Expand business to Thailand? Here are 7 legal requirements to notice
Expand business to a new region, business owners might pay much attention to other aspects such as the market overview, local trends and logistics providers for the business and might forget to understand the region’s legal requirements.
> Read more: Must-have checklists to start E-commerce in Thailand.
> Read more: Ecommerce business in Thailand: Critical success factors to notice 2021
>> Read more: Top e-commerce trends in Thailand post Covid-19 ( 2021 edition)
Do not forget that, in order to establish e-commerce business in any part of the country, one needs to encompass varied rules and regulations followed by a particular territory.
So what are the most essential Thailand’s legal requirements to notice? In this article, Boxme will help you to have a better grasp of it.
7 Thailand’s legal requirements for opening new business
As the digital economy is thriving in Thailand, the country provides a lifetime opportunity to expand online and offline business in Thailand. However, there are certain regulations and legal requirements the government set which business owners should carefully review and apply when expanding business in Thailand. This is true particularly with respect to these aspects:
Corporate structure
Registration – The first and foremost step is to get your company registered as a business via electronic medium.
License – Under the foreign business license act, it’s necessary for the foreign majority shareholders to get authorized, terms, and conditions applied.
Board of Investment (BOI): promotional techniques, if the marketplace is BOI promoted, products and services would be provided by several third parties. By processing such transactions, the marketplace operator generates revenue from transactions, neither procure tax holidays nor merit-based incentives but authorizes 100% land possession to carry on the promoted activities.
Electronic License
An e-commerce business license is compulsory for any business. Once the business is opened, the owner has to apply for a license within 30 days.
If the website or social media page of the business has already listed payment process and pricing details. These websites can be considered as e-commerce web.
>> Read more: Popular Selling Channel in Thailand
>> Read more: The most popular E-commerce platforms in Thailand
For the e-commerce website, e-payment and cashless payment on the website must be undertaken by an authorized third party or organizations that are compliant with specific security requirements. Once in a while, the central bank of Thailand also known as Bank of Thailand will be responsible for enforcing increasingly tighter controls on e-commerce providers, to ensure that they are compliant.
OCPB registration
It is compulsory for all e-commerce businesses to register with the Office of the Consumer Protection Board (OCPB) as a direct sale business. This to ensure the consumer’s rights are protected under Thailand’s authorized organization. All e-transactions being conducted in the e-commerce website are being carefully examined annually to prevent any internet fraud, scam and privacy leakage.
Under the new legal requirements of e-payment law, each financial institution will be required to report transactions of customer accounts that receive either more than 3,000 money transfers a year or at least 400 money transfers with a total value of at least THB 2 million a year to Thailand’s Revenue Department.
Payment systems
PromptPat supports electronic payment via mobile number or Thai Identification card number.
Standardized QR codes allow distinct modes of payment which constitute a visa, Mastercard, or UnionPay.
Alipay, Apple Pay, and Cryptocurrencies are widely used as one of the payment systems.
>> Read more: E-commerce logistics in Thailand: Shipping and Payment
>> Read more: Must-have checklists to start E-commerce in Thailand.
Legal Acquiescence
Several commercial and civil agreements and codes are to be conceded under
- Electrical transaction act(ETA)
- Consumer Protection Act
- The electronic transactions development agency(ETDA)
- Computer crime act
- National Broadcasting and Telecommunications Commission
These are needed to be followed while expanding business digitally in Thailand.
Legal requirements: Tax
E-commerce business is not limited within the region but all over the world. Customers can be found in any place on the globe. Payment systems are typically located abroad. Tax advantages and lower regulated jurisdictions can be found outside of Thailand as well. Therefore, for a cross-border e-commerce business, the biggest competitive advantage is the attractive benefits.
The best solution is An affiliated company in an offshore jurisdiction, which can help to create a tax-efficient and most profitable business solution.
VAT
Under the Thai’s legal requirements of tax system, the export of goods and services has nearly a zero percent VAT rate.
Legal requirements like custom clearance reports make it hard to take the benefit of the 0% tax rate.
Visa/Work permit:
A foreigner working online while being physically in Thailand needs a work permit. The standard rules and regulations apply without privileges for online workers who are focused on non-Thai customers or the foreign headquarters as the only client. “Just doing things discreetly” is pragmatic, but is not – and has never been – a legal solution.
Even foreigners who run their businesses physically in Thailand need work authorization.
Standardized rules and regulations are mainly focused on non-Thai customers or foreign headquarters as their clients.
Thailand is convenient for e-commerce businesses. However, several legal requirements are mandatory to be taken care of. Also, Bangkok law firm provides comprehensive consultants and support to avoid misinterpreting any legal facets.
More readings?
>> Read more: Thailand: One of the most potential e-commerce countries in SEA
>> Read more: Ecommerce business in Thailand: Critical success factors to notice 2021
>> Read more: Top e-commerce trends in Thailand post Covid-19 ( 2021 edition)
>> Read more: Seize the E-commerce opportunity in Thailand
Must-have checklists to start E-commerce in Thailand.
