Thailand “in Russian”: 11 ideas for starting a business in Thailand

There are many Russians in Thailand. Some come here to take a break from the bustle of Russian megacities, while others are not averse to moving to a permanent place of residence. However, getting a job for a foreigner in Thailand is not easy, even very difficult.

The Thais have their own customs, their own laws, and you can say this: “We are not welcome there.” In the sense, they are waiting for a vacation, but not for permanent residence. Although there is a way to legally live in this amazing country: open your own business. However, before you rush into the abyss of water, it is advisable to find out what pitfalls await you on the way to the paradise islands.

Business immigration to Thailand

If you have already been to this Asian country, you probably have only the best impressions of the friendliness, affability, and smiling nature of the local residents. A wonderful holiday in Phuket or Samui has already conjured up bright, rainbow-colored pictures in your mind, how you relax on the ocean from morning until late evening, while the company you opened here or in Bangkok brings you considerable income?

Do not hurry. Obtaining citizenship in Thailand is difficult, if not almost impossible. Even marriage to a Thai does not provide any advantages: you can apply for a residence permit only after being married for at least three years. And only after 10 years you will have the right to take the Thai language exam and apply for citizenship in the Kingdom of Thailand.

• It may take more than one year before receiving the coveted passport - documents are processed for a long time.

In addition, by marrying a foreigner, a Thai citizen loses her citizenship, receiving only the status of a permanent resident, and will only be able to return it after 12 years. This is how fictitious marriages are opposed here, but which Thai woman will voluntarily renounce her citizenship?

Other traditional opportunities for obtaining citizenship in a foreign country also face numerous obstacles:

• Go to relatives? It is possible, but only if it is close relatives. These include children, parents, siblings, and grandparents who have been citizens of the Kingdom for at least five years.
• Study in Thailand? Please! In this case, you will receive a residence permit for a year, then it can be extended. The age of the student does not matter: whether he is 20 or 70, what is important is that he has a signed training contract and pays the full cost of the first course. Only after graduating from university can you try to apply for permanent residence on this basis. However, foreign students still have one advantage: one of their parents can obtain a residence permit in Thailand.
• Buying a home. A good way to obtain permanent residence if you have $200,000, only such a purchase of real estate gives the right to obtain a residence permit; when purchasing real estate worth over $500,000, it is possible to obtain a permanent residence permit.
• Starting a business. According to Thai laws, in any opening of an enterprise, Thai citizens must own at least 51% of the shares or authorized capital (which is at least 2 million baht, almost 3,700,000 Russian rubles).

To obtain a residence permit, you need to submit documents to the police station or the migration department. The application is considered within a month, and the motives that prompted the migrant to come to live in Thailand are clarified. The permit is renewed every year.

A standard package of documents is the same as for any country, in addition to them you need a certificate from the bank about the availability of funds to support the family and a certificate from the police about the absence of conflicts with Thai law.

Step-by-step process for starting a business

To open your own business, you need to apply for a business visa and obtain permission. And only then can you start registering class=”aligncenter” width=”1024″ height=”545″[/img]

No less important is the choice of the city where a person will carry out his activities. In addition to these cities, they prefer to open a business on Koh Samui. Step-by-step algorithm of actions in 2020:

1. Applying for a business visa through the embassy.
2. Attracting partners.
3. Collection of documentation.

On a note! Having a minimum authorized capital and a reliable partner, you need to immediately obtain permission. In this case, a person must clearly know what he will do.

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Business culture in Thailand

It is also difficult for foreigners to find employment in Thailand. Many jobs are only for Thais. The list of such specialties is very long: in the Kingdom of Thailand they only care about their compatriots, giving them an advantage over citizens of other countries. Essentially, this is the Thai nation's way of survival. Banned for migrants:

• any types of physical labor that do not require qualifications;
• growing plants and animals;
• construction;
• work as accountants, lawyers (except those related to international auditing and law);
• any types of folk art traditional to Thai culture and religion.

