Guidance

Exporting to Thailand

Updated 10 February 2015

This guidance was withdrawn on 31 October 2019

Department for International Trade withdrew this publication because it was out of date.

See current information to:

• explore opportunities for exporting to Thailand in our country guide on great.gov.uk
• learn about changes for UK exporters to Thailand if the UK leaves the EU without a deal
• find out how UK organisations can manage risk when doing business in Thailand

Brexit

Learn about changes for UK exporters to Thailand if the UK leaves the EU without a deal.

Managing risk

Find out how UK companies can control risks when doing business in Thailand.

Export opportunities and advice

Find more export advice and explore opportunities overseas on great.gov.uk.

1. Overview

Thailand is the second largest economy in the Association of Southeast Asian Nations (ASEAN), accounting for 17% of ASEAN Gross Domestic Product (GDP).

Contact a Department for International Trade (DIT) Thailand export adviser for a free consultation if you’re interested in exporting to Thailand.

Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Thailand.

The UK is one of the leading European Union (EU) investors in Thailand with UK companies operating across the Thai economy. The rewards of doing business in Thailand can be considerable, but it takes time to develop the necessary business relationships.

UK investors include BG, Tesco (their largest overseas operation), HSBC, Standard Chartered, Triumph Motorcycles and Prudential.

Thailand is home to over 50,000 British residents.

Benefits to UK businesses exporting to Thailand include:

• growing affluent middle class
• well-developed infrastructure
• ranked in top 20% of countries listed in the World Bank’s ‘Ease of Doing Business Survey’
• government’s pro-investment policies
• hub for accessing opportunities in Greater Mekong sub-region, including Laos, Cambodia, Myanmar (Burma) and southern China

Strengths of the Thai market include:

• 50% of the world’s population within a 5 hour flight
• comprehensive infrastructure investment plan
• modern industrial estates and incentives available from the Thailand Board of Investment (BOI)

2. Challenges

Challenges of doing business in Thailand include:

• mid-ranking in Corruption Perceptions Index
• poor Intellectual Property Rights (IPR) enforcement
• foreign ownership restrictions in some sectors, especially services
• complex customs requirements
• low unemployment reduces availability of highly-skilled staff

You should ensure you take the necessary steps to comply with the requirements of the UK Bribery Act.

3. Growth potential

3.1 Economic growth

Thailand is the world’s 29th largest economy with a GDP of USD 388 billion. GDP growth averaged 4.1% between 2000 and 2013, according to HSBC.

The Thai economy is predicted to grow 3.5 to 4.6% in 2015, fuelled by the government’s infrastructure investment plans.

Thai GDP is made up of:

• manufacturing – 44%
• communication and transport – 12%
• agriculture – 10%
• hotel and restaurant – 5%
• finance – 5%

3.2 ASEAN

ASEAN is considerably larger than the EU and with 600 million residents is an increasingly important economic region.

It’s predicted that the ASEAN economy will become the fourth largest single market by 2030. An additional 300 million residents from the region will also enter the middle class.

3.3 Free Trade Agreements (FTAs]

EU-Thailand negotiations for a FTA were postponed following the 22 May 2014 military intervention.

Thailand has entered into a number of bilateral and ASEAN Free Trade Agreements. Details are available from the Department of Trade Negotiations.

4. Trade between UK and Thailand

UK goods exports to Thailand were valued at £1.96 billion in 2013 making Thailand the UK’s 29th largest export market. Services exports totalled £708 million in 2013.

Top UK goods exports to Thailand 2013:

• iron and steel
• road vehicles
• electrical machinery
• power generating machinery and equipment
• medicinal and pharmaceutical
• specialised machinery
• general industrial machinery
• non-metallic mineral manufactures
• photographic and optical goods
• beverages

5. Opportunities for UK businesses in Thailand

Department for International Trade (DIT) provides free international export sales leads from its worldwide network. Search for export opportunities.

5.1 Transport and infrastructure

Thailand plans to invest £66 billion between 2015 and 2022 in strategic infrastructure projects. Projects include:

• 3 new double track train lines
• upgrading national rail network with double tracking and expansion of the Bangkok mass-transit system
• airport and port expansion projects
• road and bridge upgrades
• water management and flood prevention

There are opportunities for UK companies in the following areas:

• project management
• consulting engineering
• design
• operation
• specialist innovative technology

Contact Trade and Investment Manager attakorn.saropala@fco.gov.uk for more information on transport and infrastructure opportunities.

