How to get license for e-commerce business in Thailand?

 

If your business in Thailand involves selling goods online or via e-commerce platforms, this situation necessitates your requirement to apply for an e-commerce license in Thailand. In the digital age, many businesses harness the internet’s potential to expand their reach and boost sales. E-commerce offers a global marketplace, enabling enterprises to engage with a vast network of customers worldwide.

Moreover, this business model often requires lower investment levels compared to traditional brick-and-mortar establishments. However, it’s important to note that online businesses operating in Thailand must obtain an e-commerce license to ensure their legal compliance.

The Thai Electronics Transaction Act governs the application process for e-commerce licenses in Thailand. Leading corporate law firms in Thailand with licensing capabilities are well aware of this act, but, you should also have an idea of it. Let us share the same with you!

Thai Electronics Transaction Act: Comprehensive Overview

The Electronic Transactions Act (ETA) governs civil and commercial electronic transactions in Thailand. It aims to encourage the use of electronic technology by minimizing uncertainty about the legal validity of electronic information. It also emphasizes that certain legal requirements through physical paperwork should meet the electronic process as well.

The ETA is based on the premise that data messages when specific conditions are met, have the same legal standing as other written documents. To clarify, data messages encompass all electronically generated, sent, received, stored, or processed information. Examples of data messages include e-mails, telegrams, telexes, and faxes.

In addition to the aforementioned, the Electronic Transactions Act (ETA) sets licensing and registration requirements for electronic transactions and provides a general framework for such transactions involving the public sector. The Electronic Transactions Commission promotes and develops electronic transactions and monitors the operations of businesses providing services related to electronic transactions. These services require prior notification and registration to obtain the necessary license.

Entrepreneurs selling products online should also be aware of the provisions of the ETA, as Thailand’s e-commerce industry is growing rapidly and Thai consumers are increasingly purchasing products online.

Documents Required to Obtain E-commerce Business in Thailand

To acquire an e-commerce license in Thailand, the applicant must provide the following documents at the District Office of the province of the main office (if outside of Bangkok) or at the Bangkok Metropolitan Administration:

1. Application for e-commerce registration (Tor. Por. form with the attachment), including details of your website.
2. ID card or passport of the applicant:
   • For an individual: ID card or passport
   • For a juristic person: ID card or passport of the authorized director and the company affidavit
3. Power of attorney (if applicable)
4. Clarification letter (in the event of late registration)

Information Required to Obtain E-commerce License in Thailand

To apply for an e-commerce license in Thailand, the website must be operational, and the website owner must provide the following details:

• Website name.
• Nature of goods or services sold.
• Start date of website operation (application must be made within 30 days).
• Payment methods accepted.
• Domain name registration or certification document from the service provider.
• Map showing the business location.

In case the commercial operator doesn’t have a landlord, the following additional documents are required:

• Letter of consent to use the premises or a rental contract.
• Copy of the location owner’s ID card and house registration or documents showing ownership of the property.

When and how to apply for an e-commerce license in Thailand?

Online business owners must obtain an e-commerce license within 30 days of starting operations. To do so, an application form must be submitted either to the District Office where the head office is situated or to the Bangkok Metropolitan Administration.

If your head office is outside Bangkok, you have to apply to the Provincial Administration Organization. 

In case the process seems daunting and you are unable to pave through the correct path or channels, let us help you out. Our team of experienced Thai corporate law professionals and licensing experts will surely take you out of the dilemma. Email us at officer@konradlegal.com.

BOI Thailand Promotions for IT Companies - Annoucement 2024

 

This article is for both business owners and aspirants planning to register their business in Thailand, particularly in the Information Technology industry. Board of Investment (BOI) Thailand has made certain replacements in benefit schemes in the existing eligible service categories to boost the Information Technology industry.

On March 15, 2024, Thailand's Board of Investment (BOI) implemented a new set of investment incentives for software development and data centers. This regulation replaces the previous categories of software or platforms for digital services or content (category 8.1) and data centers (category 8.2.1).

Software and Platform Development

The BOI's new promotion policy distinguishes between "development" and "improvement" of software or platforms by creating separate subcategories with unique incentives for each. The forthcoming announcement from the BOI is expected to provide further clarification regarding the specifics of these two activities. Notably, qualifying development efforts are eligible for a corporate income tax (CIT) exemption for a limited duration of eight years, whereas improvement activities do not qualify for any CIT exemption.

Several changes have been made to the eligibility requirements for creating digital services or content platforms and software. Specifically, these include:

• Effective immediately, salary expenditures for Thai IT personnel hired temporarily after applying for investment promotion can be included when calculating the total salary expenditures for Thai IT personnel hired after applying for investment promotion.
• For calculating actual expenditures, the project can include salary expenses related to the temporary hiring of Thai IT personnel in the year it intends to avail of the CIT exemption.
• The promotion certificate's issuance starts a 12-month clock for projects to begin operations. Extensions are not an option.
• The period of machinery importation has now been discontinued for projects.

