How to start an eCommerce business in Thailand?

In 2021, Thailand is the 26th largest eCommerce market with a revenue of US$8.5 billion in 2021. With an increase of 60% over previous years, eCommerce revenue for Thai businesses continues to grow. New markets are emerging, and existing markets also have potential for development. Global growth will continue in the coming years.

Online eCommerce platforms is an essential distribution channel for products and services, and the trend is growing. The eCommerce professional must have advanced knowledge in new technologies or be surrounded by people who are very competent in these fields (subcontractors or employees). The management of a commercial site requires a great care and an important availability towards the customers. Also, many rules and legal provisions will have to be strictly respected by the professional of eCommerce wishing to settle in Thailand.

An eCommerce company or online business refers to a business model that allows companies to buy and sell goods and services through services to consumers on the Internet.

Creating an eCommerce business requires a certain amount of anticipation and preparation which will be seen in this article. Indeed, the creation of an eCommerce company is not complicated but some steps must be respected. Apart from the traditional steps of creation of a Thai company, the eCommerce company must comply with additional steps and formalities of registration of its activity and its website in order to comply with Thai law.

Prior to the creation of a company in Thailand, it is imperative to proceed to an analysis of the economic activity of the eCommerce company. Indeed, the requests for licenses authorizing the exercise of the eCommerce activity could be strictly regulated by the Thai law. Therefore, it is essential to make a detailed analysis of the company’s activity with a Bangkok lawyer before proceeding to the start of your eCommerce company in Thailand.

Also, the Thai eCommerce company will have to proceed to several formalities of company registration allowing them to obtain an eCommerce license, authorizing them to exercise their activity in Thailand. The application for an eCommerce license must be made through the Internet on the website of the Department of Business Development (DBD) following the launch of the Internet platform. This application must be made within the first thirty days following the beginning of the exercise of the company. This formalism imposed with the DBD requires the registration of the eCommerce platform by in front of the Thai authorities and of which several information must be given by the applicant:

As indicated below, several activities or sale of products require the obtaining of specific licenses or can be the subject of a limitation even prohibition. It is thus imperative to approach a competent law firm in order to proceed to a preliminary analysis on the various authorizations necessary to the exercise of your online business activity in Thailand. The eCommerce activity can be divided into sub-categories as follows:

Marketplace: It is a tripartite model between the seller, the buyer and the operator. The customer in the marketplace system is the seller, the one who represents his products and services in the market while in the traditional system of an eCommerce website is the final buyer.

Drop shipping: It is also a tripartite model. The system of drop shipping consists in choosing a supplier who will allow you not to manage the stocks. The latter will then be responsible for making the delivery.

Domain name registration: It is done with the Thai Network Information Centre Foundation (THNIC). In order to register a domain name for an eCommerce company with the “.co.th” extension, the owner must complete the following THNIC documents:

The registration period of the domain name is relatively long and can extend from six months to one year. However, any company is free to reserve a general domain name with “.com” extension. These websites are of course allowed to sell products or services online through their platform in Thailand.

Trademark registration: Thai law defines a “trademark” as a symbol used in connection with goods to indicate that they are the goods of the trademark owner. The trademark must be “distinctive” and not identical or similar to those registered by others, and must not be prohibited under the Act.

The trademark must be registered with the Department of Intellectual Property. Thus, the owner of the future trademark must fill out an official form in Thai language. Documents required for the registration of the trademark are:

The trademark registration is effective for a period of 10 years from the date of filing the application.

Under Thai company law, a company must be at least 51% owned by a Thai shareholder or shareholders as stated in the 1982 Foreign Business Act. However, foreigners can override this rule and obtain specific licenses (“Foreign Business License”) or a BOI Company License allowing them to obtain 100% foreign business ownership and benefit from tax or non-tax advantages.

E-Commerce activities are part of a favorable investment for foreigners operating in Thailand under the BOI. However, the recent reform has brought a major change for the digital sector and requires a thorough analysis of the company’s business to determine whether the company can benefit from the Board of investment.

The registration of companies is mandatory and must be done at the Ministry of Commerce and more precisely before the Business Development Department (DBD) of the place of residence of the company’s headquarters. The registration of the company must be done within three months after the statutory meeting by the director. If the deadline is exceeded, the statutory meeting will be considered null and void. In the context of the creation of a company, it is important to know, probably at its filing the following elements:

Following the Thailand company registration, this one will also have to proceed to the edition of a book of the shareholders and to give to the shareholders the certificates of shares corresponding to the social shares held by the shareholders.

Following the creation of your company, it is appropriate to register a domain name in Thailand will allow you to build a website. There are several extensions, the most current is “.co.th”. The requirements differ, however in most cases you will need to register the company in Thailand under this name.

One year Business visa: Foreigners are not allowed to work in Thailand unless they have received a Business visa and a work permit. Foreigners who want to work in Thailand must obtain a type of visa that can give right to a work permit. Only B and O non-immigrant visas are eligible for a work permit.

To obtain a work permit in Thailand, the foreigner must make an initial application for a visa, which is called a non-immigrant visa. Obtaining this visa must be done before entering Thailand and obtaining a work permit must be done before starting their activity in Thailand. Thus, once the foreigner has obtained the non-immigration visa, he/she can proceed to apply for the work permit from the Ministry of Labor. Please contact us if you need help with Thailand visa services.

SMART visa: It is a new category of visa that came into effect on February 1, 2018. Its main purpose is to encourage foreigners with high skills to come and work or invest in Thailand.

One of the industrial activities targeted by this type of visa is the digital industry, which therefore includes to eCommerce companies.
The four categories of foreigners who can apply for a SMART visa are:

The benefits and privileges of the SMART visa are significant and include a visa valid for up to four years, a reduced submission to the Thai immigration service to once a year, the possibility of family reunification and the absence of a work permit requirement.