HOW TO START AN IMPORT-EXPORT BUSINESS IN THAILAND | Doing Business In Thailand
Hello, My name is Murat. Let's start! How to start an import-export business in Thailand As you grow your business, you may eventually want to go international and start an import-export business in Thailand. Whether as an agent or direct trader, the fact is that Asian countries today offer both export opportunities for exporters, and import opportunities for those looking for great new products to import and resell. Thailand is a Southeast Asian country where you should keep looking.
Expanding your business into Thailand can be a great opportunity. However, there is a lot to learn - such as finding and vetting suppliers, finding buyers, choosing the right products in the market, organizing shipments, customs procedures, and inspections, etc. In fact, "Made in Thailand" products meet all the strict requirements of consumers: beautiful design, quality, affordable prices. Therefore, many foreign importers choose Thailand to import goods. In terms of the price level, Thailand is close to China. You need to understand the Thai market and local conditions to know how to run an import-export business in Thailand or with Thailand.
Okay, let’s look at the advantages of doing business with Thailand. In two thousand seventeen, the Thai economy continued to grow with a GDP growth of about three point nine percent. The Thai government has managed to create jobs, stabilize incomes and boost the economy.
Thanks to the recovery of the global economy, government policies, and public spending, and the recovery of the manufacturing sector in the first quarter of two thousand eighteen. Thailand is growing despite its heavy reliance on exports. However, growth is still lower than most countries in ASEAN. Foreign investors in Thailand believe that appropriate investment policy, good infrastructure, and competent human resources are the motivation for Thailand to maintain its competitive advantage and economic success. Accordingly, Thailand also has higher purchasing power compared to most Asian countries.
Thailand belongs to the ASEAN association. Within this union, countries can import products from each other without import taxes. This offers many advantages to exporters in Thailand. For example, they can import some products from other ASEAN countries (if the price is better) and re-export them from Thailand.
Thailand is making a great contribution to ASEAN cooperation. A roadmap for deeper integration into the regional economy as the ASEAN Economic Community officially comes into effect. Now let’s look at the Disadvantages of doing business with Thailand together. Although Thailand has many positive factors, its economy also faces many challenges. Many of the problems in the economy and its structure are due to demographic trends. Secondly, the Thai economy relies heavily on exports and tourism.
During the pandemic, these sectors are greatly affected and cause many problems in the country. Followings are some general negative factors that affect the attractiveness of Thailand for business: One - Slow recovery of the economy due to the pandemic. Two - The fishing industry is being fined by the EU for illegal fishing.
Three - Gas and oil reserves have been steadily declining for decades. Four - Declining agricultural production due to drought. In addition, Thailand faces two problems: a burgeoning economy and demographic problems as the population shrink, reducing the number of consumers, workers, and taxpayers, and a shortage of workers to care for the elderly, which may lead to higher taxation.
Okay, Let’s consider Thailand's main export products. Thailand has identified exports as the driving force behind its economic development, with exports accounting for sixty-five percent of GDP. In particular, Thailand has identified the following product categories as priorities: Rice, seafood, automobiles and auto parts, rubber products, and machinery parts. I suggest that when starting an export business in Thailand, you consider some specific products from Thailand's major export categories.
The same is true for importers. Import products that are among Thailand's most competitive sectors and industries. This will ensure that you are dealing with products and industries that have a competitive advantage in the world. Rice Thailand is a country that has competitive advantages through the cultivation and export of rice. The climate and economic factors are favorable for rice and the rice industry. In two thousand nineteen, Thailand exported seven-point fifty-eight million tons of rice, earning more than four point two billion US Dollars.
Thailand's rice exports are struggling due to the ongoing drought, resulting in limited supply and driving up prices. Thailand is currently funding a new rice research project aimed at diversifying products and expanding export markets. New rice varieties are to be developed and production costs reduced to maintain appeal in the international market. With rice, Thailand competes with another major rice exporter - India. Seafood Thailand is one of the largest exporters of seafood, such as shrimp, processed white shrimp, tuna, etc. Thus, Thai suppliers continue to be the number one in the world in processed tuna, with annual exports of about four hundred fifty to five hundred thousand tons and more than one hundred fifty countries.
