Doing Business in Thailand: Key Considerations for Scaling Operations
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This document provides an overview of considerations for doing business in Thailand. It discusses assessing readiness to scale into Thailand, including having the necessary capability, capacity, and market demand. It also addresses whether a new set of strategies is needed when expanding to Thailand, such as understanding differences in Thai consumers versus home markets. Finally, it covers factors to examine when entering Thailand with a local partner, like business structures, selecting partners, and protecting foreign business interests.
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Doing Business in Thailand: Key Considerations for Scaling Operations
- 1. PRIVATE & CONFIDENTIAL Doing Business in Thailand June 14, 2019
- 2. PRIVATE & CONFIDENTIAL Consideration Factor Procedure of Issuing a License Paddy advises business leaders on strategic planning and positioning, helping them to increase profitability and pivot their business to gain a competitive advantage in their respective industries. His love for technology is rivaled only by his passion for business. Paddy was the technical founder of an anti-theft software developed for electronic devices that he sold in 6 years later. His other expertise include IoT, Fintech, logistic, mobile security and manufacturing. After running several companies, Paddy has developed a strategic thinking process and framework to help companies with their growth and scalability challenges. Paddy is the resident mentor for BASH (Build Amazing Startups Here), where he offers advice to commercial accelerators, corporations and institutions of higher learning part of the accelerator programmes. He also serves as mentor and advisor to UOB FinLab, AIRmaker accelerator and Platform E companies. BIOGRAPHY https://www.linkedin.com/in/paddytan/ paddy@blackstormco.asia PADDYTAN Co-Founder
- 3. BLACKSTORM CONSULTING | 2019 BlackStorm Consulting is a boutique growth consultancy firm that specialises in corporate strategy, profit management and investment management. We mainly serve clients in four sectors: FinTech, Gaming, Technology, Media and Telecommunications (TMT), and manufacturing. Our clients and connections are internationally present and range from small and medium sized businesses, MNCs, to government agencies. We Growbusinesses Est. 2019 PRIVATE & CONFIDENTIAL
- 4. PRIVATE & CONFIDENTIAL BUSINESS TRANSFORMATION Weaknesses that hinder business growth Upcoming / existing threats that can wipe out your business Urge to make changes to the business to sustain position in the market Motivated by self-interest such as succession planning and building a legacy THE USUAL MOTIVATIONS: INTERNALWEAKNESSES EXTERNALTHREATS BUSINESS GROWTH CAN BE DONE SO BY: PRODUCTS It ranges from expanding or reducing product line to refining product categories MARKETS This includes identifying the type of customers to retain, launching existing products in new markets, and expanding the current markets PROCESSES Reducing costs by streamlining processes and increasing efficiency using technologies could greatly contribute positively to the bottom- line BUILD HIGHER BARRIERS OF ENTRY PERSONAL MOTIVATION
- 5. PRIVATE & CONFIDENTIAL Agenda WEBINAR 1. Overview ofThailand 2. Are you ready to scale intoThailand? 3. Do you need a new set of strategies? 4. Are you enteringThailand with a local partner? 30-MIN DISCUSSION 1 2
- 6. PRIVATE & CONFIDENTIAL Overview ofThailand
- 7. PRIVATE & CONFIDENTIAL Demographics ofThailand Source: Worldmeters , The World Bank 69 million 38.7million 38.3 years 35 % USD 6,126 1 % Size of Population (2019) Size ofWorking- age Population (2019) Median Age (2019) Size of Middle Class Population (2015) GDP per Capita (2017) Unemployment Rate (2019) • VS.15% in 2002 • 3.7% increase from 2016 • VS. Singapore: USD 54,301 with 2.1% growth from 2016
- 8. PRIVATE & CONFIDENTIAL Business Landscape ofThailand 2 27 34 68 100 0 20 40 60 80 100 120 Singapore Thailand Japan Vietnam India Ease of Doing Business Index (Ranking) Source: Trading Economies Development push Rising middle-class Low costs Gateway to CLMV Low English literacy (49.7%) Slow legal processes and policy- making Thailand 4.0, Eastern Economic Corridor OPPORTUNITIES CHALLENGES Easier Harder
- 9. PRIVATE & CONFIDENTIAL Over the last four decades,Thailand has moved from a low-income country to an upper-income country in less than a generation. Source: The World Bank
- 10. PRIVATE & CONFIDENTIAL Critical Questions to Consider Are you ready to scale intoThailand? Do you need a new set of strategies? Are you enteringThailand with a local partner? 1 2 3
- 11. PRIVATE & CONFIDENTIAL Are you ready to scale into Thailand?
