Looking to launch your startup in Thailand? Thailand is globally acknowledged for its rich culture, exquisite cuisine and natural beauty. But you might not be aware that Thailand is also a popular business destination for both Thai as well as foreign businesses to launch their startups. The GDP (Gross Domestic Product in Thailand was US $501.79 Bn last year in 2020, and is expected to reach 546.00 USD Billion by the end of 2021 as per World Bank.
Thailand has a comparatively low cost of living, together with high-speed internet access practically everywhere, stable power, and low cost of food, housing, medical care, as well as transportation costs. Thailand is well ahead of the curve in enticing talent from the world over. Obviously, these factors aren’t exclusive to Thailand. However, what sets the country apart and makes it attractive for foreign investors is its strategic location and government support, plus all the benefits it provides to businesses in the country. Let’s have a look at some of the key reasons why Thailand is becoming such a popular business destination for startups.
Key Benefits of Launching your Own Startup in Thailand
●Strategic Location – Thailand is located between China and India. Many foreign investors find that Thailand’s location is ideal to penetrate the thriving Asian Market. Its strategic location attracts many foreigners to establish a business in Thailand and to access the Asian markets. Not only is it suitable to trade with these two neighboring nations, but Thailand is also a member of ASEAN (Association of Southeast Asian Nations). Investors engaging in Thailand would have accessible trade routes with Singapore, Vietnam, the Philippines, Malaysia, Laos, Brunei, Myanmar and Cambodia.
●Government Incentives – The government of Thailand is quite supportive of companies setting up business in Thailand, including businesses owned by foreigners. The government offers several business opportunities in Thailand for attracting more FDI (foreign direct investment). The government of Thailand has made the registration process for the companies pretty straightforward. Hence, foreign investors could easily do business in Thailand without any problems and also the company formation in Thailand is also streamlined. The government also took initiatives to enhance the business landscape in Thailand.
●Low-Cost Labour – Thailand has a population of 70 million (as of 2021), which means there’s more workforce accessible to a company in Thailand. The literacy rate in Thailand is around 94%, which implies that Thailand offers an educated labor force. The Thai workforce is comparatively cost-effective with respect to their daily wages. In Thailand, the average daily wages range from $6 to $8.
●Ease of Doing Business – As per the World Bank’s annual rating, the country is currently ranked 21st among 190 among other economies. This rank is apparent enough that it’s easy to start a business in Thailand. The ease of doing business in Thailand improved a lot from 26 in the last decade to 21, which infers is a positive signal for investors both domestic and overseas.
●Promising Tourism Industry – It’s a well-known fact that Thailand is among the best tourist destinations and also one of the most visited nations in the world. This is very beneficial for businesses that are dependent on a foreign clientele. Businesses such as restaurants and hotels get the most out of the tourism industry.
●Diversified Industries – Thailand has a vast and dynamic manufacturing sector that produces an assortment of goods from toys, jewelry and furniture to rubber and fish products to name a few. This sturdiness in the manufacturing and FMCG sector has enabled the country to lead the trade and commerce within the region.
Foreign investors, professionals as well as retirees would be able to relish new incentives in Thailand, as the Thai government looks to interest high-earning foreign residents in helping Thailand’s COVID-19 recovery. On September 14, 2021, Thailand’s cabinet through a resolution introduced tax, immigration, and land ownership incentives designed for skilled professionals and foreign investors. These incentives are efforts to stimulate the country’s economy which has been severely impacted by the pandemic. As per a government spokesperson, the Thai government assumes the incentives would attract a horde of foreign investors as well as professionals in the coming five years, that would contribute over US $30 Bn to Thailand market economy.
These incentives are of three categories:
Immigration – Qualified applicants could receive a long-term resident visa for 10 years to live in the country, including spouses and children. Automatic work permits would also be issued to qualified applicants. This is one of a kind visa that didn’t exist previously in Thailand.
As opposed to other Thailand visas, those on this visa won’t have to provide written notices to the respective authorities for a stay exceeding 90 days in Thailand.
Tax – The qualified applicants would be able to enjoy income tax rates the same as available to the Thai citizens, and tax exemptions for the income earned overseas. Moreover, the qualified applicants will be able to apply for a 17% fixed income tax rate in line with the Eastern Economic Corridor scheme.
Land and property – These qualified applicants would be able to enjoy eased out restrictions on foreign ownership as well rent of property and land.
These incentives would be supervised by the county’s Office of National Economic and Social Development Council (NESDC). They would be there from 2022-2026 for five fiscal years, at which their performance will be evaluated and a further decision on whether to further extend them.
