How to start a business in Thailand: a practical guide for foreign founders (Part 1/4)
- Vincent Birot
- May 23
- 4 min read
Bangkok, Thailand
Board Member
La French Tech Bangkok
Foreign founders setting up a business in Thailand typically face three issues: which visa allows them to legally work in Thailand, how to structure the company effectively under the Foreign Business Act restrictions, and how to fund the business without exhausting capital before revenue begins to come in. The most cost effective option is the DTV visa, however, this can only be used by founders working exclusively with overseas clients and not providing services within Thailand. At the other end is a BOI-promoted Thai company, which offers a much stronger long-term structure for businesses operating locally such as 100% foreign ownership. The most suitable choice ultimately depends on where your customers are based and how the business intends to operate.
The founders we meet through communities at the French Tech Bangkok come from very different backgrounds and stages of business growth. Some are in their twenties, building a business with personal savings and a small support network. Others are experienced entrepreneurs launching another venture with institutional backing and a defined long-term strategy.
While their budgets, risk tolerance, and business goals may differ significantly, the legal and regulatory framework they face in Thailand is the same.
Some countries allow startups to test new business models under special “regulatory sandbox” programs before obtaining a full licence. These frameworks are commonly used in fintech and financial services to help early-stage companies launch products under limited regulatory supervision.
Thailand has introduced a limited number of sandbox programs through the Bank of Thailand and the Securities and Exchange Commission for specific fintech activities, but there is no broad startup exemption allowing founders to operate informally before becoming fully compliant. The more relaxed approach that was once common in Thailand has gradually tightened. Immigration enforcement relating to unauthorized work has become increasingly visible across coworking spaces and startup communities in cities such as Bangkok, Phuket, Koh Samui, Koh Phangan and Chiang Mai.
In practice, choosing the right structure usually comes down to three practical questions: where the customers are located, where the founder will physically be working, and how much capital the business can realistically keep inside a Thai entity during its first 12 months of operation.
1- Key points for foreign business in Thailand
• The DTV visa allows foreigners to live in Thailand while working remotely for overseas clients and businesses. It can work well for early-stage founders serving foreign markets, but complications often arise once the business begins generating Thai revenue or servicing local clients.
• The Foreign Business Act B.E. 2542 (1999) restricts foreign ownership in many service-based sectors, including software and digital services. Foreign founders usually need to structure the business through a Thai joint venture, a Foreign Business Licence, or BOI promotion.
• For many technology businesses, BOI promotion is often the most practical long-term structure. It can allow 100% foreign ownership, removes the standard Thai employee ratio requirements for work permits, and may provide tax incentives, although software companies must maintain a minimum annual Thai IT payroll of THB 1.5 million.
• The “Thailand as a hub” structure, where a founder lives in Thailand while operating through an offshore company in jurisdictions such as Hong Kong or Singapore, can still work in certain cases. However, changes to Thailand’s foreign-sourced income tax rules from 1 January 2024 mean that tax residency, remittance planning, and offshore substance now require much closer attention.
2- Why founders cannot treat Thailand like a regulatory sandbox
A regulatory sandbox is a supervised framework that allows startups to test regulated products or services without immediately meeting the full licensing requirements that would normally apply. Regulatory sandboxes provide founders with a limited period to operate under regulator oversight while benefiting from lighter compliance obligations or reduced capital requirements.
Several countries have adopted these systems to encourage fintech innovation. The Financial Conduct Authority in the U.K. launched its regulatory sandbox in 2016 and has since supported hundreds of fintech companies. Similar frameworks also exist through the Monetary Authority of Singapore and France’s Autorité de contrôle prudentiel et de résolution.
Thailand does offer its own regulatory sandboxes, but only in a limited number of sectors. The Bank of Thailand operates regulatory sandboxes for areas such as digital lending and certain payment services, while the Securities and Exchange Commission has introduced sandbox frameworks for digital assets and tokenisation projects.
Outside these narrow categories, there is no broad exemption for early-stage startups. Businesses operating in regulated sectors are expected to comply with the full licensing, corporate, tax, and immigration framework from the beginning.
Furthermore, enforcement has also become significantly stricter over the past two years. Thailand’s foreign-sourced income tax rules changed on 1 January 2024 following the introduction of Departmental Order Por. 161/2566 by the Revenue Department. The Thailand Board of Investment later introduced updated rules for foreign experts at BOI-promoted companies under Announcement Por. 8/2568, effective 1 October 2025, including minimum salary requirements for certain positions.
At the same time, immigration enforcement relating to unauthorized work has become far more visible across coworking spaces, cafés, and startup communities in cities such as Bangkok, Chiang Mai, and Phuket. The “build first, comply later” approach that many startups relied on a decade ago now carries significantly more risk.
This article has been written to help founders choose the structure that best fits their specific business model, while the company is still at a stage where adjustments and corrections can be made relatively easily.
Stay tuned for the next part of this guide, focusing on visa types and requirements in Thailand (Part 2/4).