Business challenges – Incorporating a retail business in Thailand
InsightsThought leadership seriesBusiness challenges – Why outsourcing matters?
Incorporating a retail business in Thailand
As one of the leading economies in Southeast Asia, Thailand continues to be a major investment destination for many of the world's leading retail corporations wanting to establish physical retail stores in the Kingdom. But as large retailers from Britain, France, Japan and elsewhere will attest, it takes more than a good product to stay the course in the 'Land of Smiles'.
There are myriad of financial and strategic reasons why companies decide to shutter their business but perhaps one of the biggest stumbling blocks is that outright foreign business ownership in Thailand is complicated. The Foreign Business Act (FBA) requires that international investors apply for a foreign business license if a non-Thai national owns the majority stake of a company registered in Thailand.
Furthermore, Thailand's Foreign Business Act has identified three lists in which foreign participation may be prohibited or restricted. Industries which must be majority-owned by Thais include land trading, mining, newspaper publishing, radio and television stations, restaurants, rice farming, wholesaling, and retailing.
The definition of “foreign company” under Thai law is a company registered under the following laws must be deemed a foreign company:
1. The laws of another country (including all branches, representative offices, and regional offices of companies abroad operating in Thailand);
2. Thai law, but where 50% or more of its shares are held by foreign individuals or business entities. The Foreign Business Act has identified three lists of activities in which foreign participation may be prohibited or restricted.
The operation of retail and wholesale business falls under List 3 of the Foreign Business Act Restrictions, which states “Businesses in respect of which Thai nationals are not yet ready to compete with foreigners.” To limit the domination of multinationals in the local marketplace, the FBA requires a minimum investment of 100 million Baht (to conduct a retail or wholesale business), which allows for up to five retail stores or one wholesale store. For companies wanting to conduct both retail and wholesale businesses, a minimum of investment of 200 million Baht is required.
Whereas these laws may seem restrictive at the outset, the same rules do not apply for Thai nationals. As a consequence, Thai nationals and foreign investors often co-exist where Thai shareholders hold 51% or more of the shares. This alternate route to establishing a business means the operation is not subject to the Foreign Business Act.
Mazars in Thailand offers international businesses of all sizes a global integrated partnership that is localized by more than 350 professionals spanning eight nationalities and more than half a dozen languages. So, whatever you need to achieve business-wise, we have the personnel to show you the way.
Want to know more?
David Louey Outsourcing Director Bangkok
Business challenges – Ensuring HR Compliance
Today’s challenge for small business owners and mid-sized companies is making sure that every employee contributes to the ongoing success of the company. In many instances, this includes either the business owner or another senior member of staff taking on at least two roles, such as a secondary function as HR manager or accountant. While this ancillary position may only need to be filled for a few...
Business challenges – HR Support Services
The past two years have really shaken up the corporate landscape and how employers and employees are looking at their roles within the organization. For many companies, remote working or working from home (WFH) has become the order of the day and companies such as Zoom and CrowdStrike have benefitted enormously as they tailored their platforms to meet surging requirements.
Business challenges– Corporate payroll outsourcing
Once you’ve made the decision to go down the payroll outsourcing route, you can rest assured that tackling your monthly payroll management task is taken completely out of your hands. This means calculating how much staff are due to be paid (both local and expatriate), including complex statutory payments, commissions, travel expenditure, overtime, Social Security Fund (SSF) contributions as well as...
Business challenges-Balancing payroll requirements
For many of today’s business owners, outsourcing payroll is viewed as an affordable, secure and time-saving option. Whereas the thought of calculating wages, paying employees, filing tax returns, and performing various other account-related duties may give some people a headache, one misplaced decimal point or an incorrect tax filing can lead to a full-on migraine or worse some form of corporate financial...
Business challenges – The new normal
With Covid-19 now fading into the background in most Western countries and coming under control elsewhere around the world, the focus of many business owners, CEOs and CFOs is shifting to how can they transform their finance operations and capabilities. One key area of interest is payroll, where increased flexibility, accuracy, confidentiality, and control by a centralized team with global reach...