Looking to launch your startup in Thailand? Thailand is globally acknowledged for its rich culture, exquisite cuisine and natural beauty. But you might not be aware that Thailand is also a popular business destination for both Thai as well as foreign businesses to launch their startups. The GDP (Gross Domestic Product in Thailand was US $501.79 Bn last year in 2020, and is expected to reach 546.00 USD Billion by the end of 2021 as per World Bank.
Thailand GDP Over the Years
Thailand has a comparatively low cost of living, together with high-speed internet access practically everywhere, stable power, and low cost of food, housing, medical care, as well as transportation costs. Thailand is well ahead of the curve in enticing talent from the world over. Obviously, these factors aren’t exclusive to Thailand. However, what sets the country apart and makes it attractive for foreign investors is its strategic location and government support, plus all the benefits it provides to businesses in the country. Let’s have a look at some of the key reasons why Thailand is becoming such a popular business destination for startups.
Key Benefits of Launching your Own Startup in Thailand
●Strategic Location – Thailand is located between China and India. Many foreign investors find that Thailand’s location is ideal to penetrate the thriving Asian Market. Its strategic location attracts many foreigners to establish a business in Thailand and to access the Asian markets. Not only is it suitable to trade with these two neighboring nations, but Thailand is also a member of ASEAN (Association of Southeast Asian Nations). Investors engaging in Thailand would have accessible trade routes with Singapore, Vietnam, the Philippines, Malaysia, Laos, Brunei, Myanmar and Cambodia.
●Government Incentives – The government of Thailand is quite supportive of companies setting up business in Thailand, including businesses owned by foreigners. The government offers several business opportunities in Thailand for attracting more FDI (foreign direct investment). The government of Thailand has made the registration process for the companies pretty straightforward. Hence, foreign investors could easily do business in Thailand without any problems and also the company formation in Thailand is also streamlined. The government also took initiatives to enhance the business landscape in Thailand.
●Low-Cost Labour – Thailand has a population of 70 million (as of 2021), which means there’s more workforce accessible to a company in Thailand. The literacy rate in Thailand is around 94%, which implies that Thailand offers an educated labor force. The Thai workforce is comparatively cost-effective with respect to their daily wages. In Thailand, the average daily wages range from $6 to $8.
Ease of Doing Business in Thailand Over the Decade
●Ease of Doing Business – As per the World Bank’s annual rating, the country is currently ranked 21st among 190 among other economies. This rank is apparent enough that it’s easy to start a business in Thailand. The ease of doing business in Thailand improved a lot from 26 in the last decade to 21, which infers is a positive signal for investors both domestic and overseas.
●Promising Tourism Industry – It’s a well-known fact that Thailand is among the best tourist destinations and also one of the most visited nations in the world. This is very beneficial for businesses that are dependent on a foreign clientele. Businesses such as restaurants and hotels get the most out of the tourism industry.
●Diversified Industries – Thailand has a vast and dynamic manufacturing sector that produces an assortment of goods from toys, jewelry and furniture to rubber and fish products to name a few. This sturdiness in the manufacturing and FMCG sector has enabled the country to lead the trade and commerce within the region.
Thai Government’s 2021 Incentives
Foreign investors, professionals as well as retirees would be able to relish new incentives in Thailand, as the Thai government looks to interest high-earning foreign residents in helping Thailand’s COVID-19 recovery. On September 14, 2021, Thailand’s cabinet through a resolution introduced tax, immigration, and land ownership incentives designed for skilled professionals and foreign investors. These incentives are efforts to stimulate the country’s economy which has been severely impacted by the pandemic. As per a government spokesperson, the Thai government assumes the incentives would attract a horde of foreign investors as well as professionals in the coming five years, that would contribute over US $30 Bn to Thailand market economy.
These incentives are of three categories:
Immigration – Qualified applicants could receive a long-term resident visa for 10 years to live in the country, including spouses and children. Automatic work permits would also be issued to qualified applicants. This is one of a kind visa that didn’t exist previously in Thailand.
As opposed to other Thailand visas, those on this visa won’t have to provide written notices to the respective authorities for a stay exceeding 90 days in Thailand.
Tax – The qualified applicants would be able to enjoy income tax rates the same as available to the Thai citizens, and tax exemptions for the income earned overseas. Moreover, the qualified applicants will be able to apply for a 17% fixed income tax rate in line with the Eastern Economic Corridor scheme.
Land and property – These qualified applicants would be able to enjoy eased out restrictions on foreign ownership as well rent of property and land.
These incentives would be supervised by the county’s Office of National Economic and Social Development Council (NESDC). They would be there from 2022-2026 for five fiscal years, at which their performance will be evaluated and a further decision on whether to further extend them.
Finding the Productive Environment for your Startup in Thailand
Although you might be lured by the benefits that Thailand has to offer, you still might need some hand-holding opening a business in Thailand once you have arrived in the country. Even with a lot of streamlining of the process, still, a lot of operational details needs to be taken care of before starting a business in Thailand.
As a foreigner, you may not be conversant with the company requisition process. Therefore, for easing the registration process, it’s better to contact a startup consulting in Thailand. Business startup consulting firms in Thailand can work with you in reviewing your business model and assist you in identifying strategic initiatives that would support your business objectives. A Thailand representative through facilitated sessions would develop the right strategy for your business development in Asia. Also, these Asian business consultants would help you in executing, monitoring and making ongoing adjustments to your business strategy.
Developing a robust business plan is crucial for a successful startup. Consulting firms in Thailand work with you in building robust plans which involves detailed strategies such as finance, marketing, operations, sales, supply chain, engineering and procurement.
Along with the rapid growth Thailand is relishing, it also reaps the benefits of being a friendly, competent, hospitable culture immersed in history. Challenges are there everywhere in the world. Add start-up to that equation and the rate of failure is intimidating. But individuals don’t get into start-ups to be unsuccessful or repeat their past, they work to see that their ideas or concepts come to life. Thailand has made all the efforts to improve the country’s economy and promote foreign relations and technological advancement. It’s no surprise that Thailand is today among the popular business destinations for foreign investors. The foundation of the dreams starts here in Thailand and it’s exhilarating to imagine what boundless harvests lay ahead in Thailand’s evolving economic future.
Interesting Reads :
Overview of Thailand’s Startup Ecosystem
Critical Success Factors for Startups in Thailand
The Importance of Consulting a Startup Specialist
Why 90% of Startups Fail and How to Avoid It
Opportunities for Startups in Thailand