- 12. PRIVATE & CONFIDENTIAL Premature scaling happens when entrepreneurs start “focusing on one dimension of the business and advancing it out of sync with the rest of the operation.” Premature scaling occurs in 70% of companies and is responsible for the failure of 74% of tech startups. Source: Startup Genome
- 13. PRIVATE & CONFIDENTIAL Are you ready to scale intoThailand? Capability and Capacity FundsTalents Market Demand
- 14. PRIVATE & CONFIDENTIAL Think in a Headquarter (HQ) Perspective What kind of supports is needed from the HQ? Does the business model require strong supports from the HQ? Do you need to set up a new team in HQ to handle the expansion? Is there a right candidate to run the initiative? Do you need to send someone from the HQ to do the knowledge transfer? Are there standard operating procedures and work processes that help both the HQ and new entity to coordinate well? Does the company have the capacity or able to build the capacity to handle additional market? CAPABILITY & CAPACITY 1 2 3 4 5 6 7
- 15. PRIVATE & CONFIDENTIAL Understand theThailand Investment Landscape • Startup scene is relatively new inThailand • There’s growing number of Venture Capitalists (VCs) and CorporateVCs inThailand • Tends to make early-stage investments, up to Series B • Existing legal hurdles affectingThailand’s competitiveness at the international level: • Rights of preferred shares in a private company cannot be altered • A private company is also prohibited from issuing convertible notes or bonds FUNDS Source: Baker McKenzie 1 2 3 4
- 16. PRIVATE & CONFIDENTIAL Understand theThailand Investment Landscape • Thai Government has been actively developing the startup community: • In 2016,Thai government launched a USD 570 million venture fund forThai startups, whereby USD 285 million will be allocated specifically for technology startup ventures • In 2016, State-owned SME Development Bank launched aTHB 1 billion venture fund • In 2017, Government Savings Bank (GSB) has launched two newVC funds worth a combined THB 1.5 billion to invest in SMEs FUNDS Source:Tech In Asia, Bangkok Post, 5
- 17. PRIVATE & CONFIDENTIAL Consider Other Southeast Asia Countries Key acquirers are from SE Asia and APAC countries Source: Advento 38 26 22 12 11 11 7 7 6 5 3 2 2 0 5 10 15 20 25 30 35 40 Country of Origin of Acquirer, 2013 – 2018 (By Deals Done) 2035 948 577 493 427 356 199 192 176 86 61 40 40 37 34 5 0 500 1000 1500 2000 2500 Country of Origin of Acquirer, 2013 – 2018 (USD Million) Southeast AsiaCountries Other Countries FUNDS
- 18. PRIVATE & CONFIDENTIAL How to attract investors? • Type of investment • Timing of investment • Required return • Goals Objective Standards • Culture • Background • Work ethics • Trustworthiness • Build relationship • Present realistic exit strategy • Invoke trust Subjective Standards Pitch 1 Understand Investors 2 Address Concerns FUNDS
- 19. PRIVATE & CONFIDENTIAL Right Pricing and Positioning MARKET DEMAND UNDERSTANDING YOUR OFFERING SELECTTARGET CUSTOMER GROUP UNDERSTAND OBJECTIVES OF MARKET EXPANSION 1. Features –The facts about the product 2. Advantages –The advantages to the customer 3. Benefits – The value to the customer 1. Premium buyer – Highest quality, most features, priority service 2. Value-added buyer – High quality that meet specific needs 3. Price buyer – Adequate quality, best possible price 1. Gaining market shares fast 2. Maximise profitability 3. Maximise capacity utilisation rate of current facilities and infrastructure