Expanding business to new markets is not as difficult as before. However, each market has different consumption culture, both popular products and the way to reach customers in those markets are different. If a business wants to start an E-commerce business in a new market, it is necessary to learn the culture and popularity of customers and consumers in the market.
Learn market to start E-commerce in Thailand
Top product category in Thailand
Nowadays, Thai people are more likely to take care of their health and those around them. In recent years, health and beauty products are more popular and along with the saving-world trend, both of these trends are the result of the COVID-19 epidemic.
And according to the fact that many people decided to live at home rather than to do outdoor activities, result in paying more attention to home decoration, at one point, plants and home accessories were very popular. Moreover, there are actors and public influencers showing their lifestyle at accomadation, thus being a major spark for this trend.
Although at present, the epidemic situation in Thailand is much better but Thais still pay more attention to health products and home appliances. Another effect of quarantine at home for a long time and after the COVID situation began to loosen, outdoor activities have become gotten a lot of attention again. Popular outdoor activities are activities that they can do on their own or with a small group of people, such as going to an art gallery or skateboarding.
Popular Selling Channel
Top e-commerce trends in Thailand post Covid-19 ( 2021 edition)
Early in the year 2019, the international pandemic Covid-19 took the world by storm and completely changed the world’s trajectory. The global economy was hit hard by the pandemic. As long as other countries, Thailand business has suffered from a great loss of revenue and customers in various aspects such as tourism, retail e-commerce. The e-commerce trends in Thailand have consequently been changed in order to adapt to the current situation.
>> Read more: How popular 11.11 campaign with TOP 3 marketplaces in Thailand |records 2020
>> Read more: Boxme supports foreign sellers enter Thailand’s E-commerce market
Back when we were in quarantine, e-commerce had become mainstream for Thai. Social shopping platforms such as Shopee, Lazada, JD Central, and Alibaba have taken the center stage. Many traditional retailers had to adopt the idea to continue their business.
>> Read more:The most popular E-commerce platforms in Thailand
In this article, Boxme will give you detailed, top e-commerce trends in Thailand to notice in 2021.
Shifting in customer buying behavior
At the beginning of the year 2020, Thailand marked their first case of Covid and continues to increase more. Consequently, the lockdown policies had been placed all over Thailand. During this time, people were encouraged to stay at home. Users have been spending more time on social media platforms. The numbers impacting the eCommerce and social commerce landscape significantly increased on a global scale.
According to insights by Hootsuite in April 2020, 74% of users aged 16 to 64 report having purchased a product on the web. Thailand ranked #9 worldwide in eCommerce’s share of total sales transactions at 10%. During the COVID-19 outbreak, an average of 47% of the global sample spends more time shopping online in recent weeks.
>> Read more: Ecommerce business in Thailand: Critical success factors to notice 2021
As reported from the Bangkok Post, from mid-March till mid-April, Lazada struck 100% sales in Thailand. The amount of on-time screen increases around 11% compared to before lockdown Lazada Thailand expects eCommerce to become a norm in the new normal.
At the end of the day, during the pandemic, online shopping has become a new trend and gradually become a habit for Thailand thanks to its convenience. Even after the pandemic, e-commerce and online shopping still retain the popularity among Thailand shoppers.
>>> Read more: The most popular E-commerce platforms in Thailand
Changing sectors
Thailand is one of the most visited countries in the world, without a doubt, the most popular categories in Thailand are travel and accommodation, amounting to $6.12 billion in 2019.
Covid kicks in and the category has been gradually replaced, travel and accommodation fall down to the least used category and have been taken over by food and personal care at the rate of 21%, being the fastest growing sector by far.
>> Read more: Changing Thai social values in 2020 that results in 2021
With travel restrictions enacted worldwide, tourism suffered a 92% shrinkage in eCommerce transactions. On the contract, other DIY, home furnishes thrive at the rate over 120%.
Thailand is conscious of health problems, Health related products, medicine, hygiene products flourish at +8,000% as people stocked up on these products.
>> Read more: Popular Selling Channel in Thailand
>> Read more: 3 HOT product categories in Thailand 2021
According to Hootsuite, Thailand also witnessed a significant increase in global eCommerce interests for food & groceries, household essentials, and personal care products.
The buying top e-commerce trends in Thailand among consumers still fluctuate during this chaotic time. It would be fascinating to witness the swift in purchasing selection in the new normal.
Top e-commerce trends in Thailand: Going Cashless
Since the distance policy has been executed, deliveries or any contacts are required to keep the distance within 2 meter. These measures also encourage customers to use credit cards instead of cash to avoid the transfer and spread of viruses.
>> Read more: The Ultimate Guide to Thailand E-Commerce Market
>> Read more: The Ultimate Guide to Thailand E-Commerce Market
Furthermore, alongside smartphone penetration, is the fast growth of e-wallet. Digital wallets are currently used to pay for 23 percent of e-commerce transactions, tying with bank transfers. E-wallet payments also grow at a certain rate with many promotions, discount vouchers on e-commerce marketplaces.