In the latter case, the main law of the state applies: “The land and everything on it and in it belong to the king.” In simple words, in Thailand everything that affects natural resources and the environment, national culture and art, and the traditions of the Asian country is prohibited for foreigners.

This is only a minimal part of an extensive list, however, it is clear from this that in such conditions it is difficult for a Russian citizen to find a job in Thailand. Even working as a salesperson or hairdresser is prohibited for a foreigner. Most visitors work as guides, promoters, realtors, and teachers. However, the first three types of activities are also prohibited, so many live “on a bird’s license.” Violation of the law is punishable by large fines or imprisonment.

Other restrictions apply to attracting Thai citizens to your business:

• All banking and financial enterprises must be at least ¾ owned by Thai citizens. The same applies to insurers;
• 70% Thai ownership must be inland shipping companies.

Thailand is a country of tourists. Millions of vacationers from other countries of the world come here every year, so it is not surprising that it is the tourism business that brings profit to the state. Therefore, the laws of the country are set in such a way as to prevent the withdrawal of capital from the country.

Applying for a business visa

A business visa to Thailand is necessary if a person is going to open his own business. It is required for all citizens and is issued for a year with the possibility of extension. The advantages of this document compared to a work visa are that it opens up more opportunities.

A multiple visa will require a more voluminous package of documentation.

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Where are documents submitted?

You need to contact the visa center or embassy in advance. You can make a pre-registration through the official website of the departments, but you must visit them in person. A representative with a notarized power of attorney can submit documents in 2020.

Screenshot of the Thailand website where you can get a visa
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Required documents

If the documents are submitted in full and the forms are filled out correctly, this will significantly speed up the application process. List of papers:

1. Foreign ID card and passport of your country.
2. Two photographs 40 x 60 mm.
3. Statement. ()

   
   Sample of filling out a visa application form for Thailand

4. Bank account statement.
5. Paid visa fee receipt.
6. A certificate that confirms that permission to open a business has been received.

   
   Certificate of Incorporation

7. Tax reporting.
8. Other documents related to business activities.

IMPORTANT! Not only originals, but also copies of papers and certificates are presented.

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Processing times and costs

The period varies from ten days to several months. The main difficulties arise when collecting and submitting documents. Once they have been accepted, all that remains is to wait.

The average cost of this type of visa is about 300 euros. If a person is going to fly to his homeland and return to Thailand, then he needs to obtain permission to return from the migration service. Its cost is 30 euros.

More information about the cost of obtaining a visa to Thailand can be found by following this link.

A social survey showed that it is better to use the services of specialists to speed up the registration process and avoid mistakes.

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Forms of business in Thailand

However, many foreigners are interested in starting a business in Thailand, so information on how best to organize it will not be superfluous.

There are two main forms of business organization: limited liability partnerships and private limited liability companies .

Limited partnerships - a type of company in which there is a partner or several partners who are responsible for the activities and debts of the enterprise personally and with their property, and those who do not bear such responsibility. If foreign citizens belong to the second category of partners, the company is not subject to restrictions on types of activities. Therefore, foreign citizens often choose Thai partners to manage their business.

The second type of business organization is Private limited companies, otherwise private limited liability companies. They look like this:

• at least seven shareholders;
• Everyone must have at least one share;
• if foreign partners and shareholders own 40-50% of the shares, or this share is less, but a foreigner is appointed manager (director), Thai
• shareholders must confirm the purchase of shares and the source of funds for this purpose. Fraud is punishable by a fine, imprisonment, and the company will be closed.

In general, Private limited companies are somewhat reminiscent of our joint stock companies: shareholders elect directors, approve the balance sheet, and develop strategies and tactics for operating in the market. Each shareholder is required to initially contribute at least 25% of the value of his shares and be ready at the request of the board of directors at any time to pay the remaining amount.

Five profitable areas for starting a business

There are a lot of ideas for a profitable business, but not all of them will start generating income at first. There are many tourists in Thailand, but the government has banned related activities for foreigners.