- 20. PRIVATE & CONFIDENTIAL Right Revenue Models MARKET DEMAND REVENUE STREAMS PRICING MECHANISMS PAYMENT MECHANISMS • Normal sales • Subscription • Membership • Advertising • Pay-per-use • Leasing • Fixed list price • Flexible price • Volume dependent • Product feature dependent • Customer characteristics dependent • Value-based • Bargaining • Freemium 1. Timing • Upfront • Installment • After • Subscription 2. Payment methods
- 21. PRIVATE & CONFIDENTIAL Being a Manager inThailand TALENTS 1 2 3 “Sanook” concept (having fun together) • Prefer to work in groups • Expect not to be embarrassed publicly ”Greng jai” concept (giving respect and reluctant to disturb others) • Employee don’t ask, don’t questions and don’t confront Paternalism in Superior and Subordinate Relationship • Expect top-down decisions • Expect manager to care about them personally
- 22. PRIVATE & CONFIDENTIAL Other HR Details to Consider TALENTS 1 2 3 Severance Pay: 30 – 300 days (depending on length of service) Ratio of Foreign Workers vs. Locals: 1 to 4 (except for BOI registered company) Social Security Fund (SSF): 5% with basic salary capped atTH 15,000 Source:Thai Provident Fund Workmen Compensation (WCF): 0.2 – 1% of total payroll (depending on the nature of business and work) National Pension Fund (NPF): 3 – 7% of employee’s salary (depending on length of service) Common Probation Period: Up to 119 days Working Hours: Max. 8 hours a day / 48 hours a week 4 5 6 7
- 23. PRIVATE & CONFIDENTIAL Do you need a new set of strategies?
- 24. PRIVATE & CONFIDENTIAL DefineWays to EnterThailand Local Agents & Distributors (Licensing & Franchising) Export toThailand Representative/ Regional Office Joint Venture Establish Subsidiary Buy ExistingThai Businesses
- 25. PRIVATE & CONFIDENTIAL DefineWays to EnterThailand • Costs depend on agent fees • Most effective way to enter • Agents have existing connections & relationships Local Agents & Distributors (Licensing & Franchising) • Cheap, low cost & low risk • Easy to use (e-commerce platforms available) • Difficult to enter due to culture Export toThailand
- 26. PRIVATE & CONFIDENTIAL DefineWays to EnterThailand • Cannot do business; for administrative purposes • Limited to approved activities Representative/Regional Office • Up to 49% foreign ownership without BOI company or Foreign Business License • Can use existing connections • Higher risk Joint Venture
- 27. PRIVATE & CONFIDENTIAL DefineWays to EnterThailand • Expensive • Requires BOI promotion for 100% foreign ownership • No existing branding & connections Establish Subsidiary • Expensive • Requires BOI promotion for 100% foreign ownership • Can use existing branding & connections Buy ExistingThai Businesses
- 28. PRIVATE & CONFIDENTIAL How areThai consumers different from those in your ‘home market’? WHO? • Who is the decision maker? • Who influences the purchase decision? • Who is the user? • Who is making the purchase? WHAT? • What needs, challenges and frustrations do they have? • What are the various alternatives to your product/service? • What other products / services are needed in order to utilise your offering? WHERE? • Where do they live? • Where will they make the purchase? • Where is the product/service going to be used? HOW? • How does your product/service help them? • How much do they earn? How do they spend their money? • How do they get the information? • How do they communicate? If more than 5 questions give you different answers for the local and ”home market”, review your strategies.
