SME Business in Thailand offers an incredible opportunity for foreign entrepreneurs, with abundant support for SME investments. Imagine a landscape where your business dreams can thrive, backed by a country known for its vibrant economy, strategic location, and investor-friendly environment. Whether you’re just starting out or looking to expand, Thailand provides the ideal foundation for your SME to flourish.
Thailand is a well-known nation in Asia and throughout the world due to its pleasant climate, welcoming populace, and rich cultural heritage. However, Thailand is also the interesting destination for Foreign Investment. From many years of investment ranking, Thailand is the 1 of the top 20 countries of the best investment, which proves that Thailand is the best destination for foreign investors in both SMEs and BOI businesses.
Main Advantages for Foreigners in SME Business in Thailand
1. Location
Thailand is located in the heart of Southeast Asia, which is a strategic location to connect to other countries nearby; Myanmar, Laos, Cambodia, Vietnam, and Malaysia. This makes Thailand the hub of Southeast Asia, the connecting point to other countries around Thailand. Bangkok, the capital city of Thailand, is one of the most popular destinations for foreigners, and most international airlines are heading to Bangkok.
Aside from its strategic location, Thailand has a positive reputation in other countries around the world. Thailand has had good relations with foreign countries, especially the monarchies in Europe and Asia, with its Relations strategy since the Ayutthaya Period up until now. With this reputation, Thailand is one of the best selections for foreign investors.
With best location and good reputation, Thailand became a good destination for foreigners to get most benefits from investment in Thailand
2. Workforce
Thailand has a skilled work force, and they are willing to work in foreign companies according to the welfare and base salary provided. According to the best location of Southeast Asia, people from many nationalities in the region flow into Thailand, especially, in Bangkok, the capital city. Therefore, recruiting staff is quite easy for every company because there are so many choices with various skills that investors will feel comfortable choosing the most suitable person for their businesses.
– Thai Manpower
Foreign investors aim to hire local manpower according to their language and communication with other companies in Thailand. However, Thai skilled manpower can also communicate in English and many other languages, which are the best advantage for foreign investors. With the well-educated Thai people from both international and local universities, foreign investors can be assured that they will get a good quality of work from Thai skilled manpower.
– Foreign Manpower
As Thailand is the hub of the region, many foreign labourers and skilled workers around the region and the world flow in this popular country to search for the best job for their life. Therefore, it is a good opportunity for foreign investors in Thailand to consider and choose the most suitable staff from various nationalities with various skills
3. Facilities
With the development of every aspect of living in Thailand, foreigners can stay there without any obstructions. Many foreigners decided to live in Thailand for the rest of their lives because of the easy living and good standard of facilities.
– Food and Restaurants
Thailand is the land of food. There are many kinds of food in various nationalities for people’s choices; Thai, Indian, European, American, or Asian food. Therefore, anyone can easily choose the food of their taste and style. Also, there are many restaurants, that are open all the time, so people will not get starved while living in Thailand.
With this easygoing food and lifestyle, foreigners prefer to live in Thailand and spend the rest of their lives there.
– Transportation
With the development of public transportation in Thailand by the government, it will make Thailand the centre of transportation and logistics in Southeast Asia from the projects of highways and motorways connected between each country’s boundaries; Laos, Myanmar, and Cambodia. With the AEC association, of which Thailand is the pillar, Thailand has many projects to increase the good relationship with other countries in the association, and good transportation is a project to make every country easily connected to one another and increase the strength of the association.
Furthermore, the metropolitan system in Thailand is being developed by the government to support people in Bangkok and surroundings to have a better standard of living and to expand businesses to surrounding areas, which increases the opportunities for many SMEs and foreign investors to start businesses in Bangkok and surroundings. Also, the spread of the investment area can increase the growth rate of income in Thailand as well.
– Information and Technology
Thailand is one of the leaders of Information and Technology (IT). With the good education curriculum in IT and the investments in IT businesses in Thailand, there are many knowledge resources and educated manpower in Thailand. These make foreign investors cut their worries about connectivity and digital communication in Thailand out of their concerns.
Furthermore, digital marketing and communication in Thailand are now most common among Thai people. Therefore, social media has a lot more power to influence Thai people. This will give people in Thailand worldwide communication, which will be a good advantage for all businesses to connect to people in Thailand.
4. The cost
The cost of living in Thailand is not so high compared with Singapore and other developed countries, while the standards of human efficiency are quite the same. Therefore, this is a big factor for foreign investors to consider and choose Thailand as the best destination for their businesses. The cost of living is not quite high, and the other expenses related to the cost of living will not be very high either.
– Wages and Salary
The minimum wage in Thailand varies by province but is around THB 310-336 per day (approximately USD 9-10). The minimum salary for a bachelor’s degree holder is around THB 15,000 per month (about USD 430-470). These lower wage levels make Thailand cost-effective for businesses, especially compared to developed countries where wages are significantly higher.
– Personal Tax
Thailand’s personal income tax rate starts at 5% and can go up to 35%, depending on income brackets. The 20% rate mentioned might be referencing a common middle bracket. While Thailand’s personal tax rates are generally lower than those in developed countries, they are competitive and contribute to making Thailand an appealing destination for both living and investing.
5. Government Policy and Promotion
Discover why SME Business in Thailand thrives with government support through promotions and policies, offering foreign entrepreneurs strategic benefits and low costs.
– Promotions for new investors
The Thai government issues many investment policies to encourage investment from foreigners, such as promotions for investment in the southern provinces of Thailand, and promotions to support investments in innovation, alternative energy, and sustainable development. Also, the government creates special economic areas, the boundaries between Thailand and neighboring countries, and provides more benefits to the investors who invest in these special economic areas.
– Tax Benefits
- Corporate Tax Exemption for 8 Years: Available primarily to businesses qualifying under the Board of Investment (BOI) promotions, particularly those in innovation, technology, or certain industries. This benefit is not broadly available to all SMEs but targets specific types of investments.
- 50% Income Tax Reduction in Enterprise Zones for 5 Years: Offered to businesses located in special economic zones or areas designated by the BOI. These zones aim to stimulate investment in less developed regions of Thailand, providing significant tax relief to qualifying SMEs.
- Customs Tax Exemption on Machinery and Raw Materials: Applicable to BOI-promoted projects, especially in industries requiring substantial importation of machinery and materials. This benefit helps reduce the initial capital costs for eligible businesses.
- General SME Tax Benefits: For SMEs not under BOI or special zones, benefits typically include reduced corporate income tax rates rather than full exemptions or major reductions. These are designed to support small businesses but are less extensive than the targeted incentive
– Non-Tax Benefits
The government also provides many allowances for foreign investors, such as the allowance of 100% foreign business owners in some businesses, the allowance for recruiting professional employees to work in Thailand. Furthermore, there are many privileges provided to SME businesses in Thailand, such as the privilege for SMEs with 51% of Thai nationality shareholders, the privilege for the specific location of the business, or the privilege according to each type of business.
All these factors support foreign investors to start up the SME business in Thailand, which will have win-win benefits to both Thailand and foreigners. The increase of investment rate in Thailand directly affects to the growth of income for Thailand. At the same time, foreign investors investing in Thailand will earn the most benefits from the valuable cost of company establishment in Thailand. With these valuable factors, Thailand is always at the top of the list of the best destination of investment and will always be. Anyway, to be successful in their investment in Thailand, foreign investors need to know the trends of Thai market and the natures of Thai people as well.