Did you know that Thailand has been implementing innovative measures to encourage foreign investments in the startup sector? In this article, we’ll look at the key requirements for setting up a startup in Thailand and some key benefits in place to simplify market entry for foreign startup entrepreneurs.
Overview of Startups in Thailand
A startup business in Thailand typically refers to a new enterprise in its early stages of development that seeks to create innovative and unique products or services. The most common startup businesses in Thailand are within the technology and fintech industries or the health and medical technology industries.
The Thai government actively supports startups in Thailand with various programs and incentives designed by local agencies like:
- National Innovation Agency (NIA): Provides funding, grants, and support to startups while connecting them to potential partners and investors.
- Digital Economy Promotion Agency (DEPA): Offers financial support for early-stage digital startups in Thailand through the D-Startup Project.
- Thai Venture Capital Association (TVCA): Connects startups with venture capitalists and private equity firms.
- Board of Investment (BOI): Offers tax and non-tax incentives for businesses operating within a targeted industry. These include exemptions from import duties, land ownership restrictions, and corporate income tax.
How to Set Up A Startup in Thailand
Requirements for Establishing A Startup in Thailand
The most common business structure for startups in Thailand is a private limited company. This structure provides limited liability protection and a clear legal framework that outlines the responsibilities of stakeholders and directors.
A private limited foreign-owned company in a non-restricted sector requires a minimum capital of THB 2 million. This increases to 3 million per activity for businesses operating within a restricted sector. Restricted sectors refer to industries in Thailand regulated through the Foreign Business Act (FBA) to protect Thai interests.
Foreigners can own up to 49% of a standard company in Thailand. However, in some cases, up to 100% foreign ownership is possible:
- Foreign Business License: If your operations are within one of Thailand’s restricted industries, you must apply for an FBL. In some cases this allows up to 100% ownership, however, your activities are strictly limited to that which is outlined in the issued license.
- Board of Investment (BOI) Promotion: Foreigners can apply for a BOI Promotion if their business aligns with national growth industries, which allows for 100% foreign ownership, tax incentives, the possibility to own land, and more.
- US – Thai Treaty of Amity: This treaty only applies to U.S. citizens, allowing them to maintain majority shares in their Thai-based business while being exempt from the Foreign Business Act.
How to Register A Startup Business in Thailand
The process for setting up a startup is essentially the same as any standard Thai majority company. Emerhub can assist you with registering your business in Thailand through our comprehensive company registration process:
- Register Business Name: Emerhub will reserve your business name with the Department of Business Development (DBD).
- Business Registration: We’ll register your business at the DBD and submit the required documentation. This takes up to 7 working days for approval.
- Obtain Tax ID: Register with the Revenue Department to obtain your Tax ID within 60 days. For companies with an annual turnover exceeding THB 1.8 million, a VAT registration is necessary.
- Additional licensing: Our team will review your planned business activities and manage applications for supplemental business licensing for working in specific industries.
If you are interested in applying for BOI promotion to increase your foreign ownership, gain access to land ownership and exemption from hiring quotas, it is important to note that the process is longer. We recommend applying after your private limited company is incorporated. To learn more about this process, read our related post on everything you need to know about a BOI company in Thailand.
Visa and Work Permits for Working in A Startup in Thailand
Work in Thailand via A Business Visa
The Non-Immigrant B Visa is issued to foreigners who want to enter Thailand for business purposes or to work in Thai-based companies. The business visa can be issued for either 90 days or 1 year, depending on whether you are first coming to Thailand for short-term work or business setup or for longer-term investment activities, such as launching your startup in Thailand.
The business visa also allows you multiple entries, meaning that you can more easily travel to and from Thailand. However, Non-Immigrant B Visa holders will still have to obtain a work permit before conducting business in the country. Emerhub can assist you in preparing the key documents for this business visa through our comprehensive visa application service.
SMART (S) Visa Program for Startup Entrepreneurs
The Smart Visa program is a newly implemented initiative by the Thai government to attract highly skilled foreign entrepreneurs and talent primarily focused on the technology field. The SMART Startup (S) Visa is specifically aims to facilitate entry for entrepreneurs looking to invest in startup companies in Thailand.
Requirements for a SMART (S) Startup Visa are:
- Minimum balance of THB 600,000 in their bank account (amount must have been held for at least 3 months)
- Health insurance coverage valid for duration of stay for applicant and dependents
- An additional balance of THB 180,000 per person must be available in your bank account to bring any dependents
- Applicants must qualify as a startup entrepreneur by holding a minimum of 25% of the startup’s registered capital or be a director of the company
- Have an established startup in Thailand
- The company must be certified as being in the targeted industries by the local governing agencies
Once approved, SMART (S) Visa holders can benefit from the following incentives for running a startup in Thailand:
- Renewable visa for up to 2 years
- Exemption from work permit requirements
- Yearly reporting to immigration offices rather than the usual 90-days
- Exemption from multiple-entry permit requirements
For those looking to work within an existing Thai startup company, applying for a SMART (T) or Business Visa would be a better option. Our consultants at Emerhub can assist you in determining the proper stay permit or visa for your needs.
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