Thailand is the first step towards establishing a sole proprietorship in that country. The procedure may need a maximum of two working days.

Three distinct names must be provided, ranked according to how you like them. The names submitted must not correspond to the royal family or any governmental body. Furthermore, they shouldn’t violate Thai society’s morals.

2. Obtaining a Certificate of Incorporation

After getting the name approved, the next step is to obtain a Certificate of Incorporation in Thailand. The DBD has made the process easier by providing an e-registration facility since 2017.

You can successfully register by uploading all the required documents to the e-Registration portal. However, the portal is not available in English. So, if you are not a Thai speaker, you may need a translator to complete the registration process. Therefore, it will be a wise decision to take the support of a local corporate law firm in Thailand that specializes in Amity treaty business registration.

3. Getting a VAT Certificate

A sole proprietorship in Thailand must register for VAT if the business generates more than 1,800,000 Baht in annual income. Additionally, sole proprietorships in Thailand are not subject to corporate tax. Instead, the proprietor must pay income tax according to the tax bracket for natural persons. Income of less than 150,000 Baht is tax-exempt, and the highest tax rate is 35% for income above 5,000,000 Baht.

4. Other Licenses

In addition to VAT, a sole proprietorship in Thailand may also require other licenses, depending on the type of business. For example, a restaurant business must obtain liquor and music licenses. Similarly, a shipping company cannot operate without an import-export license. You may also need an FDA license to import foods and drugs for your business. Each of these licenses can cost between 600 and 2,000 Baht.

(Please note that the company/business and tax registration fees are subject to change and the figures mentioned are the latest ones as of the date of publication of this article.)

The Amity Treaty makes it convenient for US Citizens to register sole proprietorship businesses in Thailand. Furthermore, to add to the ease, you must seek support from a corporate law firm in Thailand. This will make the process easier and faster for you. Email us your requirements at officer@konradlegal.com and our team will get back to you with a complete solution to register your sole proprietorship business in Thailand. 

BOI Thailand Focus on New Industries to Promote Foreign Direct Investment

 

The Board of Investment (BOI) of Thailand is one of the pinnacle organizations that focuses greatly on easing out the process of business registration and operations for global investors in Thailand. If you have been researching the global business ecosystem of Thailand for a long, you must have known about this by now. However, if you have just started on this, let us tell you for sure that there is a great benefit that foreign investors can gain from BOI Thailand. The non-exhaustive list of the benefits is as follows:

• Investment Incentives with almost 100% deduction on corporate income tax of the investment value

• Tax Incentives in the form of corporate income tax exemption for a period of up to 13 years from the year of incorporation

• Land or property ownership permissions

• Provision of up to 100% foreign ownership of Thai business

• Higher level of freedom and authority to remit foreign currency and bring in foreign skilled workers in Thailand

Aren’t these privileges enough to encourage global investors to start a business in Thailand?

But you will be more pleased to know that there are various other additional incentives for foreign investors based on the industry in which they are planning to do business. For convenience, we have listed some of the primary industries that BOI Thailand prefers to promote (Click to get the details):

Firstly, you must know why BOI Thailand Promotions is Mandatory for Foreign Investors.

Henceforth, deciding upon the type of business you are planning to conduct, the following are the respective benefits associated with each:

• Privileges from BOI Thailand for Businesses in Bio-Circular-Green Economy

• BOI Thailand Benefits for Businesses in the Medical and Healthcare Industry

• BOI Incentives for Startup Businesses in the Digital Economy

Apart from these, there are vivid sets of tax and non-tax incentives relevant to other sectors like agriculture and poultry, the electrical and electronics industry, manufacturing businesses, and the tourism industry. Subscribe to our newsletter on BOI Thailand Benefits to get the recent BOI updates on the respective industries and businesses.

Now you must be wondering why BOI Thailand is so keen on facilitating business registration and operations for foreign investors in Thailand. The primary reason is to promote the growth of foreign direct investment and take the nation forward in its target group of industries.

To determine its target industries and set of business activities, BOI Thailand revises its policies frequently with an investor-friendly approach. This article intends to share with you the latest updates on the BOI Thailand policies to promote foreign businesses and facilitate the same for global investors.

