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!

Apply for Residence Certificate in Thailand

 

Do you want to apply for a Thai Certificate of Residence? Before you do so, do you know what are the other names of this document? It is also known as Yellow Tabien Baan or Yellow House Book! However, it will be more important for you to know about its necessity in Thailand. Also, correct information on the process of application and obtaining a Thai Certificate of Residence is also necessary. This is indeed one of the most sought-after information for foreigners in Thailand.

Before sharing the details of obtaining a Thai Certificate of Residence, let us clear some misconceptions. We often encounter such statements when we interact with people applying for Permanent Residence in Thailand. 

1. A Thai Certificate of Residence may not be a Permanent Residence Certificate by mandate. There are semi-permanent provisions also in this case. Consult with the embassy or a leading Thai immigration agency to have clarity.
2. Please don’t confuse the TM30 receipt with a Certificate of Residence. It is simply a receipt! It is no more than an acknowledgment subject to verification and validation.
3. If you are from the US, your application fee will be different from that your friend from Australia might pay. The cost of application for a Thai Certificate of Residence varies on the basis of the policies of each Consulate.
4. You will never be able to apply for a Thai Certificate of Residence without finishing your 90-day reporting period. Don’t allow agents or agencies to misguide you on this. They often claim that they can help you get the certificate without submitting the 90-day report.
5. You can never use your Thai Certificate of Residence as a Visa. Although it can facilitate the process for you to obtain a Visa, yet, it is not a Visa.

Read ahead to have a clear understanding of the process and concept of a Thai Certificate of Residence.

What is a Thai Certificate of Residence?

A Thai Certificate of Residence is also known as a “Tor Mor 13” or “TM.13” certificate. It is a legal document from the Thai government that attests to a foreigner’s legal right to stay in Thailand.

Who is eligible to apply for a Thai Certificate of Residence?

Although there are various conditions applicable, yet, the following types of persona can apply for a Thai Certificate of Residence:

• Retirees who are at least 50 years old and meet the necessary financial requirements.
• Investors who meet the criteria set by the Board of Investment (BOI) or other relevant government agencies.
• Experts and Skilled Workers working in Thai companies or organizations.
• Spouses and Dependents of eligible foreigners.
• There are other special categories of individuals holding certain types of visas who may be eligible for the Certificate. The details of the special categories are regularly updated by the Thai Immigration Bureau.

What are the benefits of having a Thai Certificate of Residence?

Having a Certificate of Residence can make various administrative processes in Thailand more convenient. You can use this to open a bank account or obtain a driver’s license. Following is the list of several benefits of a Thai Certificate of Residence:

• Legal Residency: It serves as proof of legal residency in Thailand, which can be essential for foreigners living in the country for a longer period.
• Access to Services: Having a Certificate of Residence enables access to various government services and benefits, such as healthcare, education, and certain social welfare programs, that are available only for Thai citizens and legal residents.
• Property Ownership: It is useful during the purchase of certain types of property or land in Thailand. Foreigners can ease certain property ownership restrictions through this certificate.
• Banking and Financial Transactions: Some banks and financial institutions may require a Certificate of Residence for opening accounts, obtaining loans, or engaging in financial transactions.
• Work and Business: It can be beneficial for individuals working or doing business in Thailand, as it may be necessary for work permits, visas, and other legal requirements.
• School Enrollment: Foreign children residing in Thailand may need this certificate to enroll in local schools and access educational facilities.
• Long-Term Stay: For those seeking a long stay in Thailand, this certificate can facilitate the renewal of long-term visas.
• Documentation: It serves as an official document of your residence address in Thailand, which can be useful for various administrative purposes.

It’s important to note that the specific benefits and requirements of a Thai Certificate of Residence may vary depending on your immigration status, the region within Thailand, and government policies. 

How can I apply for a Thai Certificate of Residence?