- 29. PRIVATE & CONFIDENTIAL Understanding the Popularity of Social Commerce Source:Thai E-Commerce Association, ElectronicsTransaction Development Agency 40% 35% 25% B2C & C2C E-CommerceTransactionValues in Thailand Social-Commerce E-Marketplace E-Retail 4.3 hours Amount ofTime Spent byThais on Mobile Internet Per day 3.5 hours Amount ofTime Spent byThais on Social Media Per day
- 30. PRIVATE & CONFIDENTIAL Understanding the Popularity of Social Commerce Source: Nation Multimedia,Tencent Top Social Media inThailand Top Chat Platform inThailand Top Chat Platform in China • Messenger launched a card payment feature in August 2017 • In June 2018, Messenger expanded this service to Kbank, a major banking group inThailand • Around 95% ofThailand mobile internet users are Line users • An average 63 minutes of 216 minutes spent on smartphones every day devoted to Line • Chinese accounted for nearly one-third of 2017’s record 35 million arrivals • WeChat Pay has about 800 million active monthly users, mostly Chinese nationals FACEBOOK LINE WECHAT
- 31. PRIVATE & CONFIDENTIAL Are you enteringThailand with a local partner?
- 32. PRIVATE & CONFIDENTIAL GeneralViews onThailand Policies Thailand has been welcoming foreign investment Local laws favour local businesses in many aspects Desire “technology transfer” toThai locals Protects job security forThai locals
- 33. PRIVATE & CONFIDENTIAL Business Structures inThailand Sole Proprietorship Ordinary Partnership Limited Partnership Limited Private Company PublicCompany Limited Branch Office Representative Office
- 34. PRIVATE & CONFIDENTIAL Company Structures for Foreigners 1 2LIMITED PRIVATECOMPANY BOARD OF INVESTMENTCOMPANY • Most popular form of business structure inThailand • Max 49% foreign-owned • Process takes around 7 days • 100% foreign ownership • Get tax and non-tax benefits • Falls within 8 business categories • Meet capital investment requirements (business specific) • Process can take 4 months to a year
- 35. PRIVATE & CONFIDENTIAL Limited Private Company PROS CONS • Limited risk • Promote trust when doing business insideThailand • Easy to set up • Difficult to find partner • Lack of control over business • Complicated dispute resolution • Thai name • Min. 3 promoters (shareholders) • Min 1 director (best to beThai) • PhysicalThai address • Official company stamp • Company objectives • Details of the offices and branches of your business WHATTO PREPARE?
- 36. PRIVATE & CONFIDENTIAL Board of Investment (BOI) Company PROS CONS • Tax benefits • Foreign ownership up to 100% • Easier to apply for visas and work permit • Can own land inThailand • Long and complicated process • Complicated accounting practices • Regular inspections 1. Filling the forms 2. Interviewing 3. Getting approval 4. Getting accepted 5. Registering company 6. Applying for visas and work permits 7. Getting BOI certificate PROCESS
- 37. PRIVATE & CONFIDENTIAL Selecting Business Partners Check their track records Find out their business aims Check their financial stability and achievements Visit your partners office 1 2 3 4
- 38. PRIVATE & CONFIDENTIAL OfficialOpening of BlackStorm (Thailand) Co. Ltd. Drop us an email at hello@blackstormco.asia for more information!
