Can a Foreigner Start a Business in Thailand
Can a Foreigner Start a Small Business in Thailand?
Yes, a foreigner can open a small business in Thailand, but with restrictions. The main rule: at least 51% of shares in a Thai company must be owned by Thai citizens. Exceptions exist for BOI projects, international companies, and certain types of business, but in most cases you can’t avoid having Thai partners.
Why the restrictions exist
Thailand protects its domestic market. Under the Foreign Business Act, many activities are reserved for Thai nationals: retail trade, beauty salons, taxis, street vending. This is not accidental but part of state policy: the country wants foreign investment to flow into large projects rather than squeezing out local small businesses.
How foreigners usually start a business
The most common path is registering a company with Thai partners:
Often Thai partners are nominal: lawyers or acquaintances who don’t interfere in daily operations. But legally, they are majority owners. That’s why it is crucial to draft shareholder agreements properly.
- Minimum of 3 founders
- 51% for Thais, 49% for the foreigner
- Registered capital — from 2 million baht (≈ USD 54,000), if a work visa is required
Often Thai partners are nominal: lawyers or acquaintances who don’t interfere in daily operations. But legally, they are majority owners. That’s why it is crucial to draft shareholder agreements properly.
Options for small businesses
Cafés and Restaurants
A foreigner can open a restaurant, but officially — only through a company with Thai majority ownership. That’s why many expat-favorite cafés in Pattaya and Phuket are legally owned by Thais, while the foreigner acts as manager.
Hotels and Guesthouses
Small hotels and hostels also require Thai partners. For a full-scale hotel, a license is needed, and the process may take up to a year.
Online Business
If you work online (IT, marketing, consulting), it’s easiest to register a company just to obtain a work visa. In practice, such businesses don’t compete with locals, so the government is more relaxed here.
Property Management
Foreigners often open real estate agencies or rental management companies. Formally, Thai majority ownership is still required, but the market is flexible: many agencies in Pattaya operate under this scheme.
A foreigner can open a restaurant, but officially — only through a company with Thai majority ownership. That’s why many expat-favorite cafés in Pattaya and Phuket are legally owned by Thais, while the foreigner acts as manager.
Hotels and Guesthouses
Small hotels and hostels also require Thai partners. For a full-scale hotel, a license is needed, and the process may take up to a year.
Online Business
If you work online (IT, marketing, consulting), it’s easiest to register a company just to obtain a work visa. In practice, such businesses don’t compete with locals, so the government is more relaxed here.
Property Management
Foreigners often open real estate agencies or rental management companies. Formally, Thai majority ownership is still required, but the market is flexible: many agencies in Pattaya operate under this scheme.
Exceptions
There are areas where a foreigner may own 100% of a company:
BOI provides incentives and tax breaks, but requires strict compliance: investment size, job creation, and technology transfer.
- Businesses approved by the BOI (Board of Investment)
- International schools and medical clinics
- Certain export and IT projects
BOI provides incentives and tax breaks, but requires strict compliance: investment size, job creation, and technology transfer.
Work visa and taxes
If you open a company and want to work in it yourself, you’ll need a work visa and permit. Condition: for every foreign employee, there must be four Thai staff members. This rule applies to small businesses and often becomes a bottleneck.
Taxes in Thailand for companies:
Taxes in Thailand for companies:
- Corporate income tax: 20%
- VAT: 7%
- Personal income tax on employee salaries (progressive scale)
Real-life example
A Russian couple opened a coffee shop in Pattaya, near the beach. Legally, 51% of the business is registered to a Thai partner, who also acts as the accountant.
For comparison: in Russia, a café with this foot traffic would face high taxes and rent, while in Thailand, the business model is more sustainable.
Important: profitability depends on the format.
- Revenue: about 900,000–1,000,000 baht per month (≈ USD 24,000–27,000)
- Expenses: rent, staff salaries, coffee beans, desserts, utilities — around 650,000–700,000 baht
- Net profit: 200,000–250,000 baht (≈ USD 5,400–6,750) monthly
For comparison: in Russia, a café with this foot traffic would face high taxes and rent, while in Thailand, the business model is more sustainable.
Important: profitability depends on the format.
- A small family-style café with 2–3 tables earns about 100,000 baht.
- A spot by the beach or in a mall can make up to 300,000 baht.
- Restaurants or bars in central Pattaya sometimes clear 500,000 baht, but entry costs are much higher.
FAQs
Can I open a business solely in my name without Thais?
No, except for BOI projects and rare exceptions.
How is the majority share issue solved?
Through shareholder agreements and proxies. But legally, Thais remain majority owners.
What if I just rent out an apartment?
That’s not considered a business. Income is taxed as personal income.
Can I buy an existing business?
Yes, but the scheme is the same: through a company with Thai partners.
No, except for BOI projects and rare exceptions.
How is the majority share issue solved?
Through shareholder agreements and proxies. But legally, Thais remain majority owners.
What if I just rent out an apartment?
That’s not considered a business. Income is taxed as personal income.
Can I buy an existing business?
Yes, but the scheme is the same: through a company with Thai partners.
Bottom line
A foreigner can start a small business in Thailand, but must follow the rules: Thai majority ownership, registered capital, and work visas. In reality, it works: hundreds of cafés, agencies, and services in Pattaya and Phuket are run by foreigners. But entering the market requires preparation and reliable legal support.