Doing business
Current business situation
Thailand has demonstrated economic resilience despite its history of
political and economic upheaval, with business taking a ‘business as usual’
approach. Thailand’s economy is heavily export dependent, with exports
accounting for more than two-thirds of the country’s Gross Domestic Product
(GDP). It is expected the value of exports from Thailand will reach an all
time high of US$235.1 billion in 2017.
Robust overseas demand for its exports, sizable public investments and
increased tourism are expected to support continued improvement in economic
growth and demand for imports, although business confidence levels and
investment timing may be dented by uncertainty around the timing of a
general election expected to take place around February 2019.
Austrade focuses on opportunities for Australian businesses in the Thai
market, especially those influenced by the following major trends:
- Increasing tourism and consumer affluence leading to greater demand for
premium food, quality goods and services.
- The country’s ongoing position as a regional manufacturing hub
particularly in automotive, electronics and food processing.
-
Transformation of traditional industries through greater use of
technology
-
Greater focus and awareness in sustainability and the environment.
- Growth of Thai businesses in trade and investment into ASEAN and beyond.
- Greater urbanisation leading to demand of more and better infrastructure
and transport projects
-
The Eastern Economic Corridor (EEC) Development Plan under scheme of
Thailand 4.0 (www.eeco.or.th/en)
Australia's trade and economic relationship with Thailand has grown strong
since the
Thailand-Australia Free Trade Agreement (TAFTA)
came into effect
in 2005. TAFTA provides tariff advantages over European and North American
competitors and allows many Australian companies to find new export
opportunities.
Business culture
Relationship building is an essential factor if you are to succeed in doing
business in Thailand. Thais will generally expect to spend time building a
relationship with their business contacts before they will exchange
detailed information or commit to a deal. It is common to begin or wrap up
business meetings with informal conversations. Your Thai counterparts may
ask questions about your home town, family and educational background in order to
build familiarity with you.
In general, Thai business people tend to follow a western, formal dress
code. In business meetings a business shirt, tie and proper footwear is
essential for men. Formal dress codes applies for women also. Casual wear
should not be worn to business meetings.
Khun (pronounced khoon, as in cook) is Thai for Mr, Mrs, Ms or Miss. When
addressing others, Thais use Khun followed by a person's first (given)
name. For example: Khun Somporn, Khun Mallee, or in a Western context Khun
John (rather than Khun Smith). Most Thais also have a nickname, which may
be used in place of their given name.
The exchange of gifts is widely practiced in business dealings in Thailand
and should be reciprocated. Gifts are given to those visited for the first
time and signify friendship and an appreciation of hospitality. Gifts are
opened in privacy, not when received. Gifts do not need to be expensive but
a generosity of spirit will help build a strong relationship with your
partners.
Note: care should be taken when giving gifts that they are relatively
modest and proportionate to the occasion. Expensive gifts may constitute an
offence if given unnecessarily and with the intention to obtain or retain
business or a business advantage.
Australian businesses should familiarise themselves with anti-bribery
legislation. If the person is a Foreign Public Official (FPO) this act may
be an offence under
Australia’s anti-bribery legislation.
Setting up in Market
We strongly suggest that you seek professional legal and accounting advice
prior to establishing a business in Thailand.
In many cases, a foreign entity cannot own more than 49 per cent of the
enterprise, with the majority owned by Thais. However, exceptions for
majority foreign ownership exist for certain types of industries and are
often granted for projects approved by the
Thai Board of Investment
.
The Thai Board of Investment provides more detailed information about
establishing a business in Thailand. Professional service firms also offer
their own guides to setting up and doing business in Thailand.
Banking and Finance
There are 14 Thai commercial banks and 11 foreign banks in Thailand. In
general, only Head Office branches of local banks are able to open bank
accounts for foreign businesses. Documentation requirements to open or make
changes to accounts are onerous and time consuming when compared to
Australian practices.
In general, the basic accounting principles practiced in the United States
are accepted in Thailand, as are accounting methods and conventions
sanctioned by law. Auditing practices conforming to international standards
are, for the most part, recognised and practiced by authorised auditors in
Thailand.
Information on accounting and financial reporting requirements for a
business in Thailand is available in English from the
Board of Investment.
.
Intellectual property protection
As part of a market entry strategy, Australian companies should do an
intellectual property (IP) audit and be acquainted with how best to protect
their IP rights in Thailand. For more information visit the IP Australia
Thailand page.
E-commerce in Thailand: A guide for Australian business
E-commerce in Thailand: A Guide for Australian Business offers practical advice, facts and insights on how Thailand’s e-commerce marketplaces work and how to access them.
Access the e-commerce guide
Links and resources
Government, business and trade
Thailand-Australia Free Trade Portal
Australian-Thai Chamber of Commerce
DFAT Thailand Country Brief
Thai Customs
Ministry of Commerce
Ministry of Finance
Ministry of Industry
Thai Revenue Department
Thailand Board of Investment
News and media
Bangkok Post
The Nation
www.khaosodenglish.com
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.