Editor's Notes
- Overview of Thailand Demographics of Thailand Business Landscape of Thailand Critical Questions to Consider Are you ready to scale into Thailand? Do you have the capabilities and capacity? Do you have the talents? Do you have enough funds? Is there a market demand? Do you need a new set of strategies? Define Ways to Enter Thailand How are the local consumers different from those in “home market”? Understanding the Popularity of Social Commerce Are you entering Thailand with a local partner? General Views on Thailand Policies Business Structures in Thailand Company Structures for Foreigners Selecting Business Partners
- Over the last four decades, Thailand has made remarkable progress in social and economic development, moving from a low-income country to an upper-income country in less than a generation. Size of population: 69 million (2019) Size of working-age population: 38.7 million (2019) Median age: 38.3 years Size of middle class population: 35% in 2015 (as compared to 15% in 2002) GDP per capita: $6,126 (2017, 3.7% increase from 2016) vs, Singapore ($54,301 GDP per capita with 2.1% growth from 2016) Unemployment rate: 1%
- Ease of doing business in Thailand index Singapore (2) Thailand (27) Japan (34) Vietnam (68) India (100) Government initiatives that promote foreign investment Thailand 4.0 Eastern Economic Corridor Pros & Cons Thailand 4.0 Thailand 4.0 is an economic model that aims to unlock the country from several economic challenges resulting from past economic development models which place emphasis on agriculture (Thailand 1.0), light industry (Thailand 2.0), and advanced industry (Thailand 3.0). These challenges include “a middle income trap”, “an inequality trap”, and “an imbalanced trap”. 5 Agendas for Thailand 4.0 1. Prepare Thais 4.0 for Thailand 2. Development of technology cluster and future industries 3. Incubate entrepreneurs and develop networks for innovation-driven enterprise 4. Strengthening the internal economy through the mechanisms of 18 provincial clusters and 76 provinces 5. Integrating with ASEAN and connecting Thailand to the global community Eastern Economic Corridor Chachoengsao, Chonburi and Rayong Provinces have been designated for the development of the Eastern Economic Corridor (EEC), a pilot project for the economic development of Thailand’s Eastern Seaboard. Over the past 30 years, these three provinces have been developed to support the fast growing industries. It was the “eras of industrial revolution” The government has launched measures to support and accelerate the economic growth in the EEC, for instance, measures to develop public utilities, transportation systems, logistics, human resources, and investor’s facilitation in the form of One-Stop Service Center.
- Over the last four decades, Thailand has made remarkable progress in social and economic development, moving from a low-income country to an upper-income country in less than a generation.
- http://gallery.mailchimp.com/8c534f3b5ad611c0ff8aeccd5/files/Startup_Genome_Report_Extra_Premature_Scaling_1.56.pdf https://www.entrepreneur.com/article/245603 Common signs of premature scaling: Too much money Too many employees Too many early adopters
- Do you have enough resources for the expansion? Funding + people + distributor channels What organisational changes will be necessary to support the expansion?
- Internal capabilities – ready and to what extent What is needed? Sales office? Training programmes? Resources Does the product, business model works in local – externally ok? Do you a new team in HQ? Can current employees take up the role? Do you need to send anyone there to do the knowledge transfer? Do you have a right candidate? Any changes to the procedures / processes to increase capacity? Manufacturing – export, need new factory or do export?
- Existing legal hurdles: Rights of preferred shares in a private company cannot be altered. As a result, once preferred shares are issued they cannot be convereted A private company is also prohibited from issuing convertible notes or bonds http://www.thecapitaltrend.com/?p=340 Thai Government effort in boosting the startup community: Thai government launched a USD 570 million venture fund for Thai startups, while its Digital Economy Fund allocated USD 285 million for technology startup ventures in 2016 State-owned SME Development Bank launched a THB 1 billion venture fund in 2016 to partner with small operators and startups that need investment capital of around 5 million baht but not more than 30 million baht Government Savings Bank (GSB) has launched two new venture capital funds worth a combined 1.5 billion baht to invest in small and medium-sized enterprises (SMEs). The GSB is financing 80% of the venture capital funds and the Stock Exchange of Thailand (SET) is covering the rest Thailand’s Ministry of Science and Technology designated Bangkok as a start-up hub and will set up three new incubators in Thung Khru and Pathumwan districts to provide support to start-ups focusing on developing science and technology-related solutions.
- Existing legal hurdles: Rights of preferred shares in a private company cannot be altered. As a result, once preferred shares are issued they cannot be convereted A private company is also prohibited from issuing convertible notes or bonds http://www.thecapitaltrend.com/?p=340 Thai Government effort in boosting the startup community: Thai government launched a USD 570 million venture fund for Thai startups, while its Digital Economy Fund allocated USD 285 million for technology startup ventures in 2016 State-owned SME Development Bank launched a THB 1 billion venture fund in 2016 to partner with small operators and startups that need investment capital of around 5 million baht but not more than 30 million baht Government Savings Bank (GSB) has launched two new venture capital funds worth a combined 1.5 billion baht to invest in small and medium-sized enterprises (SMEs). The GSB is financing 80% of the venture capital funds and the Stock Exchange of Thailand (SET) is covering the rest Thailand’s Ministry of Science and Technology designated Bangkok as a start-up hub and will set up three new incubators in Thung Khru and Pathumwan districts to provide support to start-ups focusing on developing science and technology-related solutions.
