Doing business in Thailand
With an economy acknowledged as the fastest growing in Southeast Asia (2010) and a coastline credited as one of the world's most charming, it comes as no surprise that more and more expats are considering doing business in Thailand.
Though this former kingdom has never felt the influence of an imperial power, the nation is no stranger to external interaction, and the friendly and welcoming attitude of the Thai people makes for an inviting working environment for foreigners.
Furthermore, the World Bank ranked Thailand 19th (out of 183 economies) in terms of "Ease of Doing Business", a clear testament to the governments open policy when it comes to international investors.
Many multinationals have even chosen Bangkok, Thailand's capital and commercial centre, as a base for their regional operations.
Thai business culture is considerably more relaxed than other nearby Asian economic powerhouses, like China and Japan. That said, the working world is governed by a similar value system; in which hierarchy, relationships and collective identity are integral.
Strict, unwritten rules define the organisational structure of the workplace, with senior managers assuming a function similar to that of a family's father; issuing orders, demanding consultation on all decisions and expecting the utmost obedience. Expats from western backgrounds often struggle to adapt to this management style, and experience frustration in the resulting lack of initiative taken and expected.
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. Foreign businessmen, especially the impeccably dressed, silver fox type, may be surprised to find that they are afforded a good deal of regard solely based on this belief, all merit aside.
In the same vein, promotion is based on length of service rather than productivity and excellence.
Relationships are also an important part of the Thai business culture. Connections are highly-valued, and most initial business dealings will centre around cultivating some sort of base relationship. In Thailand, it's impolite to start negotiating before formally being acquainted.
It follows that preserving and sustaining a relationship greatly affects communication in the working world. Locals will be subtle and indirect to avoid damaging a person's prestige and reputation ( a concept known as "saving face"), even at the expense of withholding valuable information or failing to point out a mistake.
All said, expats should realise that Thais like to live life. They enjoy a bit of fun and will likely place their family ahead of any business priority they may have.
Though Thailand was ranked 95th (out of 183 economies) by the World Bank in terms of "Starting a Business", it continues to pique the interest of a multitude of foreign investors looking to open up shop overseas.
Attractive aspects include: a skilled and cost-effective workforce, a stable infrastructure, strong government support and a welcoming attitude.
That said, the Alien Business Law restricts foreigners from doing business in certain industry sectors. Otherwise, to open a private limited company, the most popular type of business started by expats, it's required to:
Business language: English is widely understood, and is the major commercial language of Bangkok. Still, interpreters may be needed.
Hours of Business: 8am to 5pm or 9am to 6pm with lunch between 12 pm and 1 pm
Dress: Conservative and formal, but suits are a rarity. A shirt, slacks and tie for men, and blouses and below-the-knee skirts for women (some offices accept pant suits). Jackets to be worn for meetings with senior management.
Gifts: not expected, but appropriate and well-received. Small tokens for your colleagues go a long way. Do not open gifts in front of the giver unless invited to do so.
Gender equality: Women are equal, but under-represented in the business world.
Though this former kingdom has never felt the influence of an imperial power, the nation is no stranger to external interaction, and the friendly and welcoming attitude of the Thai people makes for an inviting working environment for foreigners.
Furthermore, the World Bank ranked Thailand 19th (out of 183 economies) in terms of "Ease of Doing Business", a clear testament to the governments open policy when it comes to international investors.
Many multinationals have even chosen Bangkok, Thailand's capital and commercial centre, as a base for their regional operations.
Business culture in Thailand
Thai business culture is considerably more relaxed than other nearby Asian economic powerhouses, like China and Japan. That said, the working world is governed by a similar value system; in which hierarchy, relationships and collective identity are integral.
Strict, unwritten rules define the organisational structure of the workplace, with senior managers assuming a function similar to that of a family's father; issuing orders, demanding consultation on all decisions and expecting the utmost obedience. Expats from western backgrounds often struggle to adapt to this management style, and experience frustration in the resulting lack of initiative taken and expected.
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. Foreign businessmen, especially the impeccably dressed, silver fox type, may be surprised to find that they are afforded a good deal of regard solely based on this belief, all merit aside.
In the same vein, promotion is based on length of service rather than productivity and excellence.
Relationships are also an important part of the Thai business culture. Connections are highly-valued, and most initial business dealings will centre around cultivating some sort of base relationship. In Thailand, it's impolite to start negotiating before formally being acquainted.
It follows that preserving and sustaining a relationship greatly affects communication in the working world. Locals will be subtle and indirect to avoid damaging a person's prestige and reputation ( a concept known as "saving face"), even at the expense of withholding valuable information or failing to point out a mistake.
All said, expats should realise that Thais like to live life. They enjoy a bit of fun and will likely place their family ahead of any business priority they may have.
Starting a business in Thailand
Though Thailand was ranked 95th (out of 183 economies) by the World Bank in terms of "Starting a Business", it continues to pique the interest of a multitude of foreign investors looking to open up shop overseas.
Attractive aspects include: a skilled and cost-effective workforce, a stable infrastructure, strong government support and a welcoming attitude.
That said, the Alien Business Law restricts foreigners from doing business in certain industry sectors. Otherwise, to open a private limited company, the most popular type of business started by expats, it's required to:
- have a minimum of three promoters
- file a memorandum of association
- convene a statutory meeting
- register the company
- obtain a company income tax identity card
Doing business in Thailand: Fast facts
Business language: English is widely understood, and is the major commercial language of Bangkok. Still, interpreters may be needed.
Hours of Business: 8am to 5pm or 9am to 6pm with lunch between 12 pm and 1 pm
Dress: Conservative and formal, but suits are a rarity. A shirt, slacks and tie for men, and blouses and below-the-knee skirts for women (some offices accept pant suits). Jackets to be worn for meetings with senior management.
Gifts: not expected, but appropriate and well-received. Small tokens for your colleagues go a long way. Do not open gifts in front of the giver unless invited to do so.
Gender equality: Women are equal, but under-represented in the business world.
Do's and don'ts of business in Thailand
- Don't - in fact, never - make jokes about Thai royalty.
- 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 - assume that just because it's acceptable (due to the extreme nature of Bangkok traffic) to be late to a meeting, that you should be. In the case that you are held up make a conscientious effort to notify those you are meeting with.
- 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, a greeting gesture where you place the palm of your hands together, with your fingers extended and bow slightly. While foreigners aren't expected to initiate, it is rude not to return the gesture.