Although you might be lured by the benefits that Thailand has to offer, you still might need some hand-holding opening a business in Thailand once you have arrived in the country. Even with a lot of streamlining of the process, still, a lot of operational details needs to be taken care of before starting a business in Thailand.
As a foreigner, you may not be conversant with the company requisition process. Therefore, for easing the registration process, it’s better to contact a startup consulting in Thailand. Business startup consulting firms in Thailand can work with you in reviewing your business model and assist you in identifying strategic initiatives that would support your business objectives. A Thailand representative through facilitated sessions would develop the right strategy for your business development in Asia. Also, these Asian business consultants would help you in executing, monitoring and making ongoing adjustments to your business strategy.
Developing a robust business plan is crucial for a successful startup. Consulting firms in Thailand work with you in building robust plans which involves detailed strategies such as finance, marketing, operations, sales, supply chain, engineering and procurement.
Along with the rapid growth Thailand is relishing, it also reaps the benefits of being a friendly, competent, hospitable culture immersed in history. Challenges are there everywhere in the world. Add start-up to that equation and the rate of failure is intimidating. But individuals don’t get into start-ups to be unsuccessful or repeat their past, they work to see that their ideas or concepts come to life. Thailand has made all the efforts to improve the country’s economy and promote foreign relations and technological advancement. It’s no surprise that Thailand is today among the popular business destinations for foreign investors. The foundation of the dreams starts here in Thailand and it’s exhilarating to imagine what boundless harvests lay ahead in Thailand’s evolving economic future.
Interesting Reads :
Overview of Thailand’s Startup Ecosystem
Critical Success Factors for Startups in Thailand
The Importance of Consulting a Startup Specialist
Why 90% of Startups Fail and How to Avoid It
Opportunities for Startups in Thailand
Source: Asian Correspondent
The pandemic no doubt had made an unparalleled impact on the tourism and hospitality industry. It seems that the pandemic had forced businesses globally to respond to the innovative changes in the market, but the reality is that the pandemic just augmented most of the conceivable changes we expected for the future. A business that can navigate through the pandemic crisis quickly is generally the one that is flexible and has already had plans in place in response to the probable future.
Now that the Thai economy is starting to recover, it becomes crucial for a business in Thailand to take a holistic approach to plan. Managing the operational and commercial issues on an ad-hoc basis won’t work anymore as most of the changes observed in the Thai market today are likely to continue beyond the pandemic.
Thailand’s Recovery to Gain Traction
According to Fitch Ratings, Thailand’s economy will recover and gain traction in 2022, reinforced by significant improvements in vaccination rates, supportive global growth environment and business reopening in Thailand. The return of tourism would be gradual, and as per Fitch Thai GDP will reach pre-pandemic levels by 2023. In the backdrop of the Thai government’s decision to re-open facilities and businesses, the hospitality business houses and even Thai startups are stepping up and adopting new practices for ensuring the safety of guests and staff while complying with local regulatory guidance in place.
Quarantine-free Travel for Fully Vaccinated Travelers
Thailand is resuming its quarantine-free travel from the 1st of February. Pandemic related travel curbs have hit Thailand’s tourism-dominated economy, sending its visitor dwindling to a trickle. Fully vaccinated travelers would be allowed to enter the country under the “test and go” scheme provided the visitors take covid tests on the first as well as the fifth day after arriving in Thailand. Visitors are also required to isolate themselves at their hotel while waiting for the results of their test and need to download a tracking app for ensuring they obey the rules.
Strategies to follow by Hospitality Industry in Thailand
The need of the hour for the hospitality sector in Thailand is to take steps strategically for survival, revive services and build capacities, and thrive once the pandemic subsides. But what are the strategic and appropriate steps the tourism industry in Thailand should take in this global crisis?
Digitalization has been a recurrent issue in the hospitality business in recent times. In the past, hotels in Thailand delegated this key strategic task to other organizations, like Online Travel Agencies and Review platforms, which in turn is offering investment opportunities in Thailand in the online hospitality sector. Most of the hotels have, since then, recognized the importance of digital presence, particularly for boosting their direct bookings.
Since the onset of the pandemic, digital booking has grown and has contributed a bigger chunk of the overall volume in Thailand. As physical travel agencies are losing business in Thailand, it’s easy to comprehend that the already declining traditional means of booking hotels are now doomed. Ultimately, digitalization is going to take over the overall hotel booking market in Thailand. To benefit from this new status-quo, a Thai business involved in the hospitality sector should pull every string they can for optimizing their digital presence.