The application process may vary depending on your eligibility and location. It’s generally advisable to contact the Immigration Bureau in Thailand or consult with a Thai legal advisor for guidance on the application process.

What documents will you need to Apply for a Thai Certificate of Residence?

To apply for a Thai residence certificate, you will typically need to provide several documents. Keep in mind that specific requirements may vary depending on your individual circumstances and the local immigration office’s policies. However, here is a general list of documents that you will need to apply for a Thai residence certificate:

• Application Form: You will need to complete the application form provided by the local immigration office.
• Passport: A valid passport with a non-immigrant visa.
• Proof of Address: You may need to provide proof of your current address in Thailand, such as a rental agreement or a utility bill in your name.
• Income or Financial Documents: Some immigration offices may require proof of sufficient financial means to support yourself while residing in Thailand. This can include bank statements, a letter from your employer (if you’re employed in Thailand), or evidence of a pension or retirement income.
• Health Insurance: Some regions in Thailand may require proof of health insurance coverage that meets their specific criteria.
• Criminal Background Check: Depending on your visa type and nationality, you may be asked to provide a police clearance certificate or a criminal background check from your home country.
• Passport Photos: Typically, you will need recent passport-sized photos of yourself.
• Additional Documents: Depending on your specific situation, the immigration office may request additional documents, such as marriage certificates (if applicable), birth certificates, or evidence of any dependents.
• Translation and Notarization: If any of your documents are not in Thai, you may need to have them translated into Thai and notarized.

What is the fee to apply for a Thai Certificate of Residence?

Yes, there is typically a fee associated with obtaining a Certificate of Residence. The fee may vary depending on the type of residence permit you hold and other factors. In general, it is THB 1500 but can vary depending upon the policy of your Consulate.

How long does it take after Applying for Thai Certificate of Residence?

The processing time can vary, but it may take several weeks or even months to receive a Certificate of Residence. It’s advisable to apply well in advance if you have plans that require this document.

Can I use a Thai Certificate of Residence for Visa purposes?

While it may be helpful in certain visa applications, the Certificate of Residence itself is not a visa. You should consult with Thai immigration authorities or your embassy/consulate for visa-related matters.

What if I lose my Thai Certificate of Residence?

If you lose your Certificate of Residence, you should report it to the authorities and follow the necessary steps to obtain a replacement.

The Bottomline

We hope that by now you have a clear understanding of the purpose of a Thai Certificate of Residence along with the process to obtain the same. 

To sum up, an official document with your present address is called a residency certificate, which can be permanent or semi-permanent in nature. In the case of semi-permanent identity, it will be subject to renewal. You can receive the certificate from the neighborhood immigration office or the embassy that is in charge of representing your native country. Please be aware that a TM30 receipt is not a certificate of residence.
Feel free to contact us for more details on the same and to avail of our professional support to apply for Thai Certificate of Residence, email us at officer@konradlegal.com. Our team of expert Thai immigration specialists will communicate back within 1 Thai working day.

Permanent Establishment for Foreigners in Thailand

 

Thailand is one of the most popular destinations for investors from across the world to start business ventures. Being the gateway of Southeast Asia, Thailand is a cradle of opportunity for these investors in their desired business domain. There are LLPs, Representative Offices, Branch Offices, and Regional Headquarters of foreign investors and companies operating in Thailand. Yet, as a leading law and accounting firm in Thailand, we often receive requests for Permanent Establishment (PE) Registration in Thailand. This article aims to clear the concept and process of getting a permanent establishment in Thailand.

What is a Permanent Establishment in Thailand?

We often come across statements that make us feel that people often assume a “Permanent Establishment” to be a physical business body. It’s not that!

A foreign company becomes a permanent establishment in a said jurisdiction when it maintains a stable and consistent presence in any nation outside their home country and therefore, becomes tax-liable in the nation they are operating in. For example, if you are from the United States and have a business in Thailand that is paying tax in Thailand for their profit in Thailand, you are very likely to hold a permanent establishment status.

