How to Start Food Business in Thailand?

 

Are you aspiring to start a food business in Thailand? Then this article is going to be your super guide in the process. Due to the huge influx of visitors to Thailand, many global entrepreneurs invest in the Thai food industry. A foreign investor must adhere to Thai law’s regulations for business registration. Additionally, they should focus on consumer protection to create a business that sells food.

However, this article aims to guide you through the 3 most easy ways to start your food business in Thailand. 

First Easy Way to Start a Food Business in Thailand: Focus on Natural Resources

You must note that the food business is not only restricted to cafes and restaurants. Now is the high time to break free from this concept. Setting up a cafe, restaurant, pub, food truck or trailer never means doing food business in Thailand exclusively. They are simply a part of the food industry of Thailand and never denote the whole of it.

Thailand is often referred to as the “Food Valley of the World” due to its abundance of agricultural resources. Furthermore, Thailand holds a huge reserve of livestock and marine life. It’s noteworthy, that the kingdom holds high global ranks in terms of stock and export of these commodities.

Now would the kingdom ever want to lose this leading status in the world? Never!

Therefore, the Royal Thai Government in association with the Board of Investment facilitates the process of ease in starting a food business in this segment. It is to promote the involvement of Thai and foreign investors to boost Thailand’s position in global rankings. 

Food Processing Company

Processed foods contribute to almost 52% of Thai food exports and 15% of Thai manufacturing exports. Additionally, this year till June, the kingdom has already exported products worth US$ 45 billion. Aren’t the figures inspiring enough to start a food processing company in Thailand? 

The food processing industry in Thailand has various segments and verticals. To narrow down your scope of market research let us give you some hints.

Your business can specialize in either moderately processed or highly processed foods. Both these segments have vividly different consumer bases, which are remarkably huge respectively. Moderately processed foods refer to food items subject to canning, freeze-drying, and other preservation techniques. Whereas, highly processed foods are ready-to-eat meals, convenient meats, and meat and vegetable products. Additionally, there is a big local and export market for processed halal foods in Thailand. 

The market is promising with guaranteed growth. If you are not convinced enough, you may proceed to start your restaurant in Thailand.

Food Seasoning Company

The abundance of agricultural and raw materials in Thailand along with the availability of trained manpower is gradually reinforcing the kingdom as one of the leading food seasoning ingredient exporters. According to the Board of Investment of Thailand, the kingdom is the world’s sixth-largest exporter of food seasoning and flavoring ingredients with Australia, Philippines, Indonesia, Japan, and Malaysia as the primary export destinations.

Additionally, the local need for food seasoning ingredients is also increasing due to the boom in the Thai hospitality industry post-COVID. Therefore, even if you are not opening a restaurant or cafe, you are going to cater to their requirements.

Beverages

In the current fiscal till May 2023, the revenue generated in the Thai beverage market is almost US$1200 million. Isn’t this aspiring?

The Thai beverage market assures a CAGR of 5.2% with high demand for functional drinks and fruit juices. Additionally, Thai consumers are always in search of new and sophisticated flavors of functional drinks. This market tendency is going to give you as an investor a great scope to research and expand.

Trading Centres

This is another thriving market in Thailand. You can set up cold storage, silos and involve your business in trade and auction of agriculture products. Additionally, you can also launch digital platforms to accomplish the said objectives. Your business can also provide a platform to service farmers and business operators and a system to monitor and control the quality of agricultural products. 

Now you may ask where’s the ease? The ease is in the process of incorporating these food business units. Additionally, you can also access various alternative ways to reduce the stringency in the process, provided, you have a reliable Thai corporate lawyer by your side. Also, note that the process of registering these business units requires relatively less collateral than starting a restaurant, cafe, food truck, or stall in Thailand.

Second Easy Way to Start a Food Business in Thailand: Focus on BOI & Thai Government Incentives

If you have gone through the previous section, you may think that we talked mostly about the food manufacturing and processing business. That’s true, but, these business activities fall in the BOI-eligible bracket. Nonetheless, being in the food industry, you will target the manufacturing segment and can bag tax and non-tax benefits from the Board of Investment of Thailand.

If your food business project complies well with the BOI eligibility criteria, you will start getting the following benefits from the time you start thinking about the incorporation:

• Ease in the Thai Company Registration Process.
• No restriction in bringing in foreign skilled workers in Thailand.
• High probability of gaining 100% foreign ownership of the planned business. (In other cases, you will need to have a Thai partner holding 51% of the share of your business.)
• Exemption in the VAT and excise tax associated with the import of machinery in Thailand from your native or preferred nation.
• Become eligible for incentives on the investment in the project.