In the recent few years, outbound marketing hasn’t been a priority for hotels in Thailand. Especially online, where there’s stiff competition with OTAs, marketing might feel like tossing pebbles at a pool: a waste of money, time, and energy.
However, the pandemic has caused the hotel customers’ base to shrink drastically. For refilling this clientele, hoteliers should work with marketing consulting firms which can help them in making people desire to travel again. This isn’t a small task, but with the right business consultant services, hotels could start rebuilding the trust of their guests.
Special Offers and Campaigns
While compulsory shutdowns have disrupted the tourism industry and consequently the hotel industry in Thailand, they see some hope and new opportunities, as the Thai government plans to reopen tourism in Thailand for visitors. A key strategy for the hospitality industry is marketing campaigns targeted toward individuals looking to get away from their homes with innovative offers, such as reservations for a few hours, all-inclusive packages, etc. Businesses should leverage by attracting millennials with offers, who are eager to explore and excited for tailored experiences.
Advanced AI solutions need to be developed to make these campaigns targeted and actionable. Hotels can use advanced analytics on user actions, customer data, etc. which can help them in creating targeted campaigns offering a high degree of success which can also be used for future campaigns. Application of successful campaigns require proficient and expressed professionals thereby creating opportunities for start-up business in Thailand.
Businesses need to be on top of their game while engaging with their patrons. One way is to keep their websites and mobile apps intuitive and interactive, provide regular notifications informing guests about hotel offerings, local attractions, etc., and also ensure that hotel reservations offer flexible cancellation policies. The websites and especially the mobile apps should be interactive to ensure that the hotel guests are able to get their concerns or questions addressed instantly either with the help of live agents or via bots. Hotels should also make sure that their guests stay engaged even after guests check out for facilitating the flow of accurate information about the risk of exposure or the spread of infection.
Businesses should always be ready in advance for the unexpected outbreak, monitor early signs, and manage room inventory so that there are always enough spare rooms for moving guests. Employ inventory optimization software for accommodating emergency readiness protocols. Such software could be leveraged for quickly deploying emergency readiness schemes.
As we have witnessed, the Thai hotel customer base was reduced significantly by the pandemic. To stand out from the competition, hotels in Thailand need to differentiate themselves for the better. Apart from outperforming the competition in the digital and marketing fields, hotels can seek help from business consulting services for implementing innovative solutions and strategies.
Innovation at times is a gamble, as new solutions aren’t always scalable and it might not pay off in the longer run. However, since the pandemic outbreak has triggered a great hospitality reset, it’s the best time to take calculated risks. A disruptive solution might be the decisive factor and the difference that a business needs to make the most of this new environment.
Hotel Renovation and Maintenance
Pandemic outbreak doesn’t mean that hoteliers have closed their doors and are waiting for the pandemic and the lockdown to end. This break offers a perfect time to improve and do some catch up. Whether it’s completing property improvement plans or spontaneous renovation, there won’t be a better time than this. For starters, hotel businesses could make a list of things, items, and everything that requires repair, check maintenance supplies, railings and balcony checks, laundry room systems check, life safety checks, elevators, pool systems, check lights and fittings, etc.
Staying Informed about Available Reliefs
Businesses not just in the hospitality sector but overall, should be aware of the Thai government’s financial support and assistance. The Thai government has offered various incentives such as deferment of payments, tax cuts, support and grant funds for starting a business in Thailand, low-interest working capital loans to open small businesses in Thailand, etc.
Business consultant services can also help businesses in Thailand to keep up with the government’s relief and assistance programs and all the latest developments which can help them cope with the current crisis and stay ahead in business.
The Future of Hospitality
We have seen how pandemic has brushed the old strategies in managing the hospitality sector. The hospitality market in Thailand needs to redesign its way of operation and build anew. Aforesaid are a few pathways and strategies hoteliers could use to thrive in this brand-new world.
Over the long run, hoteliers would have to adjust to the new status-quo and continue to innovate and be a part of the “new normal”. Though, the new normal isn’t the same in the hotel industry: it’s what hoteliers decide to do with their limited resources. The Thai hospitality industry should intend to lead the new normal by being rational and visionary and taking brave steps.
Interesting Reads :
Hospitality Industry and Digital Age
Business Relations between India and Thailand
Thailand Government – How Supportive is it for Business ?
Fastest way To make $1 Million in Thailand
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Source: Asian Correspondent