Thailand is ranked 21st among 190 economies considering the Ease of Doing Business index. The list is published by the World Bank. So, Thailand is definitely an excellent destination for doing business. That makes many foreigners interested about company registration in Thailand. At the same time, they are willing to know the Company Registration Fee in Thailand.
We have done comprehensive research and found some common legal mistakes that affect a business badly. If you can avoid those common legal mistakes foreigners make when doing business in Thailand, your business will stay ahead of others in the competitive Thai market. You will be able to make an informed decision about company registration in Thailand for foreigners.
5 Common Legal Mistakes Foreigners Make When Doing Business In Thailand
Mistake 1: Investing Without Proper Research
Mistake 2: Unaware Of the Foreign Business Act (FBA)
Mistake 3: Lack Of Planning About Company Structure
Mistake 4: Unaware Of Thai Labor Laws
Mistake 5: Lack Of Knowledge About Tax
Mistake 1: Investing Without Proper Research
According to the prediction by Economic experts, Thailand’s GDP is going to reach approximately $640.2 billion in 2025. Some businessmen and startups start investing just by seeing the economic growth. This is the first mistake foreigners make when doing business in Thailand. You have to think about opportunity and competition at the same time.
So, you should do proper research about the current industry. You have to consider factors like potential risks, business trends, targeted audience, purchasing behavior, competitor analysis, etc. After doing that research, you will be able to make a better decision about whether you should invest in this sector or not. If you proceed to company registration in Thailand through S & F CONSULTING FIRM CO. LTD they will guide you through that.
Mistake 2: Unaware Of the Foreign Business Act (FBA)
Foreigners who are going to set up a company in Thailand must know about the Foreign Business Act (FBA). It will give them a better understanding of the restrictions on foreign ownership in Thailand. According to this law, businesses are listed into three categories, List 1, List 2, and List 3. List 1 businesses are not eligible for foreign ownership.
List 2 businesses are restricted. You can get ownership of those businesses as a foreigner. But you have to get permission from the Ministry of Commerce and Cabinet. List 3 Businesses that need the foreign business license. It is issued by the Director-General of the Department of Business Development. S & F CONSULTING FIRM CO. LTD can assist you through the entire Thailand company registration process.
Mistake 3: Lack Of Planning About Company Structure
You can not survive in any business sector without proper planning about the company structure. Some foreign entrepreneurs and investors start their businesses in Thailand without planning about the company structure. This is going to hurt a business in the long term. Most foreigners prefer to start a “Limited Company” in Thailand.
You should know about the legal structure and specific requirements of a Thai Limited Company. There are some mandatory laws to follow. For example, at least two shareholders are mandatory for a Thai limited company. You can bypass that requirement through special approvals. An experienced company formation consultant company like S & F CONSULTING FIRM CO. LTD can help you to get the approval.
Mistake 4: Unaware Of Thai Labor Laws
To operate a business in Thailand, you must follow the Thai labor laws strictly. The Thai government is fully cautious about the labor laws for both foreign and local companies. In fact, you should learn about those labor laws while registering your business. It will help you to understand how to treat laborers.
You should study the Alien Employment Act. It describes the regulations that foreigners are permitted to perform in Thailand. There are some special rules for foreign employees. They need to hold a valid work permit. Minimum wages, working hours, and employee benefits should follow the guidelines of the Thai Labor Laws.
Mistake 5: Lack Of Knowledge About Tax
Last but not the least, you must avoid any unwanted scenarios related to the tax payment. Otherwise, you have to face penalties and other legal issues. Many foreigners are unaware of the tax of operating a business in Thailand as foreigners. As a foreigner, you have to pay a Corporate Income Tax (CIT) at 20% of the total net profits.
Also, there are some additional requirements when the annual revenue surpasses 1.8 million THB. You should have VAT (Value Added Tax) registration at that point. So, you should consult with an accountant and know about the taxes that you are supposed to pay. You can make informed decisions on Business setup in Thailand cost. It will make your path smooth for setting up a company in Thailand..
Sum Up
Making any of those common legal mistakes foreigners make when doing business in Thailand will lead to an unwanted situation in your business. Thankfully, you already know about those mistakes. So, it will be easier for you to avoid them when you register company in Thailand.
If you have any queries about company registration in Thailand for foreigners, feel free to contact S & F CONSULTING FIRM CO. LTD. They are highly experienced in this sector and they will assist you throughout the process maintaining 100% transparency.
FAQ
What are the challenges of doing business in Thailand?
A. Company ownership restrictions, complex regulatory environment, work permits, visa issues, language barriers, and labor hiring restrictions are the common challenges of doing business in Thailand. You can pass those challenges with expert guidance.
Can foreigners own 100% of a business in Thailand?
A. According to the law of Foreign Business License (FBL), foreigners can own 100% of a Thai Limited Company. There are some specific business sectors and types of business where foreigners cannot own the business 100%.
Can a foreigner do business in Thailand?
A. Yes, a foreigner can do business in Thailand. To do that, the foreigner should apply for a Non-Immigrant Visa. S & F CONSULTING FIRM CO. LTD can assist foreigners with company registration in Thailand.
What is the biggest challenge for businesses in Thailand?
A. Foreign ownership consideration is the biggest challenge for business in Thailand. Different types of ownership restrictions are eligible in different businesses. You can know more in detail by discussing Expert Business Registration Consultant at S & F CONSULTING FIRM CO. LTD.
Are there any trade barriers in Thailand?
A. Yes, there are several trade barriers in Thailand. Sanitary and Phytosanitary (SPS) Measures, Import Requirements & Documentation, Prohibited and Restricted Imports, Customs Regulations, and the WTO Agreement on Government Procurement are some of those.
What are the most common challenges that a business must overcome?
A. Planning for the future, continuous improvement, adapting to the required industrial changes, and ineffective marketing are some most common challenges that a business must overcome.
Sources:
https://tradingeconomics.com/thailand/ease-of-doing-business
https://en.wikipedia.org/wiki/Economy_of_Thailand
Author Bio:
Writer:
Content Is Written By:
Mia Biajid – Business & Finance Content Writer
Mia Biajid is a professional content writer with six years of experience in writing informative content in the business sector. He has a deep understanding of market trends, entrepreneurship, and financial strategies. Mia specializes in delivering insightful articles that help businesses to grow. His expertise covers business development, investment insights, and corporate strategies. Having that much experience makes him a trusted voice in the business industry.
Reviewer:
Article Reviewed By
Md Forhad Hossain
(BA-Hons, MBA, LL.B, LL.M)
Meet Md. Forhad Hossain – is an expert in company registration with over 14 years of experience. He has helped more than 400 businesses in Malaysia and over 7,000 clients from around the world start their journey successfully.
Forhad is passionate about making business registration simple and stress-free. His knowledge and dedication have earned him the trust of entrepreneurs worldwide.
If you’re looking for someone to guide you, Md. Forhad Hossain is the name you can Rely on. Social: Linkedin Youtube
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