Doing Business in Thailand
Expats doing business in Thailand do so in a country that has gone from being the fastest growing economy in Southeast Asia, to one that significantly shrunk before the military took control of the government in a bloodless coup.
While Bangkok is stable and peaceful, exports have sunk below their previous highs and personal debt is mounting.
The government has, however, tried to reassure investors and has made economic growth a high priority. As a result, billions of dollars have been freed up for infrastructure projects and the state is eager to do business with foreign investors.
While the Kingdom has never felt the influence of an imperial power, it is no stranger to external interaction. Aside from the government’s willingness to do business with outsiders, the friendly and welcoming attitude of Thai people makes for an inviting working environment for expatriates.
Despite its relative instability, the World Bank ranks Thailand at 49th out of 189 countries in its Ease of Doing Business Survey for 2016. The country especially scores high for getting electricity (11th), protecting minority investors (36th) and dealing with construction permits (39th).
A variety of multinational and other major companies in Thailand continue to use Bangkok as a base for their regional operations. While the business culture at some of these companies will be familiar, the general work environment in Thailand is very different to what most Western expats are used to.
The expats that do make a success of their investments in the country often have a good understanding of the business culture in Thailand, in an environment that values seniority, relationships and local customs.
Thai. English is widely understood, and is used by many in more corporate environments as the language of business in Bangkok. Interpreters may, however, be needed in certain circumstances.
Hours of business
Usually Monday to Friday, 8am to 5pm or 9am to 6pm with an hour’s lunch.
Conservative and formal. Dark suits are standard in professional environments; men wear a white shirt and a tie. Women can wear suits, dresses or blouses and skirts provided they are modest. Skirts and dresses should at least be knee length and their shoulders should stay covered. While suits are not as much of an issue, expats should avoid wearing black; it is associated with funerals. Many workplaces will not require full suits, in which case a shirt, trousers and a tie is often standard.
Westerners may be greeted by a handshake, but the traditional form of greeting in Thailand is the wai. In this greeting the palms are pressed together at chest height, with the fingers extended upwards and accompanied with a slight bow. It is usually initiated by a person of lower status to a person of higher status as a form of respect. The wai should not, however, be returned to people such as hotel and service staff – a simple nod will suffice.
Not expected, but appropriate and well received. Small tokens for colleagues go a long way to building good relationships. Do not open gifts in front of the giver unless invited to do so.
Women are equal, but under-represented in the business world.
Business culture in Thailand
Thai business culture tends to be more relaxed than other Asian economic powerhouses, such as China and Japan. The value system around doing business in Thailand is, however, governed by one that is similar to these countries. As a result, hierarchy, relationships and collective identity are integral to the Thai workplace.
Strict, unwritten rules define the way that Thai businesses are organised, with senior managers playing an almost fatherly role – issuing orders, demanding consultation on all decisions and expecting obedience.
Expats from Western backgrounds often struggle to adapt to this management style, and can be frustrated at the lack of initiative taken and expected of them.
Age and appearance are especially important, and usually directly indicate social status and a person's position in the business world.
Older individuals, in particular, are given great respect and usually hold top-level jobs. Senior foreign businessmen, especially the well-dressed, are usually afforded a good deal of respect based on this belief alone, regardless of merit.
In line with this, promotions in Thailand are often based on a candidate’s length of service more than productivity and excellence.
Relationships are another important part of working in Thailand. Connections are highly valued, and the early stages of most business dealings are centred on building a relationship – it is impolite to start negotiating before being formally acquainted.
Preserving and sustaining relationships greatly affect communication in the Thai working world. Locals will be subtle and indirect to help another person “save face” and keep their reputation intact, going as far as withholding information or failing to point out a mistake.
Despite the social codes that define business practice in Thailand, Thai people often have a zest for life and a good sense of fun. They are also likely to place family ahead of their business priorities.
Dos and don'ts of business in Thailand
Don't show any form of disrespect to Thai royalty, including jokes
Do say yes to invitations to social engagements. Building relationships is important in Thai business culture.
Do have high-quality business cards printed for exchange. Always offer card to the most senior member of a party first, and always give and accept cards with the right-hand. Keep in mind that exchanges are initiated by the host.
Don't take advantage of local colleagues' understanding about people being late because of Bangkok’s extreme traffic – let associates know in advance when running late for a meeting
Do address people by their formal title and their first name. Last names are a recent addition to Thai culture and are often difficult to pronounce.
Do return a wai. While foreigners aren't expected to initiate, it is rude not to return the gesture.