When it comes to doing business in Bangkok, there are many factors which must be considered. Thailand is an attractive place to start a new venture, or to create a subsidiary firm for tasks such as manufacturing. Many investors are drawn in by cheap labor costs or the desire to expand the market for their consumer goods. Thailand has been open to foreign investment since 1997, when the country experienced a depression and began looking for ways to help their struggling economy regroup.
Since that time, new foreign businesses have only grown, as the government offers some nice tax incentives as well. However, doing business in Bangkok can be a complex maze of red tape and regulations, and sorting through it all can be difficult. To help give you a clearer understanding of what is involved, let's take a closer look at this topic below.
Getting Started
Before moving forward, it is important to take stock of your goals and resources, and whether or not you are prepared to jump the regulatory hurdles involved with starting a business in Bangkok. All new companies must comply with the Foreign Business Act, which strictly limits what types of businesses foreigners can own. Certain industries are closely protected, and if you wish to enter these, you will be required to give up majority control. The law states that only a citizen of Thailand can own the controlling interest in these restricted fields.
However, other areas are open to entry, and manufacturing is likely the most popular choice. Under the FBA, foreigners can manufacture goods and sell them in the country, with little or no limitations. Thus, Thailand is a good place to locate a manufacturing subsidiary for a larger conglomerate, as the savings can be significant. Yet, other sectors like service industries (such as installation, maintenance, leasing and banking) are strictly off limits for foreigners.
Getting Help
Most experts recommend that you hire professional help, if you are planning to start a business in Bangkok. Why is this? Not only are the regulations in-depth, there are submissions which must be made to obtain a Foreign Business License (FBL). These forms must be filled out in Thai, and bringing in a competent local attorney or other consultant is the wisest course of action.
They will be able to guide you through any potential obstacles, and ensure that your new company is properly registered. Failing to comply with the regulations, even unknowingly, comes with stiff penalties - and it will result in your business being shut down! Clearly, hiring a professional who is knowledgeable about the process is a worthwhile investment, as it will give you peace of mind.
Other Considerations
There is one loophole to the current law, requiring foreigners to take on a majority Thai partner in certain fields. The U.S. and Thai Treaty of Amity, exempts American citizens from this limitation. This created excellent conditions to start a business in Bangkok, which many U.S. entrepreneurs have taken advantage of. However, a more recent World Trade Organization treaty has made the future of this Amity Treaty uncertain, and it is unclear if this preferential treatment will continue. There is a risk that the laws will change, which is one factor to consider before entering these areas of business within Thailand.
Is It the Right Move?
Navigating the regulatory waters in Thailand can be tricky, especially without professional guidance. The laws are rather strict, and the penalties for breaking them can be severe. That being said, with experienced help and a solid plan, starting a business in Bangkok can be a successful venture. It affords owners a chance to broaden their markets and the potential to cut down on labor costs. These factors must be weighed on a risk versus reward basis, which will allow you to make the best decision possible, and to move forward with confidence.
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Article Source: http://EzineArticles.com/?expert=Jeff_Molenda
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