5 Key Agendas of BOI Thailand Advancing Towards Transformation and Development

Agenda 1: Green Transformation

This agenda endorses policy targets of Carbon Neutrality by 2050 and Net Zero Emission by 2065. Additionally, it supports carbon credit management.

Agenda 2: Development of Technology

This agenda aims to support 1,000 Innovation Driven Enterprises (IDES) with an annual revenue of 1 billion baht providing the following benefits:

• Promote commercializing of research and innovations.

• Encourage the establishment of R&D centers in Thailand.

• Attract leading foreign incubators/VCs

Additionally, BOI Thailand supports startups involved in deep technology research in the target segment.

Agenda 3: Attract and Develop Talent

This agenda aims to make Thailand grow to be a regional talent hub. To facilitate the same, BOI Thailand plans to do the following:

• Attract highly skilled professionals in the targeted industries to work in Thailand.

• Support Human Resources Development in Thailand.

Agenda 4: Prioritize Cluster-based Investment

This agenda aims to decentralize investments and distribute growth based on local potentials across the country. To meet this target, BOI aims to develop industrial zones and stimulate employment in regions with high labor availability and low income per capita.

Agenda 5: Promote Ease of Investment

Through this agenda, BOI intends to position Thailand as the Trade & Investment Gateway for the ASEAN Group of Nations. To achieve this, BOI has all plans in place to streamline regulations and facilitate investors' services to attract more investment.

These 5 key agendas raise the need to identify the appropriate industries that can contribute strategically to the fulfillment of the goals.

5 Strategic Industries on BOI Radar to Drive Foreign Direct Investment in Thailand

Bio Circular Green or BCG Economy

Focus on this industry aims to place Thailand as ASEAN's "BCG Capital". To facilitate this business group, BOI Thailand plans to extend the following benefits to foreign investors:

• Promote investments in Biocomplex, the Economic Corridors in the four regions. 

• Expand the community and society development measures to cover the community forest management and PM 2.5 reduction.

Automotive Industry with a special focus on Electric Vehicles

Thailand aims to develop itself as a Premier Global Automotive Manufacturing Center. To achieve this goal, BOI Thailand is all set to extend the following supports:

• Promote a complete EV production ecosystem

• Support the established automakers in transitioning to EVs and advanced technologies to reduce CO2 emissions.

• Assist the traditional auto-part makers in transitioning to new technologies or industries.

• Promote the management of used EV batteries.

Electronics Industry for Upstream and Smart Electronics

Thailand is gradually evolving as a Smart Electronics Manufacturing Hub in the ASEAN region. To establish this presence throughout the APAC regions, BOI Thailand aims the development of the Upstream Electronics Industry in Thailand.

To achieve this result, BOI Thailand facilitates promotions for investment in the entire supply chain of the electronics industry, including upstream, midstream, and downstream.

Digital & Creative Economy

In this segment, BOI Thailand aims to achieve the following goals:

• Transforming into ASEAN's Digital and Creative Center.

• Attracting investment in hyper-scale data centers and cloud services

• Promote a fully integrated digital industry

• Focus on promoting Thailand's high-potential creative industry.

Regional Headquarters & International Business Center

As a gateway to Southeast Asia, now is the perfect time to position Thailand as an International Business Hub. Focusing on this, BOI Thailand extends business facilitations and foreign investment promotions targeting the following:

• Continuously attract more target companies to establish RHQs in Thailand.

• Collaborate with related agencies in establishing a one-stop service for advising and facilitating the establishment of RHQs and expatriates living in Thailand.

• Upgrade the HQ Biz Portal.

Now what should be our Step for BOI Thailand Promotions?

Now that you have the latest updates on the agenda and industries on which the Board of Investment of Thailand is focusing, the following things must have been clear:

1. Whether the business you are planning is eligible for BOI promotion or not.

2. Whether there is a need to modify your business pattern to fall in the promotion slab of BOI.

3. Whether the benefit BOI is committing to extend will be helpful for your business or not.

There may be many other “whethers” that might have changed or affirmed their perspectives in your mind. But, some more questions are still unanswered like the following:

 

1. Are these benefits applicable to all global investors and are you eligible to apply for BOI Thailand promotions?

2. What are the steps of getting a BOI Thailand Promotions Certificate?

3. What to do before and after registering your BOI Company in Thailand?

To get answers to such or more complicated questions, you must consult with a leading corporate law firm in Thailand with experience in BOI Company Registration. 

