Thailand has demonstrated economic resilience despite its history of political and economic upheaval, with business taking a ‘business as usual’ approach. Thailand’s economy is heavily export dependent, with exports accounting for more than two-thirds of the country’s Gross Domestic Product (GDP).

Robust overseas demand for its exports, sizable public investments and increased tourism are expected to support continued improvement in economic growth and demand for imports, although business confidence levels and investment timing may be dented by uncertainty around the timing of a general election.

Austrade focuses on opportunities for Australian businesses in the Thai market, especially those influenced by the following major trends:

• Increasing tourism and consumer affluence leading to greater demand for premium food, quality goods and services.
• The country’s ongoing position as a regional manufacturing hub particularly in automotive, electronics and food processing.
• Transformation of traditional industries through greater use of technology
• Greater focus and awareness in sustainability and the environment.
• Growth of Thai businesses in trade and investment into ASEAN and beyond.
• Greater urbanisation leading to demand of more and better infrastructure and transport projects
• The Eastern Economic Corridor (EEC) Development Plan under scheme of Thailand 4.0

Australia’s trade and economic relationship with Thailand has grown strong since the Thailand-Australia Free Trade Agreement (TAFTA) came into effect in 2005. TAFTA provides tariff advantages over European and North American competitors and allows many Australian companies to find new export opportunities.

Business culture

Relationship building is an essential factor if you are to succeed in doing business in Thailand. Thais will generally expect to spend time building a relationship with their business contacts before they will exchange detailed information or commit to a deal. It is common to begin or wrap up business meetings with informal conversations. Your Thai counterparts may ask questions about your home town, family and educational background in order to build familiarity with you.

In general, Thai business people tend to follow a western, formal dress code. In business meetings a business shirt, tie and proper footwear is essential for men. Formal dress codes applies for women also. Casual wear should not be worn to business meetings.

Khun (pronounced khoon, as in cook) is Thai for Mr, Mrs, Ms or Miss. When addressing others, Thais use Khun followed by a person’s first (given) name. For example: Khun Somporn, Khun Mallee, or in a Western context Khun John (rather than Khun Smith). Most Thais also have a nickname, which may be used in place of their given name.

The exchange of gifts is widely practiced in business dealings in Thailand and should be reciprocated. Gifts are given to those visited for the first time and signify friendship and an appreciation of hospitality. Gifts are opened in privacy, not when received. Gifts do not need to be expensive but a generosity of spirit will help build a strong relationship with your partners.

Note: care should be taken when giving gifts that they are relatively modest and proportionate to the occasion. Expensive gifts may constitute an offence if given unnecessarily and with the intention to obtain or retain business or a business advantage.

Australian businesses should familiarise themselves with anti-bribery legislation. If the person is a Foreign Public Official (FPO) this act may be an offence under Australia’s anti-bribery legislation.

Setting up in Market

We strongly suggest that you seek professional legal and accounting advice prior to establishing a business in Thailand.

In many cases, a foreign entity cannot own more than 49 per cent of the enterprise, with the majority owned by Thais. However, exceptions for majority foreign ownership exist for certain types of industries and are often granted for projects approved by the Thai Board of Investment .

The Thai Board of Investment provides more detailed information about establishing a business in Thailand. Professional service firms also offer their own guides to setting up and doing business in Thailand.

Banking and Finance

There are 14 Thai commercial banks and 11 foreign banks in Thailand. In general, only Head Office branches of local banks are able to open bank accounts for foreign businesses. Documentation requirements to open or make changes to accounts are onerous and time consuming when compared to Australian practices.

In general, the basic accounting principles practiced in the United States are accepted in Thailand, as are accounting methods and conventions sanctioned by law. Auditing practices conforming to international standards are, for the most part, recognised and practiced by authorised auditors in Thailand.

Information on accounting and financial reporting requirements for a business in Thailand is available in English from the Board of Investment.

Intellectual property protection

As part of a market entry strategy, Australian companies should do an intellectual property (IP) audit and be acquainted with how best to protect their IP rights in Thailand. For more information visit the IP Australia Thailand page.

E-commerce in Thailand: A guide for Australian business

E-commerce in Thailand: A Guide for Australian Business offers practical advice, facts and insights on how Thailand’s e-commerce marketplaces work and how to access them.

Access the e-commerce guide