Challenges & Pitfalls of Setting up a Foreign Business in Thailand

Updated: Aug 6


Challenges of setting up foreign business in Thailand, MRA Grant Singapore

Thailand is commonly known as “The Land of Smiles”, and is a popular travel designation.

However, it is a highly complex matter when a foreign entity decides to venture into the Thailand market. Although Thailand welcomes foreign investment in general, there are some potential challenges and pitfalls when it comes registering and doing business in Thailand as a foreign business.



1) Selecting the Business Structure

There are many business structure types to consider as a foreign business. Some examples can be BOI company, Thai Limited Company, Thai Representative Office & Thai Partnership etc. Selecting the wrong company type may results in heavy financial outlay, unable to obtain the license to operate, failure to obtain a work permit, incur unnecessary costs & many more.



2) Finding the right Thai Partner

To be successful in the Thailand market, foreign entities may often seek to collaborate with a Thai business partner, either through a joint venture or distributorship. In such cases, the foreign entity may be concerned about the Thai side seizing control of the joint venture company or simply underperforming as a distributor.



3) Language Barrier

Thai Language is the official language of Thailand, which is also known as Central Thai. The language is being taught in schools and used for official business. To add on, each region has its own dialect and these dialects may not be even understood by Thai people from other parts of the country. Although there are plenty of English speaking Thai people, language remains a major issue for foreign businesses seeking Thai business partners or employees.



4) Cashflow Finance

A foreign business may have the perfect idea to set up a business in Thailand. However, any solid business planning requires a great understanding of business costs. Without the right advisory partner, the foreign entity may missed out on hidden costs during the business budgeting exercise.



5) Culture

Heading to Thailand for a vacation is totally different from running a business in Thailand. Unlike some of its neighboring countries, Thailand is a collectivist society and the needs of the group are placed over those of the individual. Thai people are also subtle and indirect in nature, and they focused on feelings and emotions during negotiations.




Apstellar Value Proposition in Thailand


Apstellar has a comprehensive suite of consultancy services to address these issues mentioned. We will seek to understand our client's desired business model, and craft up a detailed business plan from business setup, finding Thai partners or distributors, hiring Thai employees and continue to support some of your business functions like finance, business development and marketing.


Our expertise are formed through our team's diverse background, knowledge in the Thailand culture, marketspace & language and established partners in Thailand.


For Singapore companies, the Market Readiness MRA Grant supports overseas expansion activities in Thailand such as Marketing and PR activities, Trade Fairs, Business matching, overseas employee salary, office space rental and documentation expenses.