Based on the most recent World Bank yearly evaluations, Thailand is placed in the 21st position out of 190 economies in terms of how easy it is to engage in business operations there.
However, have you ever considered what makes conducting business in Thailand simple?
Have you ever observed the various reasons for setting up a business in Thailand that will influence you into choosing this country as a location for your business?
Thailand, which is a nation in Asia, has proven to be a prime destination for businesspeople looking to get into the region’s markets. As an Association of Southeast Asian Nations (ASEAN) member, Thailand has signed a number of free trade agreements that have made it simpler for entrepreneurs to access the markets of other ASEAN nations.
Thailand also benefits from lower duties and taxes when exporting products to other ASEAN members due to its ASEAN membership which is one of the advantages of registering a company in Thailand.
Discover the factors that make Thailand a desirable place for your business by reading the article.
Top reasons for setting up a business in Thailand
Here are the numerous reasons for setting up a business in Thailand:
1. Gateway To Asia
- One of the main reasons for setting up a business in Thailand is that the nation’s advantageous geographical position serves as an entryway to several Asian nations.
- Thailand is situated between India & China and has extensive trading ties with both nations.
- Thailand also holds membership in the ASEAN.
- Thailand has additionally ratified the ASEAN Free Trade Area (AFTA) agreement with the remaining nations in order to promote domestic manufacturing and commerce among ASEAN jurisdictions as well as strengthen economic ties amongst global and regional partners. This is one of the benefits of registering a business in Thailand.
- Thailand additionally enjoys accessibility to the Greater Mekong Sub-region, which encourages urban growth, tourism, transportation, and agriculture in an effort to improve economic ties amongst the member nations.
- This is another one of the advantages of registering a company in Thailand as businesses established have a strong chance of accessing marketplaces throughout Asia and conducting free commerce with nations that have signed free trade agreements with Thailand.
2. Diverse Market
- The diverse market that Thailand offers is another one of the primary reasons for setting up a business in Thailand.
- Thailand’s manufacturing industry is large and vibrant, offering a diverse range of products and services. This indicates that there are options to access a variety of areas and that your company’s operation is not constrained to just specific sectors which is one of the benefits of registering a business in Thailand.
- Thailand holds a strong reputation for its fast-moving consumer goods (FMCG), which has helped the country rise to prominence in Southeast Asia’s trade and business.
3. English-speaking Workforce
- English is one of the most widely-used languages in Thailand.
- Business courses are typically offered in English at Thailand’s top institutions.
- This makes it simple to hire highly qualified and capable Thai professionals which is one of the reasons for setting up a business in Thailand.
4. Incentives For International Investment
- Thailand’s transparent corporate investment regulations put a strong emphasis on liberalization and promote free commerce both within the country and with other nations.
- Thailand remains one of the most popular destinations for luring foreign direct investment (FDI) which is one of the advantages of registering a company in Thailand.
- Thailand offers a desirable atmosphere for foreign entrepreneurs that wants to engage in commercial operations in the nation.
- The Thailand Board of Investment (BOI) is a government organization that encourages commercial ventures and initiatives in sectors that are advantageous for Thailand’s economic future.
- Corporations that want to obtain 100% foreign ownership of their business and obtain tax breaks for certain operations are eligible for BOI promotion.
The following commercial operations are eligible for BOI tax incentives:
- Electrical products and the electronic industries
- Invention and advancement in technology
- Agricultural practices and commodities
- Items made of metal, machinery, as well as transportation technology
5. Growing Economy
- The growing economy of Thailand is another one of the reasons for setting up a business in Thailand.
- Thailand has been classified as one of the business-friendly nations, coming in at number 21 on the ease of doing business index.
- Thailand’s economy is distinguished by steady expansion, robust exports, and a booming domestic consumer market.
- Rich natural resources and a talented and affordable workforce all contribute to Thailand’s ability to draw in international investors and provide them with the conditions necessary for their success which is another one of the benefits of registering a business in Thailand.
6. Tax Advantages
- Another one of the primary reasons for setting up a business in Thailand is the nation’s favorable tax advantages.
- The Board of Investments (BOI) provides investors with a wide variety of tax benefits, assistance programs, and exclusions or discounts on import duties for operations that assist in the growth of the country which is one of the benefits of registering a business in Thailand.
- International investors who hire extremely qualified employees in the science, technology, engineering, and mathematics (STEM) fields are qualified for corporate income tax reductions of 200% for training costs associated with endeavors approved by the Ministry of Higher Education, Science, Research, and Innovation.
7. Free Trade Agreements
- Another one of the advantages of registering a company in Thailand is the numerous free trade agreements in the nation.
- Thailand has signed 14 Free Trade Agreements with 18 nations, including the ASEAN Free Trade Area, China, India, and numerous other nations.
- One of the benefits of registering a business in Thailand is that the free trade agreements in the nation can boost the amount of commerce and investment that takes place between member nations by lowering or removing trade restrictions like tariffs and quotas.
- The FTAs may also give companies access to affordable inputs like machinery and raw materials, which might reduce manufacturing costs and boost competitiveness which is another one of the reasons for setting up a business in Thailand.
8. Special Economic Zones
- Special economic zones (SEZs) are areas that promote the growth of infrastructure, offer incentives for investments, and offer services to foreign employees in order to boost the nation’s economic growth by enticing Small- and Medium-Sized Enterprises (SMEs) to the nation.
- Companies operating in SEZs can benefit from lower taxes, as well as access to the international workforce.
- There are numerous tax and non-tax advantages available to businesses operating in Thailand’s SEZs which is another one of the reasons for setting up a business in Thailand.
The Board of Investment (BOI) of Thailand offers the following incentives to companies operating across a wide range of sectors:
- CIT relief for eight years
- Additional CIT reductions of 50% for 5 years.
- Machine import tariff reductions or waivers.
- A 25% investment cost reduction for installing or building structures employed, starting from the date that earnings are received.
Conclusion
While setting up a business an entrepreneur must take numerous factors into account, such as the business location, government policies, trade agreements, tax benefits, workforce availability, etc. All of these aid entrepreneurs in determining and planning their companies for their future success.
This is where you can choose Thailand as your desirable business location. There are numerous reasons for setting up a business in Thailand, including the country’s membership in ASEAN, the presence of English-speaking citizens, the existence of special economic zones, free trade agreements, and government regulations.
If you want to set up your business in Thailand or have any related questions, speak with our professionals at ODINT Consulting. Our professionals will be glad to assist you with any queries you may have.
FAQ’s
There are several reasons for setting up a business in Thailand including the country’s membership in ASEAN, the presence of English-speaking inhabitants, the existence of special economic zones, free trade agreements, tax advantages, and government regulations.
Thailand has ratified 14 FTAs with 18 different 18 nations.
Employing English-speaking personnel is advantageous for Thai businesses because it speeds up the hiring process for highly skilled and competent Thai individuals. Additionally, having an English-speaking workforce facilitates communication with clients.
Free trade agreements in the country can increase the amount of trade and investment that occurs between member countries by reducing or eliminating trade barriers like tariffs and quotas. The FTAs might also provide businesses with access to low-cost inputs like equipment and raw materials, which could lower production costs and increase competitiveness.
Enterprises operating in Thailand’s SEZs can benefit from a variety of tax and non-tax benefits.
