Setting up Your Business – Getting a Thailand Registration
Thailand offers a lot of potential for e-commerce businesses. The robustness of Thailand’s dynamic business market makes it ideal for foreign investors to set up a business in Thailand. According to the US News of World Reports, Thailand has been ranked first in the global Best Countries for Starting a Business survey, 2020. Thailand is one of the leading trade industries as the Thai customers value foreign made-goods and ultimately help promote new business.
The registration process may seem intimidating, but we are here to help you complete your registration smoothly. To register your company in Thailand, you must adhere to the following guidelines:
- Choose a name for your company if you want to modify it specifically for your Thailand business or go with your original company name.
- Approach the Department of Businesses Development to register your company name. Go with at least three options for the name, and they will give you a waiting period of 2 to 3 days.
- Fill out the Memorandum of Association. According to the current rules, the minimum capital requirement for setting up a Thai limited company is 2 million baht with the setup fee for the government being around 7,000 Baht. The Memorandum of Association must have the following:
- Name of the company that is already reserved.
- Location of your company’s head office.
- Aim and objectives of your company.
- Registered capital must be split into equal shares. The value of the share must be at least 5, and it has no upper limit.
- Details about the shareholders must be disclosed, such as the name, address, occupation, age, and several shares held by each shareholder.
- Two witnesses must be there, and their names and addresses must also be disclosed.
- All the promoters will hold a compulsory statutory meeting with the following agendas:
- Rules and regulations of the company will be discussed and adopted.
- A minimum of 3 shareholders must be there and the number of equity and preference shares and their divisions will also be discussed in the meeting.
- Directors and auditors are appointed in this meeting. Regardless of nationality, there must be at least one director in the company.
- The directors must ensure that the shareholders duly pay up no less than 25% of the share value.
- The authorized director will submit the request for registration of the company to the registrar after the collection of the share prices.
The registration process is not complex; we are here to help you at every step so you can set up your e-commerce business in Thailand effortlessly.
Choose Your Overseas Supplier
You can’t travel to the location where your company is set up all the time. You may have expanded your businesses in various countries, but you cannot go there to carry out the business and meet the supplies yourself. You must choose the right overseas supplier to carry out your business operations, especially the supply for your products.
You have to choose an overseas supplier for the materials to manufacture your products and services located outside of your home country. Hence, you must contact a trustworthy and efficient overseas supplier.
Receive a Sample Product and Quality Check
After you have fixed an overseas supplier for your business that is located outside of your home country, run a proper product quality check after receiving a sample of the product. When you set up a business in a foreign country, you can’t conduct a location quality check all the time.
You may follow these general steps for inspecting products:
- Pull out product samples randomly rather than only inspecting the ones shown to you by overseas suppliers.
- Check the product specifications properly and match them with the standards you provided to the suppliers.
- Verify the packaging standards before selling the products in the market. Apart from the product quality, you must have a good packaging standard for the product.
- If you find any defects in the quality, report it to the suppliers as soon as possible so they can make the required changes before circulating the products for sale.
- Although not always possible, try to conduct at least one on-site test before the products are sold in the overseas market.
After you are satisfied with the quality of the products, you can proceed with the further process of expanding your overseas business.
Work With a Freight Forwarder to Understand the Costs to Import Your Product
A freight forwarder will work on your behalf and carry out the import and export functions for your business in the foreign land. You are the principal, and a freight forwarder is your agent who will work adhering to your guidelines.
He will act on your behalf while acquiring the services from a third party, and the third party will be responsible for packaging, transporting, handling the customs clearance of your products, etc. The freight forwarder will assign the third parties these duties.
Also, it is the freight forwarder’s responsibility to tell you about the cost and charges for the national and international shipment of your products. You must analyze the cost and fees for your shipment. Stay alert and be aware of the false promises of various shipment providers. So make sure you contact a reliable freight forwarder so your shipment can be carried out properly with reasonable fees.
Negotiate with Your Supplier Considering Incoterms
You should consider the rules and guidelines established by the International Chamber of Commerce (ICC) and negotiate with your supplier accordingly. By negotiating skillfully with the suppliers, you can lower the prices, which will be favorable for you. The exponential effects of negotiating considering the incoterms can always benefit your business.
Better prices on ever-growing orders will work in the long run. Besides the price factor, negotiating with the suppliers will build better vendor contact. You will be able to successfully carry out a better transaction which will work in favor of both the supplier and your business.
Compare Sea and Air Freight Options
Whenever you want to ship internationally, make sure you consider the following factors and then make your choice for the mode of shipment:
Cost
The cost comparison is vital. Always make sure that you compare the cost for shipment by air and sea. Sea freights offer more capacity at less cost, whereas air freight charges a lot, even for small packages.
