Set up a gaming business in Thailand

Thailand’s 32 million gamers helped the Thai games market generate over a billion dollars last year, making it one of Southeast Asia’s most visible game markets.

Although mobile is the most popular gaming platform in Thailand, most gamers also use consoles and PCs. 95 percent of Thailand’s urban online population plays on mobile. Eighty percent of gamers use a PC, while seventy percent use a console. Female gamers are slightly more likely than male gamers to play on mobile, while male gamers are more likely to play on other platforms.

The vast majority of paying gamers spent money on in-game items or virtual goods in the previous six months, which is understandable given the market’s love of free-to-play games across all platforms.

Playable characters are the most commonly purchased item for men, while in-game currencies are the most commonly purchased item for women. In-game currencies are the most commonly purchased item among all players.

When we consider Thailand’s most popular franchises, the popularity of in-game currencies makes sense: In the previous six months, approximately half of Thai gamers played Candy Crush and FIFA. Shooter games, on the other hand, are popular among both boys and girls. Game developers are increasingly looking to Southeast Asia as a growth market.

First of all, the first step to take if you want to invest in the gaming industry is to create your company. As a foreigner, you can only do your business in a sole proprietorship or as an individual worker.
You have two choices. The first is to set up a Thai or foreign private limited company. If the majority of the ownership is foreign, the foreign owner will need to obtain a foreign business license. In addition, there are many requirements for obtaining a foreign business license and the process is very complex. As a result, some foreigners prefer to partner with a Thai national to meet the requirements of the Thai company, the foreigners will only be able to own 49% of the company’s shares.
The second option is the creation of a BOI company. The Board of Investment is a program that helps people open and operate businesses in Thailand. With a BOI company, the ownership does not have to be majority Thai, but can be 100% foreign owned. This type of company has many benefits, mainly tax benefits. The Board of Investment supports and promotes investment incentives for companies in the gaming industry. Digital business which includes the gaming industry is one of the sectors that will easily receive support from the BOI. Moreover, as this field is very current, on September 28, 2021, the BOI issued a notification regarding the modification of business promotion related to the digital industry. Thus, the previous BOI promotion categories for the IT industry (5.7 Software development, 5.8 eCommerce and 5.9 Digital services) have been combined into the new promotion category 5.10 Software, development of platforms for the provision of digital services or digital content.

BOI-promoted companies can benefit from certain tax and non-tax incentives. Such incentives can be particularly attractive to foreign investors who may be subject to much stricter regulations if they conduct business activities in Thailand without obtaining this license. The main benefits offered by the BOI are as follows:

The main tax benefits that the BOI license allows for projects belonging to category 5.10 are the following:

Only revenues from the direct sale of the software service or the developed platform or digital content are eligible for tax exemption. Today, the smartphone has become a tool that people carry everywhere, so it is necessary if you want to develop in the gaming industry to create your mobile application. The BOI is increasingly looking to support the mobile application industry, and is offering even more benefits to foreign investors wishing to create a mobile application for online games.

The BOI license brings many benefits but the application requires certain conditions that can be seen as restrictive for the foreign investor:

In addition, the process can be quite lengthy as the BOI will inform the company of the outcome of the process within 40-90 days of receiving the application. The length of time to respond is generally determined by the amount of the investment value:

This list of documents is not exhaustive as the BOI officer may request any additional documents or exhibits if necessary. The documents required for the BOI application are as follows:

There are essential steps that you must follow to successfully apply for a BOI promotion in the gaming industry:

1) The company must submit application forms obtained in person from BOI headquarters in Bangkok or via BOI’s electronic investment platform along with all other documents.

2) The project is presented to a BOI officer in an interview with the owners of the online gaming company.

3) The application is evaluated. The OIO officer makes a decision within 40-90 days on the outcome of the application.

4) If the application is approved, the company must establish a Thai company within six months after the application is approved. Certain documents must be submitted to the Office of the Board of Investment.

5) The BOI will issue the investment promotion certificate within 10 working days after the company has completed its registration in Thailand. The promotion certificate also includes the rules that the BOI company must follow.

If you decide to start an online business in the gaming industry, there are a few data protection rules that you need to follow. All of these issues are regulated in Thailand, by the Personal Data Protection Act (PDPA). This law regulates all processing of personal data in commercial transactions, including eCommerce. There are a number of rules you must follow:
– Consent: You must not use an individual’s personal data without their consent, whether implied or explicit. The usual way to obtain consent in the eCommerce world is to allow the customer to check the box “I hereby agree to the use of my personal data…”.
– The purpose: You may collect, use and disclose personal data only after you have informed the data subject of the purpose of such data collection activities. You may not collect personal information simply because you have access to it.
– Reasonableness: You should only retain user data if there is a business reason to do so. There must be an explicit business purpose for such collection. This purpose must be considered appropriate by a reasonable person.
– If the data used is to be disclosed to another organization, or to make a decision about the data subject, companies must ensure that all such personal data is accurate and complete.
– Personal data should not be transferred outside Thailand if the jurisdiction to which the data is transferred does not provide legal protections comparable to the PDPA for the data subject.

eCommerce is protected in Thailand under the Electronics Transaction Act, which facilitates the use of electronic technology and controls the operations of companies providing online services and conducting electronic transactions.

A company in Thailand operating one or more websites in the gaming industry for the sale of its products or services must apply for an eCommerce license within 30 days once the company has started its business. The license application must be submitted to the Department of Business Development once the website is operational as the owner of the website will have to provide the following information:

In conclusion, Thailand is a very interesting country to set up in the field of online gaming eCommerce. The best option as a foreigner wishing to invest in the online gaming business is to apply for a BOI since you will be entitled to many advantages that you cannot get when setting up a simple company. In addition, the gaming industry is part of category 5.10, one of the sectors that will easily receive the BOI license.

We also recommend that you make sure that the rules for the protection of the data collected by your company are respected, which are essential and whose violation is severely punished.

Finally, there are certain procedures that you should not omit such as the application for an eCommerce license, in order to guarantee more protection to the users of your platform.