The eligibility requirements for the development of software, platforms, and content for digital services remain consistent.

Projects related to the enhancement of software and platforms for digital services or content within the new BOI subcategory are not entitled to CIT exemption. However, they are eligible for alternative incentives. To qualify for these incentives, projects must adhere to specific criteria.

• Expenditures on salaries for Thai IT personnel hired (including temporarily) after applying for investment promotion must be at least THB 1.5 million per year.
• Projects must propose a plan for improvement of the software, digital platform, or digital content to be sold or provided, as stipulated by the BOI.
• Projects may not amend the category in which they benefit from investment promotion.
• Projects must commence operations within 12 months of the promotion certificate being issued. No extensions are allowed.
• Projects may not extend the machinery importation period.
• Projects may not own land.

Furthermore, projects within this subcategory are uniquely permitted to utilize previously owned machinery or leverage existing machinery associated with the project, deviating from the typical BOI prohibition against such practices.

Data Centers

Qualifying data centers are still eligible for CIT exemption (no cap) for eight years, but there are minor updates to the eligibility criteria:

• Projects must install an electrical system of at least two megawatts to support the power consumption of computer equipment.
• Projects no longer require an area of at least 3,000 square meters.
• Projects must still obtain ISO/IEC 27001 certification before they can receive CIT exemption. Still, there is no longer an explicit requirement that they get the certification before the full operation deadline.

In addition, projects in the data center category are exempt from the general BOI requirement that projects benefiting from investment promotion obtain ISO 9000, ISO 14000, or other equivalent international certifications.

If you are already running a software development company or data center in Thailand, in addition, to being eligible for the general BOI Benefits, the ones mentioned in this article also add to the list. If you still haven’t applied for the Board of Investment of Thailand promotions for your existing company in Thailand, we can help. Furthermore, we can also help you in the process of starting a BOI company in Thailand.

Email us at officer@konradlegal.com to get in touch with our team specializing in supporting companies to avail of the Board of Investment privileges in Thailand.

What Licenses Are Needed to do Business in Thailand?

 

Rapidly evolving as the business hub of Southeast Asia, Thailand is becoming one of the most preferable destinations to attract foreign direct investment. If you are planning to register your company in Thailand, then you must go through this article. This article will guide you comprehensively on the requirements of respective licenses to do business in Thailand.

We all know that simply registering a company can never serve your purpose of operating the same. To operate you will need relevant permits and licenses. In Thailand, the regulations are pretty stringent and non-adherence can lead to severe penalties. This article will serve well as your guide to knowing about the licenses that may be mandatory for your upcoming business in Thailand.

Do You Need a Business License in Thailand?

First of all, you must know whether the type of company or business you are going to set up in Thailand needs a business license or not. To ascertain these facts, check out the following pointer:

1. Will you set up a company in Thailand or a branch or representative office of your existing business?
2. What will be the “nature of business” and in which industry will you be doing it?
3. Are you going to bring in foreign nationals to Thailand as your employees?
4. Is your business eligible for relaxation under any bilateral treaty between your nation and Thailand?
5. Have you checked about the Board of Investment Promotions in Thailand? Is your business eligible for any BOI Privileges?

Depending on your answers to the above questions, you can ascertain whether you need a business license in Thailand or not. However, it is always wise to consult with a reliable corporate law firm in Thailand to reach this decision. Remember that this is a statutory requirement and you must make an informed decision to prevent any type of penalties or fines in the future.

To make the process simpler, we have answered these questions comprehensively. This will help you have a basic understanding before you speak with any corporate lawyer in Thailand.

License Requirement based on your Business Structure in Thailand

Foreign investors can incorporate 6 types of business structures in Thailand. You should select a business structure that complies well with the nature and purpose of your business in Thailand.

For your information, almost all types of businesses in Thailand need a Foreign Business License. Foreign Investors must apply for a Foreign Business License in Thailand to start their business in Thailand as various business verticals are restricted for foreigners in Thailand.

However, if you are planning to start a representative office in Thailand, you need not apply for a Foreign Business License in Thailand. Furthermore, there are requirements based on the nature and industry of your business in Thailand that ascertain your license requirements.

Your Business Nature and Industry Finalizes Your License Requirements in Thailand

As talked about in the previous section, a Foreign Business License is mandatory for almost 99.9% foreign investors, unless, they plan to start their representative office. However, the nature and industry of your business invoke certain license requirements as follows:

Medical License

Starting a medical company in Thailand necessitates obtaining specific licenses. The type of license needed depends on the activities undertaken in the medical field.

If you plan to operate a service business like a rehabilitation center or nursing home, you must acquire a medical service business license from the Department of Health Service Support.