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Russian grocery store

Investments - from 100,000 euros.

Monthly profit - from 3000 euros.

For a grocery store to become successful, you need to take care of some nuances:

1. Rent a room in a crowded area with good traffic.
2. Conclude agreements with suppliers.
3. Have a Thai chef to prepare food for sale.

At first, you can stand at the checkout yourself, and then hire staff. Arrange promotions and discounts in your store. Be sure to take care of good interior design of the room and signage.

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Bar, cafe or restaurant

Investments - from 130,000 euros.

Monthly profit - from 2500 euros.

Experienced entrepreneurs advise creating a Thai inn. For success you need:

1. Have experience in the restaurant business.
2. Come up with a feature that will distinguish the establishment from others.
3. Provide entertainment and a variety of cocktails.

Many people get burned by not paying special attention to the choice of premises. There is no need to rush. Then it will be difficult to change the location and, most likely, a decision will be made to close the bar.

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Vehicle rental office

Investments - from 30,000 euros.

Monthly profit - from 800 euros.

To make money from rentals, you must have a decent fleet of vehicles. Bicycles and motorcycles are popular in Thailand. To get things moving, do the following:

1. Make an agreement with your competitors so that no one interferes with each other’s work.
2. Find a reliable companion.
3. Make sure you have your own people in the police.

If you don’t have your own transport fleet, but have the opportunity and desire to create one, it is better to buy used motorcycles. Such a business will require keeping records of insurance policies, periodically sending the vehicle for maintenance, and paying taxes.

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Opening of a kindergarten

Investments - from 20,000 euros.

Monthly profit - from 2000 euros.

In order for a kindergarten not only to function, but also to make a profit, it is necessary:

1. Obtain permission to conduct such a business.
2. Hire a reliable staff of workers.
3. Advertise your kindergarten.

Do not forget that such enterprises are under special control by the state. The premises must be in perfect condition, and food preparation must comply with the required standards. Arrange fun activities for children so that they enjoy going to kindergarten.

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Renting apartments

Investments - from 30,000 euros.

Monthly profit - from 800 euros.

Success is guaranteed if an entrepreneur has:

1. Housing registered to partners.
2. An established customer base.
3. Staff of agents.

Due to the fact that a foreign citizen does not have the right to own real estate, the most pressing issue is partners.

You can, of course, do without them and engage in dealer activities. Rent yourself, and then renew the contract with other clients. But this is not entirely legal and the profit is minimal.

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Small Business Taxes in Thailand

The tax system in Thailand provides for Limited partnerships a general tax rate of 30% of the net income of the enterprise. Partners pay 10% of the profits received to the treasury.

• The income tax that Private limited companies must pay is 30%.

For small companies with a paid-up share capital of less than 5,000,000 baht, flexible tax rates are established:

• if the profit does not exceed 1,000,000 baht - the rate is 20%;
• with net profit from one to three million baht - 25%;
• over three million – 30%.

BOI benefits for companies

Organizations are divided into 6 groups, each of which is assigned certain concessions:

• Exemption from corporate income tax for 3 to 8 years, or its reduction by 50%;
• Opportunity for a foreigner to own a company in the Kingdom;
• The ability of a foreign company to own land;
• The ability to accept foreign qualified employees without restrictions (or with fewer restrictions than usual);
• Exemption from/reduction of import duties on equipment;
• Exemption from/reduction of import duties on raw materials;
• Reimbursement of costs for logistics, electricity and water supply.

In addition, the Investment Committee helps to complete paper formalities using the “one window” principle. For example, issue work visas for employees.

How to open a business in Thailand: 5 steps to success

Company registration and permits are issued by the Ministry of Commerce of Thailand and the Commercial Registration Department.