- Three-tier customer categories (pricing): 1. Premium buyer Highest quality product with the most features, and value priority service (first class) 2. Value-added buyer High quality products and services that meet specific needs (business class) 3. Price buyer Adequate quality at the best possible price (economy or budget) Market expansion objectives: Gaining market shares: Become a small player vs. market leader; immediate vs. testing water Maximise profitability for both company and channel partners Maximise the capacity utilisation rate of current facilities and infrastructure e.g. a factory in neighboring country Both positioning and market expansion objectives affect your market entry strategies and pricing strategies . Pricing strategies: Cost-plus pricing model Market-based pricing model Value-based pricing model
- Revenue streams: Normal sales Subscription Membership Advertising Pay-per-use Leasing Pricing mechanisms Fixed list price Flexible price Volume dependent Product feature dependent Customer characteristics dependent Value-based Bargaining Freemium Payment mechanisms: Timing Payment methods
- “Sanook” concept means having fun together: feedback privately, working in groups, can be extremely hardworking if the work if fun Paternalism in superior and subordinate relationship – expect manager to take care of employees by asking about their families – have to get feedback indirectly. Employees expect authoritarian and autocratic style of leadership (Top-down decisions) “Greng jai” concept means giving respect, deference and a reluctance to disturb others: employees don’t ask, don’t questions and don’t confront – hard to evoke critical thinking https://www.workinasia.net/resources/the-management-style-in-thailand--66.html
- Severance pay: 30 – 300 days (depending on length of service) – may be extended up to 400 days (20 years) if amendment to LPA which was passed by Thai National Assembly on Dec 13, 2018 Ratio of foreign worker vs. locals is 4:1 (except for BOI registered company) Social Security Fund (SSF): Both the employee and employer have to contribute on a monthly basis. The contribution rate is usually 5% with basic salary capped at THB15,000.00. Workmen Compensation (WCF): 0.2% - 1%. Only the employer is required to contribute on an annual basis. The contribution rate is based on the total annual salary paid to employees. The contribution rate will depend on the type of company business. National Pension Fund (proposed): require employers and employees to make matching contributions of 3% of the employee's salary to the fund for the first two years before increasing to 5% during the third to sixth year and 7% for the seventh. Probation period: Thai law does not explicitly mention probationary period in employment relationships. However, it does specify severance pay for employees who have worked for 120 days or more and are terminated without cause. As a result, to avoid paying severance, many employers in Thailand set probation periods of up to 119 days. https://www.bangkokpost.com/business/news/1492362/national-pension-fund-draft-bill-gets-savings-hike-rewrite
- Around 40 per cent of the total B2C and C2C e-commerce transaction values in Thailand in 2017, amounting to about Bt150 billion, came from the social-commerce platform. E-marketplace accounted for 35 per cent and e-retail or branded websites 25 per cent. PricewaterhouseCoopers (PwC) shows that 51 per cent of e-commerce in Thailand happens on social channels. Thais are among the highest users of mobile Internet, averaging 4.3 hours per day. According to the Electronics Transaction Development Agency (ETDA), Thais spend on average 3.5 hours per day on social media; the top three social media platforms are YouTube, Facebook, and Line. Facebook – a discovery platform to find information, learn and connect Messenger launched a card payment feature in August 2017 In June 2018, Messenger expanded this service to KBank Line – number one chat platform in Thailand Six groups of services – games, content, online-to-offline (Line Man), business solutions, payments, other services Around 95% of Thailand mobile internet users are Line users (42 million people) An average 63 minutes of 216 minutes spent on smartphones every day devoted to Line WeChat – upcoming social commerce channel that may impact Thailand As of November 2018, Tencent announced consideration of launching WeChat Pay in Thailand, but there’s no timeline to it Chinese accounted for nearly one-third of 2017’s record 35 million arrivals WeChat Pay has about 800 million active monthly users, mostly Chinese nationals Payment feature is already supported in over 40 countries, including Thailand It appealed well to China, HK and Malaysia https://www.bangkokpost.com/business/news/1582374/tencent-mulls-wechat-pay-roll-out http://www.nationmultimedia.com/detail/Startup_and_IT/30350986