Thailand's main export markets are the EU, the USA, Japan, and China. In the Japanese market, Thailand is the leading supplier of processed white shrimp. If you are planning to do business with Japan, you should consider this category. And you can watch my video about how to start an import-export business in Japan.
You can find the link somewhere here. Cars and auto parts Thailand is a country with a competent and inexpensive workforce, cheap energy, supportive infrastructure, and a strong metals industry. All this is a good foundation for the car and auto parts industry.
Many well-known car brands have located their factories in Thailand. Cars Thailand is currently the twelfth largest car manufacturer in the world and the largest in Southeast Asia. Auto Parts There are about two thousand companies supplying auto parts and auto components in Thailand, including seven hundred to eight hundred companies under FTI. Moreover, more than eighty percent of auto parts are for the domestic market, and only twenty percent are for export abroad. Rubber products Thailand has become the largest exporter of rubber, with China being the largest customer with an export turnover of one point ninety-six billion US dollars.
In two thousand eighteen, Thailand's rubber export turnover reached more than four point six billion US dollars, accounting for one point eight-two percent of the country's total export turnover. Thailand competes with Indonesia for its rubber products. Iron and steel. The Thai steel industry has been facing cheap products from China for a few years. To protect domestic production, the government has imposed anti-dumping and safeguard measures against imported steel, mainly from China and Russia. Sugar Thailand is the leading sugar producer in ASEAN and the second-largest sugar exporter in the world.
The Thai government has taken many direct and indirect measures to support domestic sugar production. Thai sugar is based on fruits. Now let’s consider The Main Import Products of Thailand. Agricultural products In addition to fresh fruits, Thailand has an import demand for vegetables such as carrots, potatoes, and herbs.
A large proportion of these vegetables are imported from India and China. In two thousand nineteen, Thailand imported more than three billion tons of fresh fruits worth about one billion US dollars, and eight hundred fifty million tons of vegetables worth about six hundred million US dollars. This data shows that Thailand is a potential market for importing agricultural products. Fuels Thailand is developing the downstream sector based on domestic and imported gas, which will help Thailand produce enough goods to meet domestic demand, and gradually become a leading exporter of petrochemical products in Southeast Asia. Now, we have an idea of Thailand's economy and the main import and export products of Thailand. So let's look at how to start exporting to Thailand and importing from Thailand.
How to start exporting to Thailand Starting an export to Thailand involves the same steps as in other countries, only local specifics should be taken into account. I also recommend that you bring in a local partner or at least a business consultant from Thailand. Planning and export marketing is the keys to success. Step One: Actively research the market. Exporters should actively participate in the market to find customers and prepare sources of goods.
Thai consumers are curious and willing to try new products and new experiences. You can promote your brand to the Thai market through product presentations, or to Thai distribution channels, trade programs, and agents. You must get direct feedback from potential customers. During the market research phase, it is critical to gather information about the products for which there may be a demand in Thailand. After receiving feedback, you as an exporter can adjust your strategy and change focus if needed.
Step Two: Prepare the documents for exporting goods to Thailand. As for export-import documents, at least five sets of commercial invoices are required. The commercial invoice should contain the following information; Country of origin, country of import, date of purchase and sale of goods, type of packaging, labels, total number of packages, information description of goods, selling price.
Bill of lading should contain the following information; Consignor, last consignee, and intermediary, labels and number of packages, other information about the importer. Regarding the packing slip, including the certificate of origin, special certificate, import permit, and export license. Step Three: Declare the invoice of the value and quantity of the goods for tax calculation. In Thailand, it is common for the supplier, importer, or manufacturer to declare the value and quantity of goods