by Svitlana Lazyuk , September 23, 2015
The wide range of benefits that Thailand offers to foreign investors apart from its beautiful travel destinations makes it a very desirable jurisdiction.
Here are the top 5 reasons to expand your business to Thailand:
- Thailand is a cost-competitive location (6.6), in comparison to other Asian destinations, that offers a high quality lifestyle for expats. Thailand has a healthy microeconomic environment and a very welcoming culture;
- Thailand is a great place to invest in the construction industry. It is ranked as 6th in the world by the World Bank group. The cities of Thailand are developing and housing situation is improving rapidly. In addition, the administrative and legal side of business is fairly easy and straight forward;
- According to the World Bank group, starting a business in Thailand is significantly easier in terms of procedures required, duration and cost compared to China, India and Vietnam. The lower startup barriers in Thailand allow entrepreneurs and businesses to effectively proceed with the incorporation and start the business activity. For instance, it takes only 2 procedures and less than a week and costs 6.6% of the registered business value to register a business property;
- Corporate income taxes in Thailand are also fairly low ranging from 10% to 30%, based on the amount of profits. For instance regional operating headquarters are taxed at only 10%. In addition the Board of Investment offers numerous investment incentives that substantially reduce and/or eliminate tax liabilities, depending on a variety of circumstances;
- It is possible to form a wholly foreign owned Thai entity. For American nationals it is especially easy due to the US-Thailand Amity treaty. It is recommended to use a USA citizen as a shareholder and director of the Thai company.
However, when choosing to invest in Thailand, you should consider the possible obstacles:
- To form a business in Thailand (if you are not an American citizen) the majority of shareholders must be of Thai nationality, because majority foreign owned companies are restricted from doing business in several sectors;
- Difficulties may arise for the companies with over 50% foreign owned shares. These companies would be required to obtain a foreign business license before carrying out any business activities within industries like tourism, sale of food and beverages, communications, legal services, and construction;
- All documents will have to be translated to Thai as even though English is widely spoken, it is still not an official language;
- The Thai government is quite corrupt and Thailand is ranked as 104th Country in the world for intellectual property protection.