For direct support, feel free to email us at officer@konradlegal.com.

Register Food and Beverage Company in Thailand

 

In the realm of global business, players frequently overlook Thailand’s burgeoning food and beverage sector, opting instead for established English-speaking markets such as Australia and Singapore. However, it is an unmissable market opportunity for investors and entrepreneurs to tap into the vibrant culinary landscape and start a food and beverage company in Thailand.

Nestled in the vibrant heart of Southeast Asia, Thailand stands as the second-largest economic powerhouse in the ASEAN region. With the government’s generous support and affordable and abundant agricultural resources, establishing a manufacturing base or regional headquarters in Thailand is very simple. Thai consumers exhibit a strong propensity to spend on food, often exceeding their income, while the influx of tourists contributes significantly to Thailand’s status as one of the most visited countries worldwide.

Surprisingly, many companies that are actively exploring the Thai market overlook a tremendous opportunity the country presents. This unique opportunity allows businesses to gain unmatched access to the Thai market, significantly accelerating the growth of their F&B brand and product to rival Coca-Cola’s level of recognition in a fraction of the time compared to traditional market penetration strategies.

Food & Beverage Industry in Thailand: A Pool of Opportunities

Thailand, often overlooked, offers an outstanding market for international food and beverage companies. Its rapidly expanding middle class has disposable income and an unquenchable thirst for diverse culinary experiences. Tourism, a significant contributor to Thailand’s GDP, attracts a diverse audience with varied food preferences. From budget-conscious consumers to luxury seekers, there’s a customer base for every type of product in Thailand’s F&B market.

The rapidly evolving Thai Food and Beverage industry presents a landscape of emerging purchase points. Convenience stores, boasting an extensive network of over 20,000 outlets across the country, serve as strategic locations to reach a diverse range of consumers. Additionally, Thailand’s world-class shopping malls provide a steady flow of foot traffic, making them ideal locations for QSRs to establish a strong presence.

Info Tip!

The Thai market has not been monopolized in sectors beyond the spirits industry. Unlike saturated and competitive markets such as Japan, gaining access to retail channels and reaching consumers in Thailand is comparatively less challenging.

The ease of doing business in Thailand complements the favorable business environment. This makes it an attractive destination for F&B companies seeking a foothold in the APAC region. English proficiency in Thailand is relatively high, and comprehensive business support mechanisms. Such businesses can easily attract government subsidies and dedicated support teams to enhance their appeal. Furthermore, these factors create a conducive environment for establishing a robust presence in the region.

Entering the Food and Beverage Industry in Thailand: Check your Potential!

To enter the Thai market, you can utilize one of three main strategies, each offering distinct advantages and considerations.

Start with Complete Control

To operate in Thailand, one may choose to establish their own manufacturing facility, distribution network, marketing, and sales force. Although this approach demands considerable financial investment, it grants complete control over all aspects of the business. Additionally, it allows tailored decision-making and efficient operations.

Traditional Partnership Approach

Initiating market penetration in Thailand requires collaboration with a local importer or distributor. This established approach requires time to identify suitable partners and educate the market about your product, often spanning several years.

Strategic Business Partnership

Entrepreneurs with distinctive brands or cutting-edge technology will benefit from this chance. By collaborating with a prominent Thai food and beverage manufacturer, you can access their local resources to quickly launch your product. Working with a partner with extensive local networks allows your product to reach customers more quickly, but it also means sharing a larger portion of your revenue.

Process to Start a Food & Beverage Company in Thailand

A food and beverage company in Thailand can specialize in various sectors like restaurants, food trucks, food manufacturers, or distributors. There is a wide scope of opportunities in Thailand to monetize!

However, to start any type of food and beverage business in Thailand, the basic process is the same. It is as follows:

Henceforth, depending on the type of food and beverage company you want to start in Thailand, you will need some additional licenses and permits. Some of such permissions are as follows:

• To Start a Food and Beverage Manufacturing Company you must obtain a Factory License in Thailand
• Starting a Brewery mandates you to Apply for a Brewery License in Thailand

Additionally, your business may be eligible for Industrial Estate Authority of Thailand (IEAT) or Board of Investment (BOI) promotions as well. 

