Have you been dreaming of moving abroad and opening your own coffee shop business? Then Thailand may be the place for you. Its multiple urban areas have a rapidly growing cafe culture enjoyed by both locals and tourists alike. This article will serve as your starting point for opening a foreign-owned Thailand coffee shop.
Setting up a local legal entity for a Thailand coffee shop
Company registration for small foreign-owned businesses in Thailand
The first step you will need to undertake before opening a cafe business in Thailand is setting up a company. The most common type of legal entity for foreign-owned coffee shops is a Thai limited company. There are, however, a few factors to consider when starting this type of company:
- at least 3 shareholders and foreign ownership is limited to 49% (it is common practice to give majority voting rights to ordinary shares, thus allowing foreign shareholders to maintain control)
- a minimum of 2 million THB in paid-up capital (which is equivalent to approximately USD 54,500.00)
- to acquire a commercial address to set up your business
- Trademark registration helps protect your brand and logo
Emerhub helps you set up a company in Thailand and will advise you on the best way to separate regular and preferential shares to ensure that you retain control of your business endeavor. We can also help you find the right location to set up your coffee shop business in Thailand.
What licenses do you need to operate a coffee shop in Thailand?
To ensure that your operations comply with local regulations, it is important that you secure the necessary licenses for your specific business model. The required business licenses can vary depending on what you serve in your cafe:
- Food and Beverage license: Allows you to sell food and beverages in small-scale establishments (bars, pubs, cafes)
- Food and Restaurant license: Required for preparing food to be sold and consumed by customers (requires trademark, Health inspection, specific employee training)
- Alcohol license: Allows you to serve alcohol on your premises and offer alcoholic drink options. Requires strict adherence to government regulations.
- Health & Safety license: Ensures that your coffee shop complies with local regulations in terms of safety training, equipment maintenance, food preparation standards, etc.
- Music license: Required if you want to display live music performances in your coffee shop
- Signage license: Required for putting up signage in public areas for advertising your commercial space.
How to secure products for your business in Thailand?
Understanding product registration in Thailand
In Thailand, Food and Beverage products are regulated by the country's Food and Drug Administration (FDA). Therefore, if you plan on importing or selling your coffee beans, brews, or related products, you will have to register your products first. Below is an overview of what details you will need to provide to the FDA for registering your coffee-related products:
- Product details (name, ingredients, composition, shelf life)
- Labeling in Thai language
- Manufacturer Details
- Manufacturing facility information
- Free Sale Certificate (FSC) for imported products
- Factory registration (if applicable)
- Laboratory analysis reports
Emerhub can help you review your application to ensure your products comply with Thai law. We can also manage the application for you. Remember that if you intend to add new ranges of products down the line, you will need to restart the process. For more information, take a look at our related guide to FDA registration in Thailand for foreign-owned companies.
Importing foreign products into the Thai market
If you plan on importing coffee beans and other food items from abroad to supply your coffee shop business in Thailand, you will need to obtain a Free Sale Certificate (FSC) followed by an Import License. The FSC confirms that an imported product meets quality and safety standards, and is sold legally in the country of origin.
The overall process of securing an import license can be time-consuming, as your application will be reviewed by the relevant authorities in Thailand. For food and beverage products this will also require FDA approval. Emerhub can help you with the process and will identify potential Free Trade Agreements that could benefit your business depending on your country of origin.
Alternatively, you could consider partnering with Emerhub’s Importer of Record service to bypass the need to register for an import license and start importing your goods immediately. We already hold the necessary licenses and logistical network and will act as your consignee throughout the process, allowing you to focus your efforts on your local coffee shop business.
Regulations to know for hiring employees for your coffee shop business
Hiring Thai nationals for a foreign-owned business
As mentioned previously, foreign-owned businesses in Thailand are required to hire Thai nationals to ensure compliance with local regulations. It is possible to also hire foreign employees, however, you must abide by the country’s foreign hire ratio. This means that for every foreigner employed, you must hire four Thai nationals.
Keep in mind that hiring local workers implies that you will need to comply with Thai regulations in terms of employee payroll and labor protection. Emerhub’s team of local experts can help you navigate the HR and payroll process for some of the key factors of hiring in Thailand:
- Signing employees up for Social Security and Healthcare contributions
- Calculating withholding tax and statutory deductions
- Ensuring compliance with regulations for employee leave, working hours, and other benefits.
- Staying up to date with employment wage regulations
Visas for foreign workers seeking to work in a Thailand coffee shop
If you intend on hiring foreigners to work in your cafe business in Thailand, then they must first obtain a work permit or Visa. If you are hiring them for a short employment opportunity, then you can sponsor them through the Non-Immigrant Business Visa. This offers the possibility of 90-day or 1-year stays for foreign nationals intending to work in Thailand.
Emerhub can assist you in determining which Visa is most suitable for hiring foreign employees for your business in Thailand, as well as in ensuring that you meet the application criteria. We can also provide guidance for other relocation-related matters for settling in Thailand on a more permanent basis.
If you are interested in opening a Thailand coffee shop business, contact one of our advisors via the form below with a brief overview of your plans to get the process started!