Apart from these basic benefits, you will also be eligible for other tax and non-tax benefits which, although not restricted to, primarily focus on the following:

• Corporate Income Tax exemption of up to 13 years.
• Gain a 100% tax deduction on utility bills generated in operating your business in Thailand.      
• Receive tax and non-tax benefits in expanding your business in Thailand.
• Some promoted activities receive a reduction in withholding tax rates on dividends paid to foreign investors or companies.
• Certain expenses incurred by BOI-promoted companies, such as research and development, human resource development, and transportation costs, can be double deducted when calculating taxable income.
• BOI-promoted companies are allowed to carry forward losses for up to five years, which can be deducted from future profits.

Aren’t these going to make the process of setting up and operating your food business easy in Thailand? 

Your cafe and restaurant business may give you margin, but the said lines of business will surely grant you greater ease in operating your business. Additionally, you can also enjoy greater business authority. However, if still you are thinking of a restaurant in Thailand, here is the cost of starting a restaurant in Thailand.

Third Easy Way to Start a Food Business in Thailand: Consult a Professional Thai Corporate Law Firm

Irrespective of the fact as whether you are a Thai or foreign investor, you must have a professional corporate law firm by your side to start your food business easily in Thailand. The primary reason is getting fool-proof procedural guidance, followed by other documentation and application-support benefits.

We understand that to start your business in Thailand, you might either be in the thinking phase or may have started making the preparations for the same. Irrespective of the phase you are in, we have solutions for you. Email us your business plan at officer@konradlegal.com and go for a consultation with our team of corporate law professionals. Not only would you get the best advice, but, we will surely make your process to start a food business in Thailand – EASY!

NGO Registration in Thailand for Foreigners

 

For NGO Registration in Thailand, foreigners will have to go for either Thai Registered Foundations or Foreign Private Organizations. Sounds confusing?

As a leading corporate law firm in Thailand, allow us to make your plan of registering an NGO (Non-Government Organization) in Thailand a success!

We all know that a private organization engaging in charitable or social welfare activities is an “NGO”. Such organizations never conduct operations to earn profit. Thailand has become a sought-after destination for NGOs due to its advantageous location at the heart of South East Asia. Additionally, it is one of the host countries of the United Nations. 

The registration of NGOs, however, is not specifically covered by Thai law. Instead, NGOs fall under one of two categories, i.e., foreign private organizations or Thai registered foundations. Let us take a quick glance at the difference between these two types of business structures.

Foreign Private Organizations Registered as NGOs in Thailand

Without creating a local entity, foreign NGOs are allowed to register their presence and apply for work authorization in Thailand. NGOs are categorized as Foreign Private Organizations in this case. However, it is typically advisable for foreign Organizations looking to operate in Thailand to create a foundation. This is due to administrative challenges associated with running a foreign NGO in Thailand without a local entity registration.

The Committee on Consideration of the Entry of Foreign Private Organizations must grant permission for foreign NGOs to function in Thailand. A foreign NGO will be given a limited license by the Committee to work in Thailand. For international workers and volunteers, obtaining work permits and visas to remain in Thailand are two different processes.

Yet, NGOs functioning as FPOs frequently face financial and legal challenges when it comes to day-to-day problems. Thus, it is often more appropriate to register a local Foundation under Thai law. It becomes mandatory when the NGO involves in any major work or financial activity in Thailand.

Thailand Registered Foundation as an NGO

To pursue their goals and carry out operations in Thailand, NGOs may create a local legal organization called a Foundation.

Thailand Foundations are non-profit organizations with authorization from the Thai Ministry of Interior. Such organizations can carry out charitable, religious, artistic, scientific, literary, educational, and other public interest endeavors.

The process needs a minimum of three board members to supervise either Thai or international volunteers. They must do so on a voluntary basis. Additionally, they must be able to show a minimum donation of 200,000 Baht to form a foundation in Thailand. To prove this, a supporting bank account statement is necessary.

Although not mandatory, yet, one of the board members should be a Thai native. It is because the NGO will undoubtedly benefit from having a member who speaks Thai well and is familiar with local practices. Officers of the Foundation must also get a police clearance from the national police force of their home country.