For instance, if you have to pay $200 for shipping a package by sea you will have to pay $1000 for shipping the same package by air. If the value of the package you are trying to ship is not very expensive, then you should go for shipping via sea.
Time
Some packages are time critical. You must deliver the packages on time as they require delivery within a very short span. In that case, the customers are also willing to pay more for the shipment because they need the package as soon as possible.
On the other hand, if you see that the package is not time critical and will not be affected by a longer delivery time, you should go for sea shipment.
Type of Cargo
If you want to ship bulky packages that require a lot of capacity and are not time critical, then you should go for Maritime shipping. Also, fewer restrictions are placed while shipping by sea than air freight.
Air freights are very restrictive about the size and weight of a package. It also becomes very costly to ship bulky packages by air. It has a long list of rules and regulations you must avoid and many restrictions.
Safety
You must ensure that your products reach the customers safely without any hindrances. There is less mishandling when shipping takes place through the sea when compared to air shipment.
The freight carrier must transport the products safely so unforeseen circumstances will not harm or destroy the packages. Consider safety when choosing the mode of shipping.
Accessibility
The packages you are shipping must be accessible at some point in time. Air freight is more accessible than maritime shipping as connectivity throughout the world is way better by air than by sea. Airports are very well organized. The well-defined downtime is also much shorter in air freights when compared to sea shipping.
While setting up an e-commerce business in a foreign land is hard, you have to make sure of all these factors so you can successfully expand your business in Thailand.
Prepare and Send All Documentation
Setting up a company in any foreign country requires a lot of documentation. Thailand is no different. You have to have the proper business documents before starting your e-commerce in Thailand.
Prepare all the essential documents and send them to the overseas country for verification. When business authorities are satisfied with the integrity of your documents, you can freely carry out your trade in Thailand.
You must prepare and send the following documents overseas:
- Original ID and passport-size photo of the person in the company registration.
- Assigned copy of the ID passport
- Five necessary copies of the company registration with stamp and authorized signature that is valid for three months
- Copy of the PP20 VAT license
- Import registration form
- Various other documents that are necessary to authorize an agent such as:
- Letter of Authorisation
- Copy of company registration that is valid for 3 months
Track Your Goods for Arrival
To ensure your goods are imported to the overseas country, you can track your goods. Choose a shipment company that facilitates tracking so you can always see the status of your goods till arrival. Starting from dispatching the products from the home country to receiving the products in the overseas country, continuous tracking will help you remain tension free as your goods are on their way.
Various Taxes and Permits Are Required to Import to Thailand
You have to acquire the following taxes and permits to import your goods to Thailand:
- Air waybill (AWB)
- Invoice
- Shipping instructions
- Work permit
- Several types of clearance such as:
- Board of Investment (BOI)
- Bonded warehouse
- Free Trade Zone (FTZ)
- Export Processing Zone (EPZ)
- 19 BIS (duty drawback under section)
- Shipping mark
- Custom Clearance
- VAT license
Overseas Suppliers In Thailand
Here are some overseas suppliers in Thailand, including Locad, with brief summaries:
Locad: Locad is a leading third-party logistics (3PL) provider in Thailand. It offers a wide range of services, including warehousing, fulfillment, transportation, and cross-border shipping. Locad has a network of warehouses and fulfillment centers across Thailand, and it uses a variety of shipping carriers to ensure that orders are delivered on time and in good condition.
Pantavanij Group: Pantavanij Group is a Thai conglomerate with a diversified portfolio of businesses, including logistics, manufacturing, and retail. Its logistics division offers a wide range of services, including warehousing, fulfillment, transportation, and cross-border shipping. Pantavanij Group has a network of warehouses and fulfillment centers across Thailand, and it has a large fleet of delivery vehicles.
Asiatrans Express: Asiatrans Express is a leading freight forwarder in Thailand. It offers a wide range of services, including air and ocean freight forwarding, customs clearance, and warehousing. Asiatrans Express has a network of offices across Thailand, and it has strong partnerships with shipping carriers around the world.
Thai Air Cargo: Thai Air Cargo is the cargo division of Thai Airways International, the national flag carrier of Thailand. It offers a wide range of services, including air freight forwarding, customs clearance, and warehousing. Thai Air Cargo has a network of offices across Thailand, and it has a large fleet of cargo aircraft.
Kerry Express Thailand: Kerry Express Thailand is a leading last-mile delivery provider in Thailand. It offers a wide range of services, including same-day delivery, next-day delivery, and international shipping. Kerry Express Thailand has a network of delivery centers across Thailand, and it has a large fleet of delivery vehicles.
Conclusion
Thailand has grown to be a profitable business destination, and plenty of businesses want to expand and set up their business in Thailand. With a clear grasp of the import laws in Thailand, you can partner with the right service providers to simplify imports and set up your base in the country without having to worry about legal implications or attracting heavy penalties.