To make the concept simpler, a PE is a company or business creating a taxable presence outside its home territory or nation. However, for PE status in Thailand, companies must meet the following criteria:

1. The business is established in Thailand
2. The place of the business in Thailand is fixed or permanent
3. The establishment in Thailand wholly or partly operates the business

Do you already have a business in Thailand that meets the above-mentioned criteria? Note that you may not be able to enjoy the benefits of a double tax treaty between your nation and Thailand if your organization in Thailand holds the PE status. Therefore, now is high time to consult with a reliable corporate tax firm in Thailand to check and claim your status.       

Categories of Permanent Establishments in Thailand

The categories of business resulting in various types of permanent establishments are subject to change with the evolution of business practices and technologies involved. However, the three primary types of PEs in Thailand are as follows:

Asset Permanent Establishments (PE)

A business can hold the Asset PE status only when there is a provision in a Double Tax Agreement (DTA) between their native country and Thailand. If the DTA permits, a foreign investor or business in Thailand can be a PE in the following business structures:

• Business management unit
• Branch Office
• Normal Office generating revenue in Thailand
• Factory or Workshop
• Mine, Oil or Gas Well, Quarry, or any place of extraction of Natural Resources
• Farm or Plantation
• Warehouse or Storage Facilities

Although the list is not limited to the ones mentioned, yet, these are the primary categories. However, if any of the listed business units conducts the following activities, it will not be considered as a PE:

• Use of the fixed place of business only to store or display goods or merchandise of the company.
• Use of premises only to maintain stocks of goods or merchandise of the same company or another firm.
• Maintaining a fixed place of business with the sole purpose of purchasing goods or merchandise or collecting information for the company.
• Using the fixed place of business with the sole purpose of advertising, information sharing, research, and/or activities that are purely preparatory or auxiliary in nature.    

Furthermore, a foreign business in Thailand can have multiple units involved in storage, preparatory, and auxiliary activities without gaining PE status. If you analyze, you will understand that all these businesses are not focusing on revenue generation instantly. Therefore, they are not liable to pay tax and hence cannot be eligible to gain PE status.

Nevertheless, if you are planning to open a Representative Office in Thailand, you may not be eligible to register your business as a PE in Thailand.

Activity Permanent Establishments (PE)

Foreign establishments in Thailand carrying on activities related to construction, building sites, or installation or assembly projects can form an Activity PE. All the said or similar activities that DTA permits and that have been going on in Thailand for more than 6 months endorse the business with a PE status. 

Therefore, if you are planning to start a manufacturing company in Thailand, you must check with a reliable corporate law firm in Thailand. Maybe, you are going for a Permanent Establishment Registration in Thailand!

Agent Permanent Establishments (PE)

If a foreign business in Thailand falls eligible under the respective DTA and meets the following criteria, it can form an Agent Permanent Establishment (PE):

• A person with permission to routinely negotiate and sign contracts for sales on behalf of a foreign company in Thailand.
• A person who routinely maintains a supply of goods from which he fills orders or sends packages on behalf of the foreign company.
• A person who regularly obtains orders in Thailand that are fully or nearly fully completed for the foreign company or other businesses that it controls or that it owns a controlling interest in.

However, a foreign company cannot have an “Agent PE” in Thailand if it is handled through a broker, general commission agency, or any other agent of an independent standing.

Permanent Establishment Registration in Thailand

If you have read till here, it must have been already clear that there is nothing in particular that can be termed as “Permanent Establishment Registration in Thailand”. PE is an international taxation concept that is governed to a great extent by Double Tax Agreements (DTAs).

It all depends on the type of business and activities conducted by a foreign business in Thailand. Under the guidelines of respective DTAs, if your foreign business and its activities gain PE status, you may not be able to avail of the DTA benefits in terms of taxation.