Regulations for NGO Registration in Thailand for Foreigners

For a developing nation, foreign NGOs offer a possible source of material and technological support. Yet, a complex bureaucratic structure necessitates foreign NGOs to apply for authorization. They must do so before opening a local office in Thailand. The Ministry of Labor and Social Welfare oversees the operation of foreign NGOs in Thailand, and two main regulations govern this process:

• The Ministry of Labor and Social Welfare’s B.E. 2541 (1998) regulations on the entry of foreign private organizations that operate in Thailand.
• Governing principles for consideration and guidelines on the entry of foreign private organizations to operate in Thailand and the building of regional offices in Thailand, according to the Committee on Consideration of the Entry of Foreign Private Organization Regulation B.E. 2543 (2000).

The Committee on Consideration of the Entry of Foreign Private Organizations authorizes foreign NGOs to operate in the nation. It grants permission to foreign NGOs on the basis of the following criteria:

• The country’s strategy for societal advancement, economic growth, and national security
• Preserving positive ties between Thailand and other nations
• The foreign NGO’s objectives and methods of operation while requesting authorization to operate
• Relevant government department’s opinions and recommendations
• The advantages of permitting the foreign NGOs to operate in Thailand

It is significant to remember that Thai law defines the following terms:

• An “institution, organization, society, foundation or group of foreign persons who are in the private sector or who are receiving support from a foreign government” is a foreign non-governmental organization (NGO).
• The definition of “operation” as it relates to the running of a foreign non-governmental organization (NGO) is “an application to establish an office or to operate an activity in order to help or support regardless of whether the form of support is financial support, organizing seminars or exhibitions, donations, support in terms of materials or equipment or durable goods, offering knowledge and technological or other forms of support.”

If a foreign NGO has been given authorization to operate in one of the aforementioned ways, the Committee will provide them a license that is only valid for two years. The foreign NGO must abide by the particular requirements of the license, which include submitting a semi-annual report to the Committee outlining the outcomes of the NGO’s activity.

Foreign NGOs must seek legal advice before starting operations in Thailand due to the complexity of the laws and regulations in that nation. For complete assistance in the process, email us at officer@konradlegal.com and our team will get back to you within 1 Thai working day.

What are the Rights and Responsibilities of Company Director in Thailand?

 

This is a basic overview of the rights and responsibilities of a company director in Thailand.

In Thailand, each corporation is required to have at least one director who will oversee the company’s operations in accordance with its bylaws and annual shareholders’ meeting.

Role of a Company Director in Thailand

• Deciding by voting at the board meeting
• Deciding on matters required by laws or proposed by the management
• Setting goals, policies, and strategies
• Monitor, oversee, and evaluate

Eligibility to Become a Company Director in Thailand

The qualifications for an individual to be a director are:

• Must be at least 20 years old
• Not incompetent or bankrupt
• Can be a resident or non-resident

Appointment of Company Director in Thailand

The general shareholder meeting has the power to elect directors. A new director for the corporation may only be appointed by the majority of shareholder votes. After the election is complete, an individual earns the position, rights, and responsibilities of a company director in Thailand.

Resignation of Company Director in Thailand

Any director who wishes to resign must submit a resignation letter to the company in accordance with section 1153 of the Thai Limited Company Law, and the resignation is effective as of the day the letter is received by the business. Resigning directors may also inform the Registrar of their resignation.

The director’s declaration to resign from his position as a corporate director must be included in the resignation letter and must be signed by the departing director.

Removal of a Thai Company Director

A general meeting resolution that removes a director may be adopted.

If a director refuses to sign the resignation letter, issues may occur when removing them. A shareholder resolution to fire the director should be secured if this occurs.

The company must file the registration to the Ministry of Commerce within 14 days of a change in the board of directors.

Duties of a Thai Company Director

Statutory Duties

The duties of a director in a Private Limited Company in Thailand include:

• Manage the company according to their experience and knowledge
• Make sure that shareholders make the payment of shares
• Organize the keeping of books and documents
• Distribute the dividend or interest payments
• Enforce the decisions in the shareholders’ meetings
• Not undertake commercial transactions of the same nature as, and competing with the company, either on his own account or of a third person
• Not be a partner with unlimited liability in other companies of the same nature as or competing with the company

In addition to the above, Public Company Directors have the entitlement to some more duties like the following:

• Observing the Public Companies Act, the company’s objects and articles of association
• Not engage in any business in competition with the company
• Where a director purchases or sells property or does any business with the company, such transactions do not bind the company, unless approved by the board of directors

Fiduciary Duties

The fiduciary duties of a director are to:

• Act in good faith and in the best interests of the company
• Act with proper intentions
• Avoid conflict of interest between personal and company matters