For medical manufacturing activities, if your factory has machinery totaling 50 or more horses or employs 50 or more people, you’ll need a Factory license from the Department of Industrial Works. If neither of these criteria is met, you should apply for a Business Establishment license from the Local Administration Organization.

Before conducting any clinical research, a Science Laboratory Capacity Certificate from the Department of Medical Science is mandatory.

Moreover, according to the Thai Drug Act Be 2510 (AD 1967), obtaining permission from the Food and Drug Administration (FDA) is essential before marketing medical equipment, pharmaceutical products, or medical food.

E-commerce License in Thailand

In Thailand, businesses that run one or more websites to sell goods or services must obtain an e-commerce license. The application can be submitted once the website is operational and requires the following details from the website owner:

• Name of the website
• Nature of goods or services sold on the website
• The date on which the website started operating (application should be made within 30 days from the start date)
• Method of payment for purchases
• Document evidencing the domain name registration or certification document from the service provider (ISP or web host)

Check out why you should start an e-commerce business in Thailand.

Licenses for Restaurants and Bars in Thailand

In Thailand, the licenses needed by a restaurant depend on the services it offers. However, some obligatory licenses are required by most restaurants.

These licenses include:

• Restaurant license: This license is a must for establishments with premises of at least 200 square meters. Thai eateries smaller than 200 square meters need a certification of notice.
• Liquor license: This license is required for restaurants serving alcoholic drinks on their premises.
• Music license: Restaurants with live music or any music playing on their premises must obtain this license.

All these licenses are granted for one year and must be renewed annually by the restaurant.

License for Financial Services Businesses in Thailand

In Thailand, companies aiming to provide financial services must secure specific licenses from the Bank of Thailand. These services include commercial banks, finance companies, credit finance companies, asset management companies, and e-payment channel services.

Furthermore, specialized financial institutions aligned with governmental policies fostering investment and economic growth within Thailand require additional authorization from the Ministry of Finance.

Import/export Licenses in Thailand

Certain import/export companies in Thailand require specific business permits based on the category of goods being traded. Specialized licenses are mandatory for importing controlled goods like food, medicines, and cosmetics from Thailand’s Food and Drugs Administration.

Additionally, a permit from the National Broadcasting Department is necessary for importing electronic devices like mobile phones. Finally, a customs paperless license from Thailand’s customs department is necessary for import/export companies to facilitate the movement of goods under their name.

License for Travel Agencies in Thailand

In Thailand, running a travel agency necessitates a Tourism Authority of Thailand-issued Tourism license. Without this license, there are prohibitions on arranging and selling tours and packages, booking accommodations, and distributing travel tickets.

The license is divided into three categories: inbound tourism (serving foreign visitors to Thailand), outbound tourism (catering to Thai travelers going abroad), and domestic tourism (serving Thai travelers within Thailand).

A majority of Thai ownership is necessary for travel agencies in Thailand, and a local director’s signature is mandatory to obtain the tourism license. Notably, there may be restrictions to the local director’s signing authority to matters directly related to the tourism license. This structure allows foreign shareholders to maintain control over other aspects of the business’s activities.

Education Business License in Thailand

When registering an education business in Thailand, a license and approval from the Ministry of Education or the Department of Social Welfare are essential prerequisites. The type of education offered by the business determines which authority must grant the approval.

Before starting an education business, you need to consider several key factors, such as the business premises and the legal structure of the company. Any deficiencies in addressing these elements correctly will lead to the rejection of the application for the required license.

Other Factors Confirming Requirements of License to do Businesses in Thailand

To bring in Foreign Workers to work for business in Thailand

Every foreign worker you bring into Thailand must hold a valid work permit to work for your company. It is your responsibility to facilitate the process of work permit issuance for your foreign employees. In the process, a valid commercial and business license is one of the mandatory documents for the same.  

Bilateral Trade Treaty between Thailand and native nation of Investor

The need for a foreign business license is to permit foreign investors to undertake business activities that are normally only for Thais. However, certain bilateral trade treaties expand the scope of availability of business verticals in Thailand to the respective natives. Therefore, it is always advisable to check if your nation holds a bilateral treaty with Thailand and check the permitted business categories.

Eligibility to obtain Board of Investment Promotion in Thailand

Although a Board of Investment promotion never exempts the requirements to obtain any relevant license, yet, there are discounts on licensing fees. Therefore, if your business becomes eligible for BOI Promotion in Thailand, check if you are getting these benefits or not. This will reduce your setup cost significantly.
Business licensing in Thailand covers a wide range of considerations. You must avail the consultation of some reputed corporate lawyer or law firm in Thailand. To set up an appointment with us, email us your license requirements at officer@konradlegal.com.