Permanent Establishment in Thailand is a critical concept and to understand the same, both expertise and experience in the domain are necessary. Therefore, if you are planning to start a business in Thailand and want it to have a PE status, consult with a firm that deals with similar matters. You can simply email us at officer@konradlegal.com. Whether you are a registered foreign business or going to start the same in Thailand, our team of expert Thai corporate law and tax professionals will surely identify the PE Scope for your business in Thailand.

How to Register NGO in Thailand?

 

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 Southeast 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 is involved 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 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.

How can Australians Register Company in Thailand?

 

Thailand is fast becoming a rich northern frontier for Australian business. Additionally, it is a commanding gateway to the region’s economic powerhouses India and China. Thailand also connects well with Indochina and the Greater Mekong sub-region. So, this article aims to explain the process of how Australians can set up a company in Thailand in a hassle-free way.

Please note that Thailand ranks among the top 10 most attractive countries in the region for investment for over the last three to five years. Moreover, there are research reports demonstrating the reassurance of foreign investors by the abundance of suitable suppliers, raw materials, and development of infrastructure in Thailand.

Thailand hosts more than 300 Australian companies. Furthermore, these companies generate a two-way Thai-Australian trade revenue of over $19 billion annually, with great expansion and growth opportunities. Additionally, Australian investors are also accessing a range of additional benefits and protections under the Thailand-Australia Free Trade Agreement (TAFTA).

Key Facts One Must Know Before Starting Business in Thailand

Continuity of business is always more important than starting one. Therefore, there are some factors that you must know to ensure the stability of the business you wish to start in Thailand. The following points will help:

• Thailand is the second-largest economy in Southeast Asia.
• In 2020, Thailand ranked second in Southeast Asia for external world trade volume.
• The Thai Government is committed to significant investment in social and economic infrastructure. Therefore, the kingdom recently announced a THB 1.8 trillion infrastructure upgrade across the country.
• It is worth mentioning that Thailand is the 5th largest FDI recipient in East and South-East Asia (USD 19.5 billion), behind the economic giants of China, India, and Singapore.
• Thailand holds the world’s largest medical tourism market. Note that, this is the result of low-cost medical treatments and high-quality healthcare. Furthermore, Thailand boasts business opportunities for healthcare service providers. Additionally, the Thai government offers various investment incentives for the manufacturing of medical food and equipment.
• The World Bank Doing Business Report 2019 ranked Thailand as the 21st easiest place in the world to do business.
• CBRE continues to rank Bangkok as the least expensive market in Asia to rent prime office real estate, with an average rent of USD 27.99 sq.m. p.a.

Australian citizens and business entities may find an easier path to set up a company in Thailand through the Thailand-Australia Free Trade Agreement (TAFTA). However, TAFTA has more limitations than the US-Thai Treaty of Amity, yet, under certain conditions, permits the establishment of businesses with a majority of Australian ownership.

How Does TAFTA Help Australians to Setup a Company in Thailand?

The Thailand-Australia Free Trade Agreement has been in force since 2005. Moreover, between Thailand and Australia, TAFTA reduces and eliminates tariffs and quotas. Additionally, it grants Australian investors in Thailand special privileges. 

How are TAFTA Companies different?

Most other majority-foreign-owned businesses must comply with the Foreign Business Act (FBA). Furthermore, the FBA places restrictions on the kinds of businesses that foreign companies can run. However, these restrictions are either outright banning them or necessitating the acquisition of a Foreign Business License (FBL). Therefore, companies applying for an FBL will find themselves under a great deal of scrutiny. Furthermore, there will be less risk of the Department of Business Development (DBD) denying their application. Please note that the DBD scrutiny is very stringent and any small mistake in the application will lead to its cancellation.

However, an Australian business applying for a Foreign Business Certificate (FBC) under TAFTA will have a higher chance of getting approval from the DBD. Note that, the main qualification would be the sector-specific limitations. However, the sector-specific limitations may hinder the business goal of an investor. Furthermore, the Board of Investment Promotions can help Australians Set Up Companies in Thailand with up to 100% ownership in some more sectors.

