Thailand

Ease of Doing Business Rank: 21

Overview

Geographic location

Thailand is a Southeast Asian country. It is bordered by the Andaman Sea to the west, the Gulf of Thailand to the south, Myanmar to the north, and Laos and Vietnam and Cambodia to the east.

Spoken language

Nearly 94 percent of the people speak Tai-Kadai languages. Thai and various dialects are the national and official languages.

According to the 2011 Royal Thai Governments report, these include Central Thai (20.0 million), Lao (15.2 million), Kham Muang (6.0 million), Pak Tai (4.5 million), Northern Khmer (1.4 million), Yawi (1.4 million), Ngaw (0.5 million), Phu Thai (0.5 million), Karen (0.4 million) and Kuy (0.4 million).

English is taught in schools and colleges and is used in academia, commerce, government, and tourism.

Population

The 2019 population estimate is 69.65 million.

Almost a tenth of the population lives in Bangkok (5.78 million). The remainder lives in many small cities, towns, and townships with populations less than 300,000 dotted throughout the country.

Popular industries

The top industries in Thailand are automotive and electronic manufacturing, services including finance, health, tourism and hospitality, retail, communications, and banking and agricultural processing.

Education

The Times Higher Education World Rankings lists 5 Thai universities in their top 1,000.

The Legatum Prosperity Index ranks Thailand’s education system 70th out of 149.

Popular entity types

The most common type of business entities in Thailand are sole proprietorship, joint venture, partnership, limited liability company and corporation.

The most popular form of business entity among foreign investors is the private limited liability company.

Thai incentives for business

Foreign businesses are strictly regulated by the government. Thai limited companies restrict foreign business ownership to a maximum of 49%.

However, companies can obtain 100% ownership in three ways: Foreign Business License, participating in a Board of Investment (BOI) promotion or registering through the Treaty of Amity if you are a US citizen.

Foreigners are generally restricted to four sectors if they operate under a Foreign Business License. These are manufacturing, trading, export and services. Goods only sold to the export market are not restricted under the Foreign Business Act.

The BOI primarily focuses on industries such as agriculture and agricultural products, mineral, ceramics and base metals, light industry, metal products, machinery and transport equipment, electronics and electrical appliances, chemicals, paper and plastics and services and public utilities.

Qualifying companies may enjoy a number of benefits including tax holidays, reliefs or reductions of import taxes, deductions for transportation, electricity and water costs and a simpler work permit process for foreign employees. Companies may also own industrial land.

The Thai-US Treaty of Amity and Economic Relations grants American companies full ownership of a company in Thailand making them exempt from most restrictions under the Foreign Business Act.

Another Thai agency, the Industrial Estate Authority of Thailand (IEAT) develops policies regarding land allocation to business sectors. They also provide access to well-equipped industrial parks.

Both BOI and IEAT work with business owners regarding work permits, moving currency through the Thai system, and obtaining import duty exemptions on machinery and equipment.

History & Features

Main cities for business

Thailand has several major business centers including Bangkok, Chiang Mai, Hatyai, and Pattaya.
The capital, Bangkok, is the economic center of Thailand.

Popular historical & tourist attractions

Thailand includes sprawling cities such as Bangkok and Chiang Mai, and untouched natural landscapes and architecture. The country has 5 UNESCO World Heritage sites, including the most important prehistoric settlement in South-East Asia, the Ban Chiang archaeological site.

The Dong Phayayen-Khao Yai Forest Complex is home to more than 112 mammal, 392 bird, and 200 reptile and amphibian species. Many are threatened or endangered and the area is of global conservation importance.

Bangkok’s spectacular Grand Palace is a fine example of early Thai architecture. It was built in 1782 and was the administrative seat of government and home to the Royal court and king for 150 years.

Wat Phra Kaew or the Temple of the Emerald Buddha is the most important Buddhist temple in Thailand in the center of Bangkok. It enshrines a highly-revered Buddha image meticulously carved from a single block of jade.

Visit the colorful floating markets in Bangkok’s waterways for fresh tropical fruit and vegetables and meals cooked onboard.

Phang Nga Bay, seen in James Bond movies, features vertical, sheer limestone cliffs and emerald green water. The Simian Islands offers crystal clear waters in a Marine National Park teeming with tropical fish and laden with colorful coral. The Phi Phi Islands feature miles of sandy beaches and a vibrant nightlife.

The Theravada Buddhist temple of Wat Phra That Doi Suthep in Chiang Mai is a sacred site that offers impressive views of the downtown area from its 1,073 meter elevation.

The temple and palace ruins in Ayutthaya demonstrate Siam’s glorious achievements and its tumultuous history. This prosperous trade and political capital was plundered and burned by Burma and left in ruins.

History

Tai peoples migrated from southwestern China to mainland Southeast Asia from the 11th century. The area’s rival states vied for control of the region. Several small states in the Mekong River valley united to form a fleeting Thai kingdom in the 13th century, only to decline in the late 14th century.