• If you are planning to set up a food and beverage manufacturing company in Thailand in the FTZs or SEZs of Thailand, you can apply for IEAT promotions.
• If your food business relates to food processing at par with the target BOI activities, you can also apply for BOI Thailand promotions.

Groundwork to Start a Food & Beverage Company in Thailand

To effectively form a strategic partnership in Thailand, meticulous preparation and relationship-building are essential.  We suggest these steps as a fundamental guide:

Do Thorough Industry Research in Thailand

To succeed in Thailand’s F&B industry, it’s crucial to grasp the local culture, and business environment, and foster face-to-face connections. The Thai government actively supports companies in this sector. The Thailand Board of Investment (BOI) offers online resources, financial subsidies, and benefits to start a business in Thailand.

Explore Partnership Options

In Thailand, fostering amicable business relationships is essential, as they significantly influence the success or failure of business transactions.

Understand the Thai Passion for Food

Similar to Italy and Japan, Thailand’s affinity for food runs deep. Infuse this passion into your product and business strategies to create a truly immersive experience for customers.

Consult with Experts

Forging strategic alliances is an intricate skill. While trial and error is a viable learning method, it incurs opportunity costs. Seeking the guidance of experienced individuals increases the likelihood of successful initial implementation.
All you need to do is email us your plan at officer@konradlegal.com and we get you covered throughout. As a leading corporate law firm in Thailand, we guide Thai and foreign investors to start their food and beverage companies in Thailand successfully!

How to Start a Medical Business in Thailand?

Thailand, a rapidly developing nation with a burgeoning healthcare industry, holds immense potential for entrepreneurial enthusiasts seeking to explore business ventures in this domain. The country’s expanding population and escalating demand for high-quality medical services create an alluring opportunity for entrepreneurs to establish healthcare enterprises. However, starting a medical business venture in Thailand demands meticulous planning and execution due to its complexity. This concise guide aims to provide valuable insights and facilitate the journey of aspiring entrepreneurs by addressing the crucial question – “How to start a medical business in Thailand?”

The Aging Society of Thailand needs special Medical Facilities!

Thailand’s healthcare industry is expanding, but its aging population is also growing. This trend is not unique to Thailand as it happens in many countries. Consequently, the demand for healthcare services in Thailand will increase. Thailand’s aging population is projected to surpass that of Europe and the US by 2045. Accordingly, the need for healthcare services will continue to rise.

The Healthcare Sector of Thailand is Booming!

Thailand has made significant strides in enhancing access to medical care and public healthcare. Substantial investments in time and resources have facilitated easier utilization of healthcare services. Government expenditure on healthcare has experienced a rapid increase, growing from below 50% in 1995 to approximately 80% in the present. Furthermore, Thailand implemented a universal healthcare system in 2002, which has proven to be highly successful. As an outcome, over 99% of Thai citizens now benefit from public healthcare access.

The extensive network of healthcare facilities in Thailand comprises over 1,000 government hospitals and 300 private hospitals, offering a diverse range of services and treatments. This extensive network strongly suggests that the public healthcare system in Thailand effectively serves the needs of the majority, if not the entirety, of the population.

Comprehensive Framework to Start Medical Business in Thailand

To successfully start a company in Thailand, it is advisable to follow a systematic step-by-step process. Begin by selecting the most appropriate company structure and reserving a desired name through the Department of Business Development. Proceed to create the articles of association and convene a shareholders’ meeting. Subsequently, register the company and acquire a tax identification number. For foreign directors or employees, it is essential to obtain the necessary visas and work permits. By adhering to this organized approach, you can ensure a smooth and efficient company formation process in Thailand.

Although Thai laws impose restrictions on foreign ownership, medical companies can overcome these challenges in two ways:

Option 1: Obtaining a Foreign Business License (FBL)

To obtain an FBL, medical companies must secure approval from the Foreign Business Committee and the General Director of the Department of Commercial Registration.

Option 2: Seeking Approval from the Thailand Board of Investment (BOI)

Medical companies can also seek approval from the BOI, which offers various incentives and benefits to foreign investors.

By following these guidelines and exploring these options, medical companies can successfully establish their presence in Thailand and navigate the regulatory landscape.

BOI Promotion to Start Medical Business in Thailand: Check Eligibility!