Powers of Thai Company Directors

• Although there may be vacancies among them, the remaining directors may still act. However, if and for as long as their number falls below that required to constitute a quorum, the remaining directors may only act to call a general meeting of the company or to increase the number of directors to that number (section 1159).
• Directors may determine the quorum for the transaction of business at their meetings. However, in case of no quorum, three directors must form the majority when there are more than three directors (section 1160).
• At every board meeting, a majority vote settles the questions. However, in the event of a tie vote, the chairman has a casting vote (section 1161).
• A director may convene a board meeting at any moment (section 1162).
• The directors may choose one of their members to preside over meetings. Additionally, they can set the tenure of his/her term in office in the absence of a chairman (section 1163).
• Any authority held by the directors is subject to transfer to management or committees made up of other directors. Every manager or committee must follow any directives or rules that the directors may impose on them when exercising the authority entrusted to them (section 1164).

Liabilities of a Thai Company Director

If a director doesn’t carry out their duties or responsibilities, they may face termination, face financial penalties, or have to pay the firm, their shareholders, or other parties that suffered losses.

If the director’s negligence causes a criminal offense, such as public cheating and fraud, defamation, document forgery, or currency counterfeiting, the offense is due to the director’s action or negligence in order for the director to be criminally accountable.

According to Section 1169 of the Civil and Commercial Code, the company or, in the event the company declines to act, any shareholder, may file claims against the directors for compensation for harm they caused to the firm.

In the event that the company’s creditors have unresolved claims against it, they may also enforce such claims.

In order to avoid any duty violations, it is crucial that you understand the functions and responsibilities of a director, who are a necessary component of any Thai firm. 

However, to be a Director of a Thai company, you must register your company in Thailand. Are you aspiring to be one? 
Contact Konrad Legal Company Limited for complete support and coordination in the process with expert company registration services in Thailand. Email us at officer@konradlegal.com and our team will get back to you within one working day! Additionally, we can also help you through the process of maintaining decorum and executing all the rights and responsibilities as a company director in Thailand.

How to Find the Top Corporate Law Firm in Thailand?

 

Have you recently moved to Thailand and planning to register a company or your existing business in Thailand? Then you must have the best corporate law firm in Thailand by your side!

To start with, let us suggest you something – “It’s never true, that law firms giving high quotes for their services are the best ones in Thailand”. Don’t get carried away by the sophistication of talks and the process of starting a conversation or deal. You may suffer delay or transactional setbacks in later stages. Do your research properly!

We, as a leading corporate law firm in Thailand, feel that even if you hesitate to reach out to us, you should make a well-informed and wise decision in making your selection. To support our feeling, we have shared some points that will help you take the best decision.

Ask the Internet – “Best Corporate Law Firm in Thailand”

Now we all have “the internet” in our pockets. Simply ask Google or Safari for the “best corporate law firms in Thailand”, by typing the same on the search bar or doing a voice search. Within a fraction of a second, you will be able to see a non-exhaustive list of law firms and corporate lawyers in Thailand. 

But the results that are ranking on top in the search engines may not be the ones you are looking for!

Have you gone through the reviews? That should be your first target to check upon. Check the reviews and try to identify how many of them sound natural to you. Remember that to rank up in search engines many businesses and organizations use resources to get paid reviews. So comments in the reviews that sound highly professional and perfect in English needs to have your consideration of their genuineness.

Check the reviews and try to match the statements of the reviewers with your case or the service that you require from that law firm. If you can find a resonance, you can proceed and contact them.

Seek References and Recommendations

In this case, two types of your acquaintances can help you out. First, any of your family members or friends who is/are living here in Thailand. Second, any of your business connections who have their branches, affiliations, units, or associates operating here in Thailand. This will be the most trustworthy source of information to help you find the “Best Corporate Law Firm in Thailand.

If you have this option active, then there is no need to rely on any other source of information or do any further research. However, there can be times when the referred or recommended lawyer, law firm, or agency may not be appropriate for your requirement.

In that case, you can take reference from the law firm that your acquaintances have referred you for. Being a unit in the circle of trust, they will surely help you with the correct information and connect you with the right professional.

Cross-check with the Authorities

Every law firm or agency holds a registration number in Thailand. The same goes for lawyers as well. This is a global practice. Therefore, after getting convinced about the ability of any law firm or agency, or lawyer in Thailand, do check their authenticity. There are certain websites of relevant authorities that can help you find the difference. Let us help you with the links –

To check Corporate Law Firms in Thailand: Department of Business Development Data Warehouse

To check Lawyer Profiles in Thailand: Lawyer Council of Thailand under Royal Patronage

These two are the most trustworthy sources to check the authenticity of any corporate lawyer or law firm in Thailand. If you can’t see the name of the Thai law firm or lawyer listed in these databases, be assured that they are not registered entities and are carrying on their business illegally.

