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Advantage of starting a business in Thailand
ADVANTAGE OF STARTING A BUSINESS IN THAILAND
We will discuss some advantage of starting a business in Thailand: Thailand, the land of smiles, offers gazillion advantages when you decide starting a business here. Because of government support and incentives, skilled and cheap labor, strong infrastructure, foreign investors are swarming to Thailand. Well-defined policies that catalyze liberalization and free trade, social and political stability and the country’s strategic location also entice foreigner in doing business in Thailand. Based on the comparative analysis of advantages of doing business in Asia, the cost-effectiveness while investing and a better life that comes along is the key factor behind the desire of the expatriates to do business in Thailand. Gradually it has now turned into one of the most lucrative investment destinations in the world.
Among numerous advantages, the highlighted advantages of doing business in Thailand are the following:
Welcoming and free economy
Thai business community is very warm and welcoming to foreign investment and companies who are ready to establish operations in the country. The infrastructure and systems are built in such way that they are always ready for organizations doing business to get started with and begin operating successfully.
Possibilities in manufacturing sector
Thailand’s large and active manufacturing sector produces a diverse array of goods including toys, fish products, rubber, furniture and jewelry. The largest manufacturer of automobiles, hard disk drive and rubber today is Thailand. No wonder, it has become a regional leader in trade and commerce. This place is ideal for starting a manufacturing a business because:
- A Thai LLC can be foreign owned.
- Due to vat exemption on all exports, low rental cost for industrial space, exemption of custom duties on all exports, manufactured goods can be sold abroad at a higher markup.
- Thailand’s transportation network is considered the 3rd best in South-East Asia. So it’s easy to transport manufactured goods.
- While importing materials which are used to produce exported materials later, the customs department will refund import duties on such goods.
- Exporters may obtain financial assistance from commercial banks in form of packing credits by means of promissory notes discounted at the rate prescribed by commercial bank.
Less hassle in setting up regional head office
Many regional head offices are being set up by foreigners in Thailand because:
- A Thai head office enjoys a mere 10% corporation tax on income received from subsidiaries including royalties, interests, and intellectual property and management fees. No Thai corporation tax is charged against dividends received from international subsidiaries
- Regional head office is permitted to own Thai land.
- It is free of any currency controls and overseas remittance restrictions.
- Can employ unlimited emigrant talent.
Dynamic government policies
As advantage of starting a business in Thailand, The Thai government is a progressive and pioneering body, which actively encourages almost everything related to development and socio-economic advancement. Foreign investment, both financial and in the local workforce, is strongly encouraged by the Thai authorities and the government’s policies over the last decade have made for a more inviting environment for foreign businesses and organizations. The Thai government provides several tax incentives including Board of Investment (BOI) approval. Zero corporation tax is provided to multi-nationals who invest in industry sectors like-
- Agriculture and agro-industry
- Alternative energy
- Electronics and ICT
- Health care
- Tourism services.
In Thailand, business losses can be carried forward up to 5 years. Exports do not suffer VAT, customs or excise duties. Import duty imposed on materials imported for the production of goods that are then exported can be refunded by Customs Department. Furthermore, exemption from custom duties on imported goods is granted when goods are taken through a Free Zone. Businesspersons who incorporate in Thailand’s 12 free trade zones enjoy advantages like- VAT exemption, no import/export duties, up to 8 years of tax holiday for promoted activities and permission to own land.
Available, eligible and cost-efficient workforce
Thailand has a large and adaptable workforce. According to Thailand’s Board of Investment, literacy rates reach 94% for men and 90% for women, so that foreign investors will find an intelligent workforce with the potential for further development. The Thai workforce is not only amenable and educated but also among the most cost-efficient in the region in terms of pay with the average daily wage of approximately US$6.
Ease of application procedures and costs
As Thailand is reported as the 17th easiest place to do business in the entire world, doing a business in the country is a very smart decision. Fewer complications are associated from the bureaucratic procedures to the application costs involved.
Convenient regional transportation
Not only nationally but also in Southeast Asia region Bangkok is considered to be the core for transportation. This improvement in transportation facility will further go higher as more investments are prioritized for the improvement of transportation.
Affordable business cost
This includes offices, factories, production facilities, management systems and IT- all operational cost, which is definitely affordable compared to other countries of the west. The industrial electrical power and cost of water is also reasonable and is good for the business.
Thriving tourism industry
In tourism, Thailand has definitely begun to burgeon in recent years. It has gained huge popularity among a lot of expatriates and tourists. It is favorable for the business owners as they get many potential international customers.
Thailand is a hospitable, friendly and rapidly developing nation in which there is the opportunity to establish long lasting and strong commercial and financial bonds. Thai people being scrupulous and having an earnest desire to succeed leave no stones unturned while it comes to their work. A regional center for trade and manufacturing, with democracy interwoven into the fabric of its society, Thailand has become a very attractive location for doing business.
However, you may consider a cultural awareness-training course such as Communicaid’s Doing Business in Thailand program if you want your business to run smoothly. Having completed one of these intercultural training courses, your organization and its employees will be able to form strong strategies to help overcome any cultural pitfalls or challenges when doing business in Thailand.