Tropical beaches, islands galore, lush jungles, a cheap cost of living all topped off with a delicious cuisine – who wouldn’t want to expand their business into Thailand? As a ‘farang’ or foreigner, however, this does come with some hurdles. There are many attractive incentives to expanding into the former Tiger Economy of Thailand, good infrastructure, cheap start-up costs for new businesses and close proximity to other Asian markets. On the other hand, things like language and cultural differences may be barriers to entry.
Here are some tricks of the trade to help you successfully expand your business into the Land of Smiles.
Have a Great Business Plan
As with any business venture or expansion, a great business plan is vital. It’s considered the key to success. Your business plan should outline what you’re trying to achieve, how you’re going to achieve it and when you’ll achieve it by. Your business plan should plan for every facet of your Thailand expansion goals.
Devise a Market Entry Strategy
A market entry strategy is basically concerned with your customers and competition. You should do extensive market research on the Thailand market and analyse your competitors. You should find out everything you can about who your customers and your competitors are. When you have a clear-cut idea of your customers and competitors, you can start devising all of you marketing and branding strategies.
Decide How You Will Register Your Business
There are a couple of different options when it comes to company registration. The options include registering as a Public Limited Company, Private Limited Company, Branch Offices of a Parent Company, representative offices, licensing or franchising in Thailand.
In Thailand a PLC (Private Limited Company) is the most popular form of company for businesses. This is probably because a PLC can be 100% foreign owned (except in some special industries reserved for Thai nationals) and investor liability is limited to the amount of investment. You need three promoters to register a PLC. Each promoter must be over 20 years old, be available to sign any documents and all must hold at least one share in the company. Once the registration is complete, the promoter may sell any stock they have. Company registration costs 500 Baht per 100,000 Baht of registered capital, the minimum being 5,000 Baht and the maximum 250,000 Baht. A Memorandum of Association must also be drawn up.
Consider All the Factors
There are a lot of factors to consider when expanding into another country and Thailand is no different. Have you wondered about the average time it takes to set up a business in Thailand? Immigration procedures? How about the average cost of renting office space in Thailand? You can click here to see how much Servcorp’s virtual office spaces can cost http://www.servcorp.co.th/th/virtual-offices/ as an example. There are also all the administrative things like opening bank accounts, hiring staff, Thai labour laws and taxation and social security systems in Thailand to consider. As well as all of these factors, there are linguistic and cultural issues to consider. You’ll need to hire people who can speak with you in English and also with your customer base in Thai. Will you need to pay bilingual staff a higher rate than usual?
Don’t Go It Alone!
As with any expansion, you can’t do it all alone. You’ll have to run your domestic business too after all. You need to have a dedicated, reliable team of staff both local Thai people and staff familiar with your own culture your existing business practices to get your new branch up and running. If you put the time and effort into the planning, research and execution of your Thai expansion, then there’s no reason why you can’t succeed.