Ready to Expand into Thailand? Here’s What You Need to Know

Thailand has become one of Asia’s most attractive investment destinations, a strategic hub connecting ASEAN, China, and India. The country offers modern infrastructure, skilled labor, and strong government support for foreign investors, especially in high-tech, renewable energy, and manufacturing sectors.

If you’re considering expanding into Thailand, the key to success is not just starting a company but setting it up the right way, legally, efficiently, and in line with local regulations. Based on more than two decades of experience advising global companies across different industries, here’s a practical overview of what every investor should prepare before doing business in Thailand.

1. Setting Up a Thai Company

The first step is to establish a private limited company. This process includes reserving a company name, preparing incorporation documents, and registering with the Department of Business Development (DBD). Careful planning at this stage is important because decisions about shareholding, directors, and registered capital affect everything from foreign ownership eligibility to tax planning and regulatory compliance later on. Getting the structure right from the beginning helps ensure smooth operations and future flexibility.

2. Applying for BOI Promotion (If Eligible)

If your business involves manufacturing, software, logistics, research and development, or green energy, you may qualify for investment promotion from the Board of Investment (BOI). A BOI-promoted company can enjoy valuable benefits such as 100 percent foreign ownership, corporate income tax holidays of up to eight years, land ownership rights, and faster visa and work-permit procedures for foreign staff. Before applying, it’s wise to conduct a short feasibility review to ensure your project fits BOI criteria and offers real advantages.

3. Obtaining a Foreign Business License or Certificate

Certain service sectors in Thailand are restricted under the Foreign Business Act (FBA). If your company has majority foreign ownership, you may need either a Foreign Business Certificate (FBC) if you have BOI promotion or a Foreign Business License (FBL) issued by the Ministry of Commerce. These approvals legally authorize your business to operate as a foreign-controlled company in Thailand.

4. Tax and Regulatory Registrations

Once incorporated, your company must register for Value Added Tax (VAT) if its annual revenue exceeds THB 1.8 million. This allows you to issue tax invoices and claim input tax credits. VAT registration requires a physical office address, not a virtual one. When you hire your first employee, you’ll also need to register with the Social Security Office, as both employers and employees are required to contribute to Thailand’s social security fund. If your business involves importing or exporting goods, registration with the Thai Customs Department is mandatory to clear shipments and access trade privileges. Finally, you’ll need to open a corporate bank account for capital injection, supplier payments, and payroll. Thai banks typically require company directors or authorized signatories to appear in person to complete Know Your Customer (KYC) verification.

5. Employment Matters

Every employee should have a written employment contract stating their role, salary, benefits, working hours, and termination terms. Thai labor law is protective of employees, and any condition that gives fewer rights than the Labor Protection Act will be invalid. If your company employs ten or more people, you must also prepare official Work Rules (an employee handbook in Thai) and file them with the local labor office. For foreign executives or staff, a Non-Immigrant “B” visa and work permit are required before starting work. If your company is BOI-promoted, these procedures are faster and simpler.

6. Building a Strong Legal Foundation

The steps above form the legal backbone of doing business in Thailand. Depending on your industry, additional permits, for example from the Food and Drug Administration (FDA), Energy Regulatory Commission, or other agencies, may be necessary. Completing these registrations properly not only ensures compliance but also enhances your credibility with Thai authorities, banks, and partners. A well-structured company stands out to regulators and clients as a serious, reliable business partner.

For consultation or further information about investing in Thailand, contact us at info@sop-law.com.