Step 1. Preparatory

• The most popular form of doing business in Thailand is Private limited companies (corresponding to our LLCs). To register an enterprise, it is required to attract at least 7 people, of whom at least two must be citizens of the Kingdom of Thailand.
• In the authorized capital of the enterprise, the share of Thai shareholders must exceed 50%. Foreign citizens cannot have a controlling stake, so foreign business owners often attract a nominee for successful operation. This is a person or group of persons, Thai citizens, who own shares in a company on behalf of the actual owner (a foreigner manages the company through front men).
• Is this legal or not? Legally, the presence of a nominee is legal, when it comes to people who, due to many circumstances, do not want others to know about his participation in business in another country. If a doctor or teacher invests in a beer bar in Thailand, it is unlikely that anyone will approve of his actions, but when Thai citizens are nominated in order to retain the management of a company whose activities are prohibited for foreigners, this is already a crime.
• Thais do not always understand their responsibility for such actions, and often agree to become nominees of foreign shareholders. However, not every kind and willing Thai can be attracted to participate in business. They must be ready at any time to confirm the availability of funds to purchase shares and the source of their receipt.

Step 2: Register your name

• After approval of the list of participants (shareholders), the corporate name of the future company is selected and the address for the official registration of the office is determined. The list of company names must consist of at least three options. It is submitted to the Department of Commerce for approval.
• This procedure is necessary to avoid the same name of a newly opened enterprise with previously registered ones; in addition, Thailand has its own restrictions on the use of some names. After approval, which is notified to the applicant within 3 days, he has a month to further register his own business.

Step 3. Signing the Memorandum of Association

The Memorandum is the same as in Russia the Memorandum of Association or Charter. It establishes the main legal points:

• name and official address; amount of authorized capital; founders and their shares in the authorized capital; other important organizational points.
• The Agreement (Memorandum) is required to be signed by all participants. It is submitted to the District Business Development Department after payment of the registration fee.
• For registration of the memorandum, shareholders of Private limited companies pay 0.05% of the authorized capital.

Important! For foreigners who must obtain a work permit, an additional fee of 2,000,000 baht per permit is required.

Step 4. Business registration

• After registering the Memorandum, you can submit an application to the Ministry of Trade, which registers the enterprise. This must be done no later than three months after signing the Memorandum and its registration. A fee is paid for company registration - 0.5% of the amount of the authorized capital, but not less than 5,000 baht.
• If everything was done correctly and accurately at the previous stages, there should be no problems with registration, but by this time at least 25% of the shares must be paid up, and government authorities may require the sources of income of each shareholder to be disclosed. Bank statements and other documents will be required.
• Important! In Thailand, land belongs to the king and cannot be bought by an ordinary person. The acquisition of land is possible only by an enterprise: in this case, the Land Department checks the legality of the transaction.

Step 5. Registration with the Tax Department

• In Thailand this is called obtaining a company tax ID. The document is issued by the Department of State Revenues and Duties. The certificate is a plastic card with an individual taxpayer number.
• A company must be registered with the Department within two months after its establishment, after which it is required to open a bank account.
• A business is subject to income tax if its income exceeds 600 thousand baht per year. To avoid fines, documents must be submitted to the Department within 30 days of reaching this amount.

Necessary documents for starting a business

List of papers without which you will not be able to register your rights to future activities:

1. Passport of all participants in the process.
2. Registration documents for renting the premises where the company's office is expected to be.
3. Business plan.

Statistics indicate that the cost will cost approximately THB 35,000.

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Obtaining a business permit

To obtain a business permit, you must submit documentation to the commercial department of the Country Department. This occurs in parallel with the submission of documents for company registration. All of them must be in Thai.

If the employees of this department, after studying the documents, understand that the laws have not been violated, then they issue a certificate. The latter will be required for state registration of the company.

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How to invest in Thailand

For foreigners, business in Thailand has its own characteristics, as discussed above. So is it profitable to invest in this Asian country?

