How to Get Funds or Secure Loan/Investment for My Business in Thailand?
Entrepreneurs intending to start a new business in Thailand need sufficient capital to get their business off the ground. When devising a business strategy, entrepreneurs need to be realistic when determining the amount of capital they require to start their business. Fortunately, they can go about many ways to obtain funding. Still, some funding options can be risky.
Hence, entrepreneurs need to understand the various business aspects, identify their future goals and analyse every funding opportunity to ensure they start their business on the right track. Mistakes in finances can easily result in a large amount of debt. This article guides you through the best ways to obtain financing for your business in Thailand.
Finance Incentives from the Government
The Thai government provides financial incentives in the form of tariff reliefs and tax breaks for businesses in the United States and the United Kingdom looking to invest and expand in the country’s economy. While these tax incentives include many primary industry sectors, they typically only apply to businesses looking to invest beyond Bangkok city in certain development zones.
Below are the available government incentives:
- Exempt from corporate income tax for up to eight years
- Reduction on import duty or machinery and raw materials’ exemptions
- Corporate income tax reduction for up to fifty per cent for five years
- No public utility expenses
- Infrastructure construction or installation deduction
- No limitations on foreign currency remittances
Finance from Private Banks
Banking in the country is created almost exclusively of big national banks. To pursue this finance option, business owners need to create a solid business strategy and understand the local business etiquette and conventions. They may also seek the guidance of a professional accountant or agent knowledgeable of the local financing environment.
Crowdfunding in Thailand
Getting the needed funding capital for a start-up business can be challenging as anyone interested in lending money does not have the absolute confidence that the business idea will be successful. Many entrepreneurs with clever inventions or ideas moved to Crowdfund platforms. While this approach is new in the country, many Asian economic experts believed it would become a vital concept to drive economic development and motivate new entrepreneurs.
The way this concept works is that anyone can provide money to help a business they believe in.
Entrepreneurs will provide a detailed description of their business idea, goals, target audience, funding needs, and future financial plan to profit on the platform.
Crowdfunding platforms like Indiegogo are suitable campaigns that draw attention. Entrepreneurs may also consider local crowdfunding options in Thailand like Sinwattana and Dreamakerequity.
Small Business Loan
Major banks tend to provide various customised options, such as microloans, for small business owners. Nevertheless, entrepreneurs who are starting a business in the country for the first time are likely to go through a tough lending period.
Entrepreneurs need to explain how every bath of the loan will be spent when going to the bank. They need to do so convincingly and clearly. Some banks may not grant loans to first-time business owners as they seem too risky.
In 2015, Thailand’s securities and exchange commission announced the permission for foreign companies to launch IPOs or initial public offerings in Thailand and list them on the Stock Exchange of Thailand. This initiative is a part of the country’s growing trend to establish itself as the fundraising centre for companies in neighbouring nations, such as Vietnam, Cambodia, Myanmar, Laos, and Yunan. Foreign companies intending to do business in Thailand may also find it beneficial and need public funding to help them start.
This funding resource is perfect for entrepreneurs who are setting up a business in Thailand. However, it has some caveats. The venture capitalist’s main disadvantage is that it generally looks for bigger investment opportunities instead of funding small businesses since the former typically offer a huge payoff in the end. To obtain this funding resource, start-ups need to be stable and backed up by a professional team.
Angel investors work in quite the same way as venture capitalists. However, the former runs a much smaller operation, sometimes operated by a single person. In exchange for offering funds, Angel investors usually want a big portion of the company, making money once the business starts making a profit.
Getting Help From a Professional Company Registration Firm in Thailand
Professional company registration firms in Thailand help businesses register a Thai company smoothly and easily without violating any regulation. Some firms also offer other beneficial business solutions, including accounting, payroll, audit, corporate secretarial, and business advisory services