Mistakes to avoid before Starting Foreign Business in Thailand

 

Are you a foreign investor with plans of starting a business in Thailand? There are numerous great reasons for foreign investors to start a business in Thailand, due to which the kingdom is growing rapidly as the business hub of Southeast Asia. However, in our practical experience, we have seen global investors committing great mistakes due to which they either fail to incorporate their business or operate it properly in Thailand.

Surprisingly, the mistakes are done mistakenly!

Yes, and the primary reasons behind these mistakes are as follows:

1. Complex Thai Civil and Commercial Code
2. Unclear assumption of the Foreign Business Act of Thailand
3. Inability to adhere to the documentation protocols
4. Complex licensing and tax registration standards
5. Difference in International Financial Revenue Standards (IFRS) and Thai Financial Revenue Standards (TFRS)

Many other uncertain causes compel foreign investors to make mistakes in the process of starting a company in Thailand. These causes depend on the level of knowledge and personal preferences of the investors. Therefore, finding out the accurate cause is pretty difficult.

As a leading corporate law firm in Thailand would like to point out the major mistakes that you must avoid in the process of company registration in Thailand.

Selecting Improper Business Structure

There are 6 prominent business structures for foreigners in Thailand. However, each of these business structures comes with its own set of characteristics and aspects of liabilities for the owner. Therefore, while starting your business in Thailand, you should not make any mistake in selecting the business structure, Following are a few suggestions:

• Never assume that you need a Limited Company on a mandate to start your business in Thailand. You should explore other options like limited partnerships or sole proprietorship options as well.
• If you already have an existing business in your home nation, try to go for a representative or branch office type of business structure in Thailand. This will incur less investment and is easy to incorporate.
• Try to avoid incorporating subsidiaries. The incorporation of subsidiaries follows a complex registration process and has tough compliance standards. Furthermore, it grants limited liabilities to owners.

Ignorance in the Documentation Process

To incorporate any type of business structure in Thailand, documentation and paperwork needs special attention. The complexity of the Thai Civil and Commercial Code,  Foreign Business Act, and TRFS may seem to be a maze to you. Take the help of some reliable corporate law firms in Thailand like Konrad Legal and keep in mind the following aspects:

• Cross-check and ensure that you submit all the documents as necessary for the application.
• You have to consider Thai as the official language. Although English translations are accepted officially, certain document requirements must be in the Thai language.
• You must demonstrate your financial stability. Do so by providing the correct documents as per the mandate of the application of the type of company you are incorporating.

Not Obeying the Timeframe

Many foreign business registration processes get hindered due to the lack of patience. You must remember that every application and statutory registration process in Thailand has a stipulated timeframe. Therefore, for your company registration in Thailand, you should:

• Do not rush to arrange the documents. Keep your calm and arrange for all the necessary documents.
• Avoid expecting instant results as the minimum duration of company registration can be of few weeks. In case your documentation is incomplete or lacks clarity, it may extend to months.

Remember that there won’t be any shortcuts to decrease the timeframe. Therefore, support from a corporate law firm can make the documentation process perfect which will automatically make your process adhere to the natural timeframe.

Mistaking the Compliance Obligations

If you stick to the above guidelines, you will never face any issues in registering your business in Thailand as a foreigner. But, mere registration is not enough. There are various post-registration tasks that you should never neglect.

Corporate Income Tax Registration: Your business will have a valid legal entity only if it is tax compliant. Therefore, your business must have a tax ID for which you have to apply for corporate income tax registration in Thailand.

VAT Registration: If your business anticipates annual revenue of over 1,800,000 Baht must register for Value Added Tax (VAT) with the Thailand Revenue Department. VAT registration is also mandatory for Thai businesses sponsoring foreign workers’ work permits. Additionally, Thai corporations must acquire a business permit by registering for VAT. 

Essential Licenses and Permits: Depending upon the type of business, you must equip your new company with the necessary licenses and permits after incorporation. Examples are travel licenses for tourism businesses, alcohol licenses for bars, etc. 

The Bottomline

The greatest mistake that a majority of foreign investors make while starting their business in Thailand is having an assumption of “I can handle it alone”. It won’t be possible as we have witnessed that even Thai persons make mistakes on regulatory and statutory compliances. 

Therefore, it is always a wise decision to take the support of a local Thai corporate lawyer or corporate law firm. By doing so, you will be free from the following stresses:

1. Understanding and communicating in the Thai language
2. Translation of documents from English or your native language to the Thai language
3. Notarization of documents
4. Maintaining application requirements and error-free documentation
5. Identifying the right authority to put forth your application 

There can be various other grounds on which you may seek help including the post-incorporation license and permit applications. To get a combined service of company incorporation, accounting and taxation, and payroll management, we can help you throughout. All you have to do is go on a free consultation with us. Email us at officer@konradlegal.com to book your appointment with our legal, accounting, and tax experts in Thailand.

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 unable to think of anything else than 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!