To obtain Board of Investment (BOI) approval, ensure that your intended medical activity falls within the seven eligible categories:

If your proposed activity qualifies, submit the BOI license application online. BOI officers will conduct an initial application evaluation. If your application receives preliminary acceptance, company representatives or directors must attend a meeting with a BOI expert committee within ten (10) days of the application to deliver an oral presentation.

The project will undergo a subsequent evaluation 90 days after the meeting to determine whether the BOI certificate will be granted.

Why is BOI Certification Helpful for Medical Business in Thailand?

The Board of Investment (BOI) certification in Thailand offers substantial benefits that extend beyond tax incentives:

Tax Benefits

• BOI Certification exempts companies from paying corporate income tax for a period spanning 3 to 8 years, contingent on the nature of their business activities.
• Provision of availing a 50% reduction in corporate income tax for a maximum duration of 5 years.
• Waiver on Import taxes for machinery and raw materials employed necessary for research and development projects.

Additional Advantages

• 100% Foreign ownership of company shares is permitted.
• Foreign investors are encouraged to explore investment opportunities.
• Provision to bring in foreign technicians and experts to contribute their expertise in Thailand.
• Facilitation of international financial transactions owing to the provision of unlimited foreign remittance.
• Ownership of land is possible, subject to project approval, enabling long-term investment and development.

Basic Incentive for Eligible Medical Businesses in Thailand

The Board of Investment (BOI) provides numerous benefits to support and attract investment projects that align with the government’s development goals. These incentives, which were previously mentioned, are designed to encourage investment in Thailand.

We take it to be our responsibility to update our audience with the benefits and announcements of BOI Thailand. Subscribe to BOI Thailand Updates Newsletter to get the information straight to your inbox!

Necessary Licenses to Start Medical Business in Thailand

To start a medical business in Thailand, you may require various licenses, depending on the type of business you operate. Here’s an overview of the different licenses and the respective issuing authorities:

1. Medical Service Business License

• Applicable to service-based businesses such as rehabilitation centers and nursing homes.
• Issued by the Department of Health Service Support.

2. Factory License or Business Establishment License

• Required if your business involves manufacturing and meets certain criteria, such as having 50 or more machines or employing 50 or more people.
• For factories located in an industrial area, you’ll also need Factory permission and incentives from the Industrial Estate Authority of Thailand.
• If your business does not meet the criteria for a factory license, you can apply for a Business Establishment License from the Local Administration Organization.

3. Science Laboratory Capacity Certificate

• Necessary for conducting clinical research activities.
• Issued by the Department of Medical Science.

4. Permission from the Food and Drug Administration (FDA)

• Required before marketing medical equipment, pharmaceutical products, or medical food.
• Granted under the Thai Drug Act of 1967 (BE 2510).

These licenses are crucial to ensure compliance with the regulations and legal requirements for operating a medical business in Thailand.

Immigration Solutions to Start Medical Business in Thailand

The Foreign Working Act of 2008 mandates that foreign nationals seeking employment in Thailand must secure a work permit in advance, outlining the activities they are permitted or prohibited from engaging in. You should consult a leading immigration firm to obtain a work permit in Thailand.

However, the introduction of the SMART visa category has simplified the process of obtaining a work visa. This visa, approved by the Thai government on February 1, 2018, is designed to attract highly skilled foreign professionals and investors to work or invest in Thailand. It is available across various industries, including automotive, tourism, agriculture, robotics, and others.

Four categories of foreign nationals are eligible to apply for the SMART visa: experts, investors, executive management personnel, and startups. This visa offers numerous benefits and privileges, including a validity period of up to four years, exemption from obtaining a separate work permit, reduced reporting requirements to the Thai Immigration Service (only once per year), and the possibility of family reunification for the visa holder’s spouse and children.

The Bottomline

Thailand’s dynamic healthcare industry, ripe for growth and innovation, welcomes ambitious entrepreneurs like you. By skillfully navigating the efficient registration process, capitalizing on lucrative BOI incentives, adhering to licensing requirements, and safeguarding your intellectual property, you can forge a path to success in this flourishing sector.

At Konrad Legal, our expertise lies in assisting businesses in Thailand through their company incorporation and registration journeys. Reach out to us to discover how our tailored solutions empower your seamless entry into the thriving Thai medical and healthcare market. Email us at officer@konradlegal.com and seize the opportunity and register your Thai company today and start your medical business in Thailand right away!