Can TAFTA Companies be 100% Australian Owned?

Unlike the Thai-US Amity Treaty, which allows 100% US ownership, TAFTA only allows 100% Australian ownership in two sectors. Furthermore, TAFTA permits 100% Australian ownership only in two sectors. Whereas, the Thai-US Amity Treaty permits 100% US ownership in many sectors. Please note that the other sectors under TAFTA can enjoy 60% Australian majority ownership. However, 60% foreign ownership is also a great share as it is not possible for foreign investors from many other nations. 

A 100% fully Australian-owned company in those sectors is possible, but not under TAFTA. Therefore, this would entail submitting an FBL application. Furthermore, it is reviewed more carefully by the Department of Business Development of Thailand. Please note that this process may take some more time.

Sectors Covered by TAFTA

Businesses can apply for an FBC under TAFTA as of the time this article was published if they intend to operate in one of the following sectors:

Eligible businesses sectors	Requirements	Maximum Australian Shareholding
Mining, on land or underwater	International Exhibition Center and services	60%
Construction of public utilities or transportation that requires special equipment, machinery, technology, or expertise	Must require special equipment, machinery, technology, or expertise with a minimum paid-up capital of THB 1 billion	100%
Luxury hotel or resort services	Minimum rooms: 100 and minimum paid-up capital of THB 800 million	60%
Full restaurant services	Minimum total area: 450 sqm and a minimum paid-up capital: THB 50 million	60%
General management consulting only for a Regional Operating Headquarters (ROH)	Services must be exclusively for ROH and ROH-related companies	100%
Convention services, not including F&B services	Minimum total area (interior + exterior) of 4,000 sqm and Minimum interior of 3,000 sqm	60%
Sales and installation support services only and the products must be manufactured in Thailand by the TAFTA company	Minimum total area (interior + exterior) of 50 rai (80,000 sqm) and a minimum interior: 25,000 sqm	60%
Wholesale and retail services	Minimum total area of 10 rai (16,000 sqm) with a minimum paid-up capital: of THB 200 million	100%
Post-secondary science and technology educational institute	a. Specializing in life science, biotechnology, nanotechnology, and related areas b. Located outside Bangkok and its metropolitan areas c. At least 50% of the institution’s council directors are Thai	60%
Theme park or zoo	Minimum total area of 200 rai (32 hectares) with a minimum paid-up capital of THB 1 billion	60%
Aquatic animal park	Minimum total area of 10 rai (16,000 sqm) with a minimum paid-up capital of THB 200 million	60%
Maritime support services	Must have ship-lifting equipment, pier, and maintenance service shipyard	60%

Eligibility to Apply for TAFTA

Your business needs to satisfy the following requirements in order to submit an FBC application under TAFTA:

Nationality

1. A juristic person is set up as a partnership or a private limited company under Thai law. Additionally, there are provisions for setting up Representative and Branch Offices in Thailand.
2. The authorized director(s) are Australian or Thai. Moreover, if the entity is a partnership, there must be one Thai managing partner.
3. Shareholding:
   1. All Australian or Australian and Thai, as the case may be
   2. Shareholding percentages comply with TAFTA
   3. Australian juristic persons must comprise over 50% of Australian shareholding.

Minimum Capital

TAFTA companies must follow capital restrictions under the FBA. Additionally, these companies must operate in the Sectors under the TAFTA section. Otherwise, THB 2 million is the basic minimum capital requirement for Australians willing to set up a company in Thailand.

KONRAD LEGAL UNDERSTANDS TAFTA

Generally speaking, the entire TAFTA FBC application procedure takes about 60 days. Therefore, Konrad Legal is happy to share all the options for Australians who want to set up a company in Thailand, whether through TAFTA or another structure. So, contact us today for your free initial consultation.

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!