Be True to Share your Plans and Bold to Ask Questions

After completing all of the above stages, you can be apparently confident that you have found the best corporate law firm in Thailand. But, never be assured that this is going to be the best. It is because once you start believing this, you will fail to gain the confidence to ask questions.

Your corporate lawyer can help you only if you are able to disclose your business plan clearly. For example, merely stating that “I want to do manufacturing business in Thailand” will never work. You should state your objectives very clearly – “I want to start a production unit in Bangkok to manufacture automobile parts”. 

The more clear you can be in sharing your plans, the better suggestions and advice can you expect from your lawyer. Additionally, you may receive suggestions for benefits like:

• Promotions from the Board of Investment Thailand
• Industrial Estate Authority of Thailand Privileges
• Bilateral Trade Treaty Benefits like the US-Thai Amity Treaty

After you share your requirements in detail, the corporate lawyer will now be able to guide you with the best options. Now after patiently listening to all the advice, suggestions, and guidance of the lawyer you approach, feel free to ask him/her/them the following few questions:

– Have you registered such a type of company before?

If Yes, ask for references. They may talk about non-disclosure agreements, but still, they can share the name of the company with you.

If No, ask, have you registered any similar business structure earlier?

– Do you have strong relations with Thai authorities?

If Yes, then there’s an assurance that your process is going to be complete very fast. However, no need to dive into demotivation if the answer is No.

– How many similar types of company registration requests do you receive in a month?

– Will you be able to appoint a dedicated officer or legal professional for my task?

– What is the minimum and maximum time that you need to complete my registration process?

– Can you help me with a simple outline of the cost involved in the process?

While receiving the answers, keep the following things under observation:

• Was the reception warm enough and you were feeling comfortable in the premises and company?
• Were the lawyers confident enough in disclosing their capabilities and answering your questions?
• Were they able to answer all your queries in a single sitting or did they take any break during the session?
• Were they listening to your explanations about the task patiently or interfering in your speech?
• Did they postpone some of the answers that they will deliver at the next meeting or over email or call?

Overall, you have to trust your instincts in this case. If you feel comfortable and gain confidence in the capabilities of the firm you approach after researching or gaining references, you may proceed.
However, if all these seem difficult, you may email us at officer@konradlegal.com.

We are a Department of Business Development of Thailand registered corporate law firm in Thailand since 2013. We patiently listen to our client’s requirements and then share our capabilities by which they can easily achieve success in their business objectives. To date, more than 1000 companies got benefitted from our services. Want to be the next one? Write to us!

8 Tips to Choose the Right Thailand Lawyer

Are you finding it difficult to choose a Thai lawyer? I can understand the amount of confusion you have to go through to select the one. Since there are so many, searching for the one is always a daunting task. Whether you want to raise a visa or extend it, willing to get married to a Thai or file a divorce and buy a property or sell, you will be in need of legal expert. While choosing the first, the first and foremost thing that you must do is identify what kind of legal service you want and then proceed;

1. Ask your friends or business associates about a Thai lawyer. A word of mouth can be quite helpful when you have no idea where should you go. They can tell you about their experience.

2. You must filter your search to English speaking professionals. There will be many who though offer legal services, are not adept in English. If you are a foreigner, hiring such a professional wouldn’t do any good to you as then you may have to pay extra for a translator.

3. Join public forums and other online and offline communities. By doing this you will get to speak to strangers who can guide you well as whom to choose. You can even befriend some Thais who can take you through to the legal process and suggest you the best service provider. You might find a lot of them discussing different law firms and legal experts, making the search a little easier for you.

4. Instead of checking on the law firms haphazardly, it is better to choose any five at first and gather information about them.

5. Deciding between a law firm and an independent working professional. While choosing a law firm will ensure that you are never without a Thai lawyer, an independently working professional may deny you providing services.

6. When you are looking for a law firm you must consider its expertise. Know how long they have been working in this field plus the different types of legal experts they are working with. I mean you cannot work with a divorce lawyer if you need someone to assist you in property related matters.

7. You must see how professional the experts are. One should maintain a proper communication with the clients. There shouldn’t be anything hidden from the clients, which means there should be much clarity and transparency. You must know what your law firm is willing to do.

8. Next is their fee. It must be within your budget, right? You can seek a free quotation from them considering the services you need. Once you have ensured these, you can now go ahead with the hiring process.