The use of e-wallet and cashless payment is predicted to further grow in 2021 with the rate of 18% and take up around 28% of Thailand’s payment market.
Popular electronic payments in Thailand are PayPal, TrueMoney and Airpay.
As predicted, top e-commerce trends in Thailand are more and more significant in Southeast Asia, especially in Thailand. Consumers tend to buy things online not just because of certain things that need to be ordered on the Internet, but for the convenience, wide choice and great money value e-commerce can offer.
Read more: Seize the E-commerce opportunity in Thailand
>> Read more: 3 Predictions of the e-Commerce Market in 2021
It is crucial for marketers to keep up with the constant change in customer shopping behavior and top e-commerce trends in Thailand.
Ecommerce business in Thailand: Critical success factors to notice 2021
Among all the competitors in the Southeast Asia market in terms of e-commerce growth, E-commerce business in Thailand is currently thriving as the supreme leader in the SEA region.
>> Read more: Thailand: One of the most potential e-commerce countries in SEA
>> Read more: The Ultimate Guide to Thailand E-Commerce Market
According to the World Bank’s Doing Business Index ranked Thailand as the 27th easiest country to do business in 2019. This is impressively higher than even China, at 46. The purpose of this article is to recognize the critical success factors and investigation on performing the e-commerce business in Thailand.
Credibility of the e-commerce website
As the characteristics of the e-commerce business, where most of the transactions are conducted online. All communication, deals, purchases are on the online platform. Consequently, the credibility of the website has become the highest concern of both customers and business owners, the most critical success factor of e-commerce business in Thailand.
>> Read more:Popular Selling Channel in Thailand
>> Read more: The most popular E-commerce platforms in Thailand
The quickest and most effective solution for this is to outsource to Trustmark issued by accepted institutes such as DBD verified by the Department of Business Development. Apart from acquiring the Trustmark, business can further enhance its credibility by delivering the presentation of the operation, good and service, most important is to include any certificate if it has.
>>> Read more:The Ultimate Guide to Thailand E-Commerce Market
Customer Relationship Management
Unlike brick and mortar business, e-commerce business in Thailand pays much attention to taking care of customers not only during shopping activities but also communication, after sales service, refunds, complaints and feedback.
>>> Read more: HOW TO IMPROVE THE CUSTOMER RETENTION RATE IN E-COMMERCE
These factors are highly cautious due to the limited interaction and communication between the business and customers.
With an impeccable customer relationship, it is believed that the e-commerce business can pave the way among other competitors.
There are some e-commerce businesses in Thailand with exceptional after sales service such as OfficeMate and ReadyPlanet such as 24/7 customer service channel, seminar for customers, online support videos. Such conscientiousness will create a positive impression in customers, in the end, customers are likely to come back to the business.
>>> Read more: Changing Thai social values in 2020 that results in 2021
Online marketing of e-commerce business in Thailand
In the world of digitalization, online marketing is without a doubt a crucial success factor for any business, especially e-commerce ones. Widely known digital marketing tools such as SEM, email, ads,..These tools enable businesses to understand customer’s requirements and approach them effectively.
>>> Read more: 4 Most Popular Marketing Trend in Thailand in 2020
High-security payment channel
E-commerce business in Thailand, the rate of online payment is still lower than cash-on-delivery service. Acknowledging this problem, e-commerce businesses should be thorough and precise with the online payment process, including after sales service including refund can easily encourage customers’s trust and convenience in online purchasing.
>>> Read more: Popular Selling Channel in Thailand
Effective, high-function, and easy-to-use websites
The core of the e-commerce business in Thailand is the website itself. The success factor that sets an e-commerce business apart from others is the website. The target is to deliver a user-friendly, interesting, and attractive interface.
>> Read more: The most popular E-commerce platforms in Thailand
>> Read more: What makes a product that sells when dropshipping on Shopify, Amazon and eBay?
E-commerce business in Thailand owners should make sure the smoothness in swifting alter information, images and price of goods and service. The business must understand the vitality of the website, furthermore having a dedicated team to work on the website maintenance 24/7 to cope with any possible mistakes when occurring. For newly opened e-commerce businesses, we recommend checking out readymade website and other e-commerce websites builders such as Shopify, Woocommerce for lowering the cost.
The website design is another success factor to consider as when the website is unpleasant to look at and difficult to use, eventually causing much inconvenience, browning can easily let the customers down, enhance the bounce rate, and discourage customers from the further business.
On-time and fast delivery
In the time of fast living pace, speed has become another success factor for any business not to mention e-commerce business.
Customers are tired of waiting long for their packages to be delivered. The anxiety of receiving the exact goods at the exact time as they were informed is the biggest mistake any e-commerce business can make. Consequently, the best option suggested for business is to outsource for a local, reliable, and effective fulfillment service that includes picking, pack and deliver products to customers.
>>> Read more:E-commerce logistics in Thailand: Shipping and Payment
There are some crucial success factors that e-commerce business in Thailand starters and owners should pay attention to when starting a new business. For more market insights and detailed guidelines on embarking on new e-commerce businesses online and offline, there are various articles you can have a look at.