Considering the peculiarities and laws of the country, which set many restrictions for foreigners who decide to make a profit, you should approach organizing a business with caution. However, there is one area that was, is and remains attractive for investment. This is real estate. Today, the share of foreign buyers of real estate in popular resorts is up to 70%.

• The state encourages housing construction in Thailand, and experts talk about the high profitability of real estate at affordable prices.

Foreigners buy ready-made real estate or build their own. As already mentioned, you cannot buy land as your own in Thailand, but there are two ways out of the situation:

• rent a plot of land;
• found a company and register the purchase and sale of land for the company.

Important! The purchase of real estate is not the basis for preferential registration of a residence permit, unless its amount exceeds $500,000.

Pitfalls of doing business

First of all, it is worth saying that a number of restrictions will arise for an entrepreneur from abroad in this country.
Therefore, not every type of business is suitable. You should only choose the one that is permitted by the authorities. According to Thai law, foreign businessmen are prohibited from doing anything in this country that the local people can make money from. Thus, you cannot carry out activities in agriculture, handicrafts, or work with wood.

However, there is an exception here too. If you are ready to give jobs to local residents, that is another matter. And besides, it is very relevant for Thailand. Such a decision will also be a plus for a Russian entrepreneur, since labor in this country is cheap, and social guarantees are provided by the state.

The following activities are prohibited:

• forestry;
• rice cultivation;
• fishing;
• agriculture (plant, livestock) ;
• purchase and sale of land;
• radio and television broadcasting;
• publication of periodicals;
• antiques trade;
• collection of Thai herbs.

The following types of activities are protected by the state:

• transportation of goods within Thailand;
• sale or manufacture of weapons;
• mining;
• woodworking.

How to buy and sell a business in Thailand

Despite the fact that advertisement sites are full of offers for the sale of ready-made businesses in Thailand, including in popular resorts, you should not immediately make a purchasing decision. No one will just sell a profitable business because “I’m tired and want to go home.” Perhaps a bar or scooter rental, or a beauty salon generates income only in the “high season”, and the rest of the time, rent and staff salaries “eat up” all the money earned.

Therefore, try to find out from the Russians living nearby (and there are a lot of them in Thailand) whether the picture that the owners paint is so rosy. Perhaps this salon or bar has been on sale for more than one year (and will be on sale for the same amount of time).

Approximately what you can buy and for what cost in Thailand:

• a nightclub in Patong for 2 million Thai baht and then a similar one for 5 million,
• cafe with Russian cuisine for $8,000.

Most offers on the market for the sale of ready-made businesses are related to real estate (hotels), entertainment (bars and restaurants) and are aimed at tourists. Finding an option that suits your budget is not difficult, but before making a purchasing decision, it is important to weigh all the pros and cons in order to avoid the need to urgently sell a business that has become unprofitable “because you’re tired.”

Vehicle rental office

A bike rental point, thanks to which you can live quite well in Thailand
. A lot of foreigners are engaged in this business, since a license costs a penny, and you can earn quite decent money. However, no one is engaged in dumping, and there is always a demand for mopeds or cars. And during the season, from October to March, you can easily earn enough for the whole year.

What criteria must a company meet to qualify for this program?

First of all, the company must carry out activities that are strategically significant for the country. These can be advanced technologies, complex modern production, IT technologies. You can see which companies are already taking advantage of the program and what types of businesses they operate here. Depending on the field of activity, the company is assessed according to the following main criteria:

• Added value must be at least 20%. For electronics and agriculture from 10%.
• The debt to equity ratio should be 3:1 for new companies. For those already employed, it is determined individually.
• Production equipment must be no older than 5 years (with the exception of certain types of equipment).
• The minimum investment capital must be 1 million baht ($30,000), excluding the cost of land and employee salaries. An exception is if it is necessary to attract qualified specialists whose annual salary is from 1.5 million baht ($45,000).
• Production must comply with ISO 9000 or ISO 14000 quality standards.

These are the basic rules, but there are additions and clarifications to them that are best studied for the specific type of activity of the company.