Sabadell International Business
Exporting to Thailand
Opportunities for Spanish companies in Thailand
- A great dynamic Asian economy.
- Income per capita in the intermediate range and growing
- Appropriate setting for doing business.
- Sound banking system in a good position as regards external payments.
- Intense political instability and uncertainty, with adverse effects on the economy.
- The greatest challenge for the country is the peaceful and parliamentary settlement of the antagonism between the rural population and the middle and high-class elite in Bangkok.
- Subsidy policies may endanger the good tax position that Thailand has kept up over recent years.
- Opportunities connected with infrastructures, industrial supplies, chemical products, equipment for the healthcare sector, consumer products and tourism.
- Legal framework of incentives appropriate for direct foreign investment.
- Right to transfer and repatriate in currency.
- There are special economic zones and free industrial zones.
- Thailand and the EU are negotiating a free trade agreement.
- Public plan for investment in new infrastructures.
Banco Sabadell in Thailand
Banco Sabadell’s relations with the Thai banking system go back to the early 1980s.
Over this time, a firm bond has been formed with practically all local banks, thus covering the needs of Spanish exporters.
The proximity of the regional office of the Banco Sabadell in Singapore, which has been working in the country since 1990, has enabled us to set up intense cooperation on this market and with its public and private agents. Banco Sabadell Singapore has also strengthened our capacity to advise companies, investors, importers and exporters.
- A quality personalised service meant for Spanish companies with commercial or investment interests in the country.
- Financial and commercial advice on the market.
- Follow-up of operations, projects and tenders.
Business structure in Thailand
Incorporating a foreign company
A foreign company can be set up in Thailand in the following forms
Its work must only be handling the interests of the company or its subsidiaries. It is not allowed to do business or perform any transactions which entail earnings.
This is only applicable for certain highly specific cases. The parent company takes on all the branch’s obligations. It is more complicated to run than a limited company or PLC:
Incorporating a Thailand company
There are three types of business companies:
A single person company with the sole shareholder’s assets being liable.
Made up of several partners. The liability may be unlimited or limited.
Limited liability company:
The partners’ liability is limited to the capital invested. This is the form most widely used in Thailand and the one preferred for a foreign investment. It requires at least three shareholders. The commonest form is the joint venture. This requires a Thai partner and must be incorporated for a specific project. It does not have a legal personality other than that of its partners.
Means of payment in Thailand
Exports to Thailand:
- Documentary credit:
means the seller has a guarantee of collecting payment prior to shipping the goods. There is an option of financing the payer (importer). Options for financing documentary credits.
collection management of trade documents with the purchaser by a local bank. Usually with payment or draft at sight.
- Advance payment:
only authorised companies can make these, on condition that they meet certain requisites.
- Guarantees for advance payment:
performance bonds, deposits and also, for regular transactions or capital goods.
- Forfaiting and discounting invoices:
y descuento de facturas:
accepted in THB and convertible into currency for projects.
- Project finance.
Imports from Thailand:
- Crédito documentario:
bank commitment to pay, conditional on submitting the documents accrediting export.
collection management of trade documents.
- Import remittance:
collection management of trade documents with the purchaser by the Spanish bank.
including the form of surety up to 12 months with renewal to cover regular purchasing periods.
International negotiation protocol in Thailand
- The Thai people tend to be respectful and reliable in their commercial relations.
- It is vital to know how to establish a relationship and keep this active with regular visits and follow-up.
- A proper technical after-sales service must be provided (especially for exporters of equipment and machinery, supplies and industrial items, etc.).
- Flexible and dynamic negotiations.
- It is vital to have a local agent.