- Around 40 per cent of the total B2C and C2C e-commerce transaction values in Thailand in 2017, amounting to about Bt150 billion, came from the social-commerce platform. E-marketplace accounted for 35 per cent and e-retail or branded websites 25 per cent. PricewaterhouseCoopers (PwC) shows that 51 per cent of e-commerce in Thailand happens on social channels. Thais are among the highest users of mobile Internet, averaging 4.3 hours per day. According to the Electronics Transaction Development Agency (ETDA), Thais spend on average 3.5 hours per day on social media; the top three social media platforms are YouTube, Facebook, and Line. Facebook – a discovery platform to find information, learn and connect Messenger launched a card payment feature in August 2017 In June 2018, Messenger expanded this service to KBank Line – number one chat platform in Thailand Six groups of services – games, content, online-to-offline (Line Man), business solutions, payments, other services Around 95% of Thailand mobile internet users are Line users (42 million people) An average 63 minutes of 216 minutes spent on smartphones every day devoted to Line WeChat – upcoming social commerce channel that may impact Thailand As of November 2018, Tencent announced consideration of launching WeChat Pay in Thailand, but there’s no timeline to it Chinese accounted for nearly one-third of 2017’s record 35 million arrivals WeChat Pay has about 800 million active monthly users, mostly Chinese nationals Payment feature is already supported in over 40 countries, including Thailand It appealed well to China, HK and Malaysia https://www.bangkokpost.com/business/news/1582374/tencent-mulls-wechat-pay-roll-out http://www.nationmultimedia.com/detail/Startup_and_IT/30350986
- Policy concerns (the general public will feel that) Local laws favour local businesses in many aspects such as certain types of business activities are reserved for Thai nationals only Desire “technology transfer” to Thai locals Protects job security for Thai locals http://emerging-markets-research.hktdc.com/business-news/article/Asia/Thailand-Market-Profile/mp/en/1/1X000000/1X003IMW.htm
- Sole Proprietorship Ordinary Partnership Limited Partnership Limited Private Company Public Company Limited Branch Office Representative Office
- https://www.expatden.com/thailand/thailand-board-of-investment/#Promotion_Advantages Which structure depends on these two questions: Are you fine with owning less than 50% of the company? Do you need to set up the company in Thailand within a certain period of time?
- Pros Limited risk Promote trust when doing business inside Thailand Easy to set up Cons Difficult to find partner Lack of control over business Complicated dispute resolution What to prepare? Thai name Min. 3 promoters (shareholders) Min 1 director (best to be Thai) Physical Thai address Official company stamp Company objectives Details of the offices and branches of your business
- Pros Tax Benefits Corporate Dividend Import Foreign ownership up to 100% Easier to apply for visas and work permits (You and your staff can get visas and work permits without having to go to the immigration centre at Chaengwattana) Free to apply Can own land in Thailand Cons Long & complicated process (BOI only apply to certain areas of business within your company, not your entire company, thus need to separate some items. BOI also asks for financial reports every three months, six months, one year, and two years, depending on your promotion duration) Complicated accounting practices Regular inspections (Revenue department wants to make sure you use tax incentives only in the areas of business that are related to your BOI promotion) Process Filling the forms (refer below) Interviewing Getting approval Getting accepted Registering company Applying for visas and work permits Getting BOI certificate Filling out the form. The BOI wants to know the following information: the total amount of registered capital and a plan on how you’re going to use the investment in your business details about your project, such as the type of software or machinery you’re going to use and the processes involved the number of Thai and foreign employees you plan to employ and their yearly salaries; in some instances, the BOI provides a minimum salary for key personnel per year a training plan for Thai employees, specifying training courses and/or a plan for technology transfer details of the management team, including their skills and qualifications the estimated revenue and expenses of your business for the first three years of operation