Making an investment, as a businessman, into the Thai economy is a decision you can reap advantages from in the long run. As they say, you will not go wrong deciding to make an investment or starting a business in Thailand. However, you can go wrong with a few things if you don’t take care to observe certain measures or take specific precautions.
Make no mistake about it – making an investment is like diving into deep waters. You don’t know what’s going to happen, and only your skills in managing a business and your finely-tuned entrepreneurial sense to guide you. Of course, you have people or entities to assist you with that but we’ll discuss that later.
Some entrepreneurs, unfortunately, have fallen into several traps when they first put money into a business in Thailand. You can avoid this by finding out what these pitfalls are! Without further adieu, here are some of the common mistakes you should be avoiding when investing in Thailand:
- Not having an understanding of the Foreign Business Act
The Foreign Business Act of 1999 governs the very existence of foreign-owned businesses in Thailand. Every businessman needs to have a basic understanding of the FBA before they decide to register a company in Thailand, or else, they might end up violating the law. Unfortunately, ignorance is never an excuse when committing transgressions against the law. Learn what you could about the FBA and then seek legal counsel for more information. - Practicing nominee shareholdership
Nominee shareholders, or people who sign up documents purporting to make them stock holders in a company but with no actual voting power, are against Thai law. Most foreign-owned businesses in the past used to subscribe to this practice in order to retain majority ownership, but the Thai government is now actively cracking down on those firms that have been incorporated through this method. Guilty parties could end up paying hefty fines or, worse, facing terms of imprisonment.
- Not retaining the expertise of a legal counsel in Thailand
If you’re thinking about starting a business in Thailand, you need a legal counsel who is based in Thailand. This ensures that you have a person you can rely on when you have questions regarding Thai investment, property and financial laws. As a businessman, you need a legal counsel who is also well-versed in both English and the Thai language so that he or she can act as an intermediary between you and the locals to ensure that nothing is lost in translation.
As you can see, all of these mistakes can be avoided when you have retained a legal counsel in Thailand. With a legal counselor guiding you along the way, you can be sure that your investments and, subsequently, your properties in Thailand are in good hands.
For your legal advice and property management needs in Thailand, don’t hesitate to give us a call or drop us a line at our email. You can also visit our social media pages and learn more about us. We’ll be happy to accommodate you.