Eventually, Thai peoples established their own states in the early 20th century, with the Ayutthaya kingdom dominating the area. The kingdom was initially friendly towards foreign traders and allowed them to set up villages outside the capital city.

The Portuguese reached Siam in 1511, followed by the Dutch in 1605, the English in 1612 and the French in 1662. Ayutthaya City became one of the biggest and wealthiest in the East.

In 1675, a Greek became a Thai court official and he permitted the French to station soldiers in Siam. In 1688, the Thais expelled him and the French troops. Afterwards, Siam cut ties with Europe and adopted an isolationist policy. They agreed to keep Siam a neutral territory between the growing powers of France and Britain.

In 1765, Burma invaded Ayutthaya territory and captured and destroyed the capital in 1767. However, by 1769 it was liberated under the leadership of a general. He became king, established a new capital at Thonburi and conquered much of Laos and other parts of Southeast Asia.

However, his reign was short-lived. By 1782, another general replaced him as king and made Bangkok the capital. His two sons followed as rulers and Thai culture flourished.

When leadership passed to the third in line, the new king allowed the British to live in Siam, established free trade and treaties with many countries, and encouraged study in Western sciences.

Modernization continued under the next king’s rule. He abolished slavery and reformed Siam’s government and taxation laws.

Siam avoided colonization by Europeans until 1893, when they were forced to cede Laos to France. In 1907 they also ceded Cambodia to France and finally Malaya to Britain in 1909.

During World War I, Siam sided with the Allies. In 1932, the Siamese Revolution ended the absolute monarchy of the Ayutthaya Kingdom and established a constitutional monarchy. The country’s name changed to Thailand in 1939.
During World War II, Thailand opted to ally with Japan to avoid becoming a victim in its path. They permitted the Japanese to pass troops through the region to invade British Malaya. However, the Japanese occupied Thailand and officially declared war on Britain and the USA in 1942.

Thai guerillas resisted and fought the Japanese. In 1945, the name reverted back to Siam and by 1946 the country signed peace treaties with Britain and France.

However, unrest led to the king’s assassination and a military coup. The country’s name reverted to Thailand again and the country remained under a military dictatorship until 1963.

In 1973, social unrest led to a civilian coalition government with little violence. Further student demonstrations for reforms in 1976 were met with force and the army installed a new government.

From 1980, a Thai general led more liberally. However, when he stepped down in 1988 it eventually led to another army coup in 1991. Thais took to the streets in 1992 and Thailand returned to civilian government.

In the late 20th century Thailand underwent amazing economic and industrial growth. By 1997 Thailand had a new constitution, but another military coup occurred in 2006. The country returned to democratic elections in 2007.
Thailand continues to grow economically, despite the 2009 recession and the 2011 flooding and tsunamis. They have the 8th largest economy in Asia and a stable democratic government.

Other relevant facts

According to the 2015 census, the overwhelming majority of Thai are Buddhists (94.50%), followed by Islamic (4.29%), Christian (1.17%), Hindu (0.03%) and others (0.01%).

Thailand officially recognizes 62 ethnic communities, of which Central Thai and Khorat Thai make up 34.1 percent of the population.

Additional Information for Business

According to Forbes’ 2019 Best Countries for Business, Thailand is the 47th best country in the world for conducting business.

The 2019 Index of Economic Freedom rates Thailand 43rd globally and states, “The level of trade freedom is relatively high, but nontariff barriers still undercut gains from trade. The judicial system remains vulnerable to political interference, and pervasive corruption undermines government integrity.”

World Bank’s “Doing Business” rankings rate Thailand 27th for ease of doing business in the world.Thailand Country Profile

 

Thailand Entity Support Services by Blueback Global

Blueback Global provides a one-stop integrated solution to managing all aspects of your global operations. We can take the burden off you or your company’s internal resources by managing Entity Setup, Local Payroll, Accounting, Tax Reporting, HR Admin and Regulatory Compliance matters associated with operating in a foreign country. Our services are designed to be flexible and customized, so whether you are starting from entity registration, or have already registered but need support in setting payroll or hire employees, we can help at every point of the process.

The common scenarios that may give rise to the need for Blueback Global’s services include the following:

With our integrated approach, you can expect the following experience:

We have an initial complimentary meeting to discuss the scope, objectives and plans for your expansion plan into Thailand. After this meeting, you can expect a follow-up proposal from Blueback Global within 1 to 3 business days, that outlines that the approach, scope of work and expected deliverables and outcome. Thereafter, our implementation team will then work closely with your team to register the local entity, set up payroll, accounting process, employee social security and benefits. We will then develop a mutually agreed timeline and approach for ongoing payroll, accounting, tax reporting and HR support. Blueback Global will set up a compliance calendar so that you know exactly what and when compliance items such as tax reporting and payroll returns are due. We will of course facilitate all of these, so you do not have to keep track of the compliance dates.

Our goal is to make the process as smooth, simple and successful as possible, and remove the anxiety of operating in a foreign location, to deliver a great customer experience.

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