5.2 Agri-business and food and drink

Thailand offers significant opportunities for UK companies due to:

• growing tourism
• developing hotel and catering sector
• increasing middle-class disposable income
• large number of international residents
• need for more sophisticated technology in agribusiness sector

There are opportunities for UK companies in:

• pig genetics and breeding
• animal feed
• innovative technology and products
• British beef and lamb exports (once lifting of BSE ban confirmed)
• organic and healthy food products
• confectionary
• premium made in UK food and drink products
• food packaging and processing equipment

Contact Trade and Investment Manager thanatcha.laohakul@fco.gov.uk for more information on agri-business and food and drink opportunities.

5.3 Retail and consumer goods

Thailand, and especially Bangkok, is witnessing a massive retail boom. New shopping malls and retail concepts are opening across the country and there is substantial demand for quality international products.

Large retail groups are already home to leading British brands and have major investment plans.

Opportunities for UK companies include:

• new British brands (franchise or direct entry)
• clothing
• footwear
• personal care, including cosmetics
• giftware

Contact Trade and Investment Manager thanatcha.laohakul@fco.gov.uk for more information on retail and consumer goods opportunities.

5.4 Power and renewable energy

55% of total energy consumption is imported and the deficit is growing.

Thailand’s ‘energy masterplan’ aims to provide 25% of total energy consumption from renewable sources by 2022. The Ministry of Energy is offering incentives for renewable energy in the form of Feed-in-Tariff (FIT) schemes. The BOI also offers a range of incentives for investment in renewable energy sector.

There are opportunities for UK companies in:

• waste to energy
• biomass and biogas
• innovative technologies
• advisory services

Contact Trade and Investment Manager asa.chotchakornpant@fco.gov.uk for more information on power and renewable energy opportunities.

5.5 Education and skills

Thailand is positioning itself as the logistical hub for ASEAN. Many international companies have made Thailand their ASEAN hub stimulating demand for skilled English language speaking employees.

The Ministry of Education plans to enhance vocational education and is receptive to collaborating with overseas delivery partners. Thailand needs the relevant skills to become a high value manufacturing economy so there’s a need to increase student numbers and provide higher quality vocational training.

There are opportunities for UK companies in:

• English language provision
• education products and services
• private schools
• vocational training

Contact Trade and Investment Manager asa.chotchakornpant@fco.gov.uk for more information on education and skills opportunities.

5.6 Engineering

The engineering sector plays an important role in supporting the Thai manufacturing sector, which accounts for almost 40% of Thailand’s GDP.

There are opportunities for UK companies in:

• manufacture and assembly of machinery
• components and parts for the automotive and general engineering sectors

Contact Trade and Investment Manager attakorn.saropala@fco.gov.uk for more information on engineering opportunities.

5.7 Pharmaceutical and healthcare

Thailand is a leading medical tourism hub. It’s healthcare and pharmaceutical sector continues to grow offering opportunities for new products and services.

Thailand imports 70% of medical devices from overseas.

There are opportunities for UK companies in:

• medical equipment and devices
• specialist treatment/technology
• hospital standard certification
• diagnostic equipment
• e-health
• elderly care equipment/technology and carer training

Contact Trade and Investment Manager nipapat.hamilton@fco.gov.uk for more information on pharmaceutical and healthcare opportunities.

5.8 Information and Communications Technology (ICT)

The new Thai government is moving ahead with a programme to speed up the development of the digital economy. Digital penetration is increasing in Thailand with:

• increasing use of mobile phones, internet and social media
• auction of 4G licences in mid-2016
• TV going digital
• 24 free-to-air channels with 24 more to be added in 2016 (watched by 83% of Thailand’s TV audience)

There are emerging opportunities for UK companies in:

• TV content
• e-commerce related technologies
• information technology infrastructure, such as high-capacity broadband, data centres and digital gateways
• verification systems to identify individuals online
• cyber security

Contact Trade and Investment Manager nipapat.hamilton@fco.gov.uk for more information on ICT opportunities.

6. Start-up considerations

Most UK companies successfully doing business in Thailand have local representation. This is either through appointing agents/distributors or by establishing their own offices.

After pricing, technical support is the most important issue for prospective Thai buyers. A local presence demonstrates companies are serious about the market and willing to provide local technical support to partners and customers.

UK companies can approach the Thai market in several ways, including:

• direct exports
• appointing an agent or distributor
• partnering with a franchisee
• forming a joint venture
• setting up a local representative office, regional office or regional operating headquarters

You should conduct due diligence and seek legal advice once you’ve identified your mode of entry into the market.

7. Legal considerations

Companies wanting a permanent presence in Thailand must set up a legal entity that is compliant with Thai legal and tax requirements. The Foreign Business Act (FBA) 1999 imposes restrictions on 43 categories of business according to a classification under 3 schedules:

Schedule 1 business are open to 49% foreign ownership without a license. It is not possible to have majority foreign control of a business in Schedule 1.

Schedule 2 activities allow 49% foreign ownership without a license, and 60 to 75% foreign ownership with Cabinet permission provided that two third’s of the directors are Thai.

Schedule 3 activities allow 49% foreign ownership without a license and up to 100% foreign ownership with a Ministry of Commerce licence.

In addition to the FBA there are several industry specific pieces of legislation governing banking and financial institutions; general and life insurance; insurance brokerages; securities and telecommunications.

The BOI has power to grant permission for majority foreign ownership of a List 2 or 3 business, if the business activity is eligible for promotion under BOI rules.

Contact the DIT team in Thailand to help find tax and legal advisers before entering into agreements.

7.1 Standards and technical regulations

The Thai Industrial Standard Institute (TISI) has responsibility for standards.

The labelling of products in Thailand is regulated by the Consumer Protection Act BE 2522 (1979).

Labels on controlled goods must feature:

• name or trademark of the manufacturer or importer
• place of manufacture or the place of operating import business
• statements indicating the nature of the goods
• name of the manufacturing country, in the case of imported goods
• price, quantity, usage, recommendations, caution and expiry date

Contact the Office of the Consumer Protection Board for more information on labelling in Thailand.

7.2 Intellectual Property (IP)

Thailand is a member of the World Trade Organization (WTO).

The Department of Intellectual Property (DIP) has responsibility for IP.

Contact the Foreign and Commonwealth’s (FCO’s) IP lead for south east Asia, Christabel Koh based at the British High Commission Singapore for advice on IP matters.

8. Tax and customs considerations

Thailand and the UK have signed a Double Taxation Agreement.

8.1 Value Added Tax (VAT)

The current VAT rate is 7%.

8.2 Corporate Income Tax

Companies incorporated in Thailand are subject to corporate income tax on worldwide income, gains and profits.

A foreign company with a branch in Thailand is subject only to income, gains and profits arising from business carried on in Thailand.

The standard rate of corporate income is 20%. Some industries are subject to a separate taxation regime.

8.3 Income tax

The Revenue Department of Thailand provides details of personal income tax rates.

8.4 Customs

The Thai Customs Department has responsibility for customs issues.

A number of goods entering Thailand are subject to import controls. The Customs Department provides more information on restricted goods.

As a member of ASEAN Thailand is subject to the agreed import duty reduction plan applying to trade between all the ASEAN countries.

You can find more about import tariffs in the Market Access Database.

9. Business behaviour

Use of English is widespread among larger Thai companies, but proficiency is low among Small and Medium Enterprises (SMEs).

You should:

• never sit in a position where your feet are stretched out in the direction of a Buddha image
• take age, seniority and rank seriously
• use ‘Khun’ as the formal term of address followed by the first name
• always give government officials and VIPs a gift if they are the guests of honour at an official event
• avoid pointing with your finger at a person, or snapping your fingers
• never point your foot at a person or an object
• never sit with your feet up against parts of furniture
• have the reverse of your business card translated into Thai

10. Entry requirements

You can enter Thailand for 30 days without a visa via a visa exemption. You cannot extend your stay beyond this.

If you plan to stay in Thailand for longer than 30 days, or you intend to work, you must get a visa before you travel. Contact the Royal Thai Embassy to obtain a visa.

10.1 Travel Advice

If you’re travelling to Thailand for business, check the FCO travel advice beforehand.

11. Contacts

Contact the DIT team in Thailand for more information and advice on opportunities for doing business in Thailand.