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Starting a small business as a retired expat in Thailand
| Published: | 18 Nov at 6 PM |
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Nowadays, many small business owners in the West are taking early retirement and heading to warmer, less costly shores.
Once the initial novelty of a new country begins to wear off, many new retirees consider starting a new business in order to utilise their knowledge and experience as well as topping up their pensions as a hedge against inflation. A small business enterprise can give new meaning to expat life, but only if the laws of the relevant country are fully understood.
The World Economic Forum’s newly released report on doing business overseas is a must-read for budding expat entrepreneurs, wherever they’re located, as its information is based on careful evaluation of the risks in a good number of popular expat destinations including Thailand. The Southeast Asian nation is a favourite with foreign retirees but starting a business, it seems, is another matter.
As with all businesses across the Pacific and East Asian region, doing business in Thailand is rated as being risky in four different aspects – economic, geopolitical, technological and environmental – as well as in five of the WEF’s top ten risks. Cyber attacks, failure of national government, asset bubbles, profound social instability and man-made environmental catastrophes are all specific threats to Thai businesses, whether large or small.
As a result of the study, Thai agencies are being urged by the government to undertake in-depth analyses of the stated risks as a means of gaining foreign entrepreneurs’ confidence as well as developing ways to cope with and hopefully eliminate these risks. Another major problem for expats wishing to start a new small business is the bureaucratic nightmare unleashed by the idea.
Firstly, no foreigner can own 100 per cent of his Thai business, meaning the business mast be registered by a Thai national who will own 51 per cent as a result. In addition, there are a number of trades prohibited to foreigners as it’s believed work would then be taken away from Thai nationals. Examples include dealing in Thai antiques, publishing a newspaper and farming, and also prohibited are certain activities dependent on the type of business started. As regards costs, Thai limited company registration requires capital of two million baht and a set-up fee of around 7,000 baht unless the foreigner has a Thai wife, in which case the company registration fee is reduced to one million baht.
The correct visa for starting a business is the non-immigrant B, normally only available at a Thai embassy or consulate in the foreigner’s home country. In addition, employing other foreigners is expensive as registered capital is taken into account, with two million baht per foreign national up to a maximum of 10 million for 5 non-Thai employees. Taking the above into account, it’s no surprise that the numbers of expats starting businesses in the country seems to be mostly limited to larger, already established companies needing a local office or retirees married to Thais who’ve provided their spouses with shops, bars and suchlike in order to make money for their families. However attractive the idea of a new small business may be to incoming, retired expatriates, the reality can be very different.
Once the initial novelty of a new country begins to wear off, many new retirees consider starting a new business in order to utilise their knowledge and experience as well as topping up their pensions as a hedge against inflation. A small business enterprise can give new meaning to expat life, but only if the laws of the relevant country are fully understood.
The World Economic Forum’s newly released report on doing business overseas is a must-read for budding expat entrepreneurs, wherever they’re located, as its information is based on careful evaluation of the risks in a good number of popular expat destinations including Thailand. The Southeast Asian nation is a favourite with foreign retirees but starting a business, it seems, is another matter.
As with all businesses across the Pacific and East Asian region, doing business in Thailand is rated as being risky in four different aspects – economic, geopolitical, technological and environmental – as well as in five of the WEF’s top ten risks. Cyber attacks, failure of national government, asset bubbles, profound social instability and man-made environmental catastrophes are all specific threats to Thai businesses, whether large or small.
As a result of the study, Thai agencies are being urged by the government to undertake in-depth analyses of the stated risks as a means of gaining foreign entrepreneurs’ confidence as well as developing ways to cope with and hopefully eliminate these risks. Another major problem for expats wishing to start a new small business is the bureaucratic nightmare unleashed by the idea.
Firstly, no foreigner can own 100 per cent of his Thai business, meaning the business mast be registered by a Thai national who will own 51 per cent as a result. In addition, there are a number of trades prohibited to foreigners as it’s believed work would then be taken away from Thai nationals. Examples include dealing in Thai antiques, publishing a newspaper and farming, and also prohibited are certain activities dependent on the type of business started. As regards costs, Thai limited company registration requires capital of two million baht and a set-up fee of around 7,000 baht unless the foreigner has a Thai wife, in which case the company registration fee is reduced to one million baht.
The correct visa for starting a business is the non-immigrant B, normally only available at a Thai embassy or consulate in the foreigner’s home country. In addition, employing other foreigners is expensive as registered capital is taken into account, with two million baht per foreign national up to a maximum of 10 million for 5 non-Thai employees. Taking the above into account, it’s no surprise that the numbers of expats starting businesses in the country seems to be mostly limited to larger, already established companies needing a local office or retirees married to Thais who’ve provided their spouses with shops, bars and suchlike in order to make money for their families. However attractive the idea of a new small business may be to incoming, retired expatriates, the reality can be very different.
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