Are you looking for a country to launch your startup? Are you looking for an entry point to the Southeast Asian market? Are you looking for a location where you can establish your tech team and where also new technological innovation is contemporary? Then, why not consider Thailand? Thailand is a country known around the world for its natural beauty, rich culture, and exquisite cuisine. But you may be unaware that Thailand is also becoming a popular location for both Thai and foreign entrepreneurs to launch their tech startups.
And, once you start to take a look at the country from a cost of living, infrastructure, and investment perspective, the popularity begins to make perfect sense. Thailand has a remarkably low cost of living, considering the quality of its infrastructure. With high-speed internet available practically everywhere, a stable power grid, and low housing, food, medical care, and transportation costs, the country is well ahead of the curve in attracting tech talent from all over the world.
One of the best things about starting a business in Thailand is that Thailand has a strategic location and serves as a gateway into the heart of Asia, which is home to the largest growing economic market in the modern world. Southeast Asia has 600 million populations which constitute only half of the 1.2 billion population in India, but it has higher spending power with US$ 1.4 Trillion.
Here are our top reasons to start a new business in Thailand:
- Digitally Ready Population:
Having over 30 million active Facebook users, Bangkok could be named the capital city of Facebook (the highest ranking in the world). Moreover, half of the population in Thailand (over 30 million) is Line active users. The mobile penetration rate is roughly 133%. Thailand is among the world’s top 10 countries that spend the most time watching YouTube videos. And most importantly, 3G/4G high-speed mobile internet has already covered the nationwide area. So Thai digital consumer is more than ready to adopt new technology.
With a market size of 65-million-people, it can serve as an early market during the initial stage of startup before scaling up and expanding to 600 million consumers in the regional market.
- The Gateway to Southeast Asia:
One of the best things about starting a business in Thailand is that Thailand has a strategic location and serves as a gateway into the heart of Asia, which is home to the largest growing economic market in the modern world.
Thailand also offers convenient trade with China, India, and the countries of the newly formed Association of Southeast Asian Nations, which is commonly known as ASEAN. People who set up a company in Thailand will also have easy access to the Greater Mekong sub-region, where newly emerging markets offer great potential for doing business in Thailand.
- Ease of doing business in Thailand:
World Bank Group’s 2020 Ease of Doing Business report ranks Thailand 21st out of 190 countries, up by six places compared to the previous year. Among areas in this report which showed the greatest improvement was a reduction in the number of steps required and the amount of time needed for obtaining construction permits, and the score for ease of shareholder suits that, in turn, helped improve the ranking for protecting minority investors.
Forbes listed the country as the 8th best-emerging market of 2020. Its current account balance was 5.6% of GDP, with direct investment stocks inward exceeding US$222 billion, according to UNCTAD’s 2019 World Investment Report.
The Thai Government has taken a consistently favourable stance to reduce so-called ‘red-tape’ policies and facilitate foreign investors, contributing to Thailand’s economic and technological growth. Multinational Companies (MNCs) have set foot in Thailand over the decades in a quest to be a part of the thriving economy. Almost all major manufacturing giants have a base in Thailand and continue to grow.
- Thailand’s Growing Economy:
Economically, Thailand is characterized by steady growth, strong exports, and a vibrant domestic consumer market. Abundant natural resources and a skilled and cost-effective workforce all help to attract foreign investors and enable them to prosper and develop the industry in Thailand.
Thailand, the second-largest economy in ASEAN after Indonesia, is an upper-middle-income country with an open economy having a gross domestic product (GDP) of $529 billion and 4.1% annual growth in 2018, according to World Bank.
- Strong supply chain and value chain capabilities:
Thailand is a country of agricultural wealth. They are Ranked among the top three ASEAN exporters and one of the world’s biggest exporters of food products and agricultural products such as rice and natural rubber. Thailand is home to the biggest seafood company in the world, Thai Union Group, and the world’s third-biggest sugar manufacturer, Mitr Phol. The Ministry of Commerce said that in 2021, Thailand’s export grew by 17.07% to 271.17 billion US dollars.
The top five export categories are motor cars, parts and accessories, automatic data processing machines, rubber products, and precious stones and jewellery. Major export partners are the United States, China, Japan, Vietnam, Malaysia, Hong Kong, Australia, Singapore, Indonesia, and India. Its role in the international supply chain not only increases Thailand’s business effectiveness but also results in quality development and knowledge and technology exchange among businesses, equipping them with capabilities to compete internationally.
- BOI Support for Tech Industry:
The Thai Government wants to promote the tech industry. Therefore, they allow foreigners to establish a wholly-owned Startup entity through the “Thailand Board of Investment (BOI)” channel (or own a majority share in the company). In summary, as a foreigner, you can establish the entity following these steps: Go to the BOI website, fill out the form online and schedule the meeting with BOI officers, which I find to be super nice and very helpful. Since most Tech Startups fall into the Software business category (section 5.7) under the BOI definition, the whole process usually takes less than 60 days. Once granted the BOI certificate, you can incorporate the wholly foreign-owned entity with the Department of Business Development (DBD). Request a “Foreign Business License”, which you can easily obtain since you have already been granted a BOI certificate. Open the business bank account.
As a BOI-supported company, you are permitted a fast lane to request a Work Visa and Work permit through the BOI e-Expert system, which is way easier and faster than the normal process.
- Thailand’s Startup Ecosystem:
Thailand’s Startup Ecosystem is growing at lightning speed with tons of incentives from the government. Business incubators and accelerators support early-stage entrepreneurs by providing them with various business development services, access to office space, connections to potential customers, and investment facilitation services. Most of the major corporates in Thailand have already set up Startup investment funds or Accelerators programs ranging from:
< Banking — SCB Digital Ventures, Kbank’s Beacon Venture, Krungsri Finovate, Krungsri RISE Fintech Accelerator, Bangkok Bank’s Innohub, and Bualuang Ventures.
< Real Estate — SiriVenture, Ananda’s Urban Tech
< Energy — PTT (Thailand’s largest company)
< Telecom — Intouch’s Invent, AIS The Startup, DTAC Accelerate, True Incube
< Internet: Ascend Capital
< Industrial- SCG’s AddVentures
- Thai Government’s 2021 Incentives
Foreign investors, professionals, and retirees would be able to relish new incentives in Thailand as the Thai government looks to interest high-earning foreign residents in helping Thailand’s COVID-19 recovery. On September 14, 2021, Thailand’s cabinet, through a resolution, introduced tax, immigration, and land ownership incentives designed for skilled professionals and foreign investors. These incentives stimulate the country’s economy, which has been severely impacted by the pandemic. As per a government spokesperson, the Thai Government assumes the incentives would attract a horde of foreign investors as well as professionals in the coming five years, which would contribute over the US $30 Bn to Thailand’s market economy.
Along with the rapid growth Thailand is relishing, it also reaps the benefits of being a friendly, competent, hospitable culture immersed in history. Challenges are there everywhere in the world. Add startup to that equation, and the rate of failure is intimidating. But individuals don’t get into startups to be unsuccessful or repeat their past; they work to see that their ideas or concepts come to life. Thailand has made all efforts to improve the country’s economy and promote foreign relations and technological advancement. It’s no surprise that Thailand is today among the popular business destinations for foreign investors. The foundation of the dreams starts here in Thailand, and it’s exhilarating to imagine what boundless harvests lay ahead in Thailand’s evolving economic future.
Start-Up Builder, Innovation Strategist and Intrapreneur