As the second largest economy of Southeast Asia, Thailand ranks 27 out of 190 economies (based on the data shared by the World Bank) in the ‘Ease of Doing Business Index’. Thereby making it a booming market for attracting foreign direct investment. The data released by the Reserve Bank of India states that there was an overall investment of more than USD 15 million in FY 2018-2019; especially in the Tourism sector. As a result of which, the broader field of tourism, i.e., Hospitality, is increasingly witnessing more investments from foreign participants.
Lucrative investment opportunity for Indians in the Hospitality Industry of Thailand
In 2018, Thailand witnessed 38.27 million tourist arrivals and is expected to rise to 41 million in 2019. The National Economic and Social Development Council affirmed that Tourism contributed to 18.4% of Thailand’s GDP; depicting a 14.2% rise since 2014.
Further, it has witnessed a huge surge in the number of Indian Tourists and recorded an increase in 14.24 percentage of tourist arrivals from India (January 2018- July 2018) generating a revenue of approximately 41,771 million. Due to the increasing popularity of Thailand as the preferred destination among Indians, it is simultaneously generating interest as a viable business destination as well.
Considering that Thailand’s economic outlook is steadily advancing with tourism being one of the major catalysts for growth; starting a hospitality business in Thailand seems like the ideal choice for most Indian Investors.
Requirements to deal in the Hospitality Industry of Thailand (Hotels and Restaurants)
- Minimum capital requirement – TBH 3 million
- Appointing a Thai Director
- Reserving the business name and choosing the company location
- Registering the company with the Ministry of Commerce
- Opening a Bank Account
- VAT, TAX and Social Security Registration
- Social Security registration
- Applying for the Licenses depending on the space and the activities which the company wishes to carry out. The various types of License include:
- Restaurant License (Applicable if space is more than sq. m. 200)
- Certificate of Notice (Applicable if space is less than sq. m. 200)
- Alcohol/Liquor License (If the restaurant is planning to serve liquor in its premises) (The license needs to be renewed on an Annual Basis)
- HACCP Certification (If the business owner is planning to serve Halal food products and use its logo there is a mandatory requirement to get it certified from The Halal Standard Institute of Thailand)
- Food License
- Manufacturing License
- Import License
- Construction Permit
- Acquiring Work Permit
Things To Remember
- If the Investor wishes to start a hotel business in Thailand, there will be a different set of Licenses which the company needs to apply. The License fees vary as per the activity the Hotel caters to ranging from Hotel Business, Seminar or Conference Halls, Entertainment Business etc.
- If the Investor is planning to open a Hotel having minimum 100 rooms do not require a Local Partner holding 51% shares of the company as it will be incorporated through BOI Approval and shall invest minimum THB 500 million which should not include the cost of land and working capital.
- Incorporating a Thai Limited Company in which 51% of the Shares are held by a Local Thai National as per the laws.
Maintaining a Thai Limited Company
Doing business in Thailand comes with its own set of mandatory compliances, i.e., filing monthly corporate withholding tax returns, monthly VAT returns, Payroll services, registering the employees and filing the Social Security Contribution, Annual Auditing and Filing Annual Returns for the company. Indian Investors who wish to recruit foreign employees need to stay compliant within the specifications of the Work Permit.
Considering the variable compliances that need to be catered to while investing in the hospitality business in Thailand, we request you to get in touch with us at info(at)skpatodia.in for more information on Incorporation and Post Incorporation requirements.
Yes! I’m Interested in Registering a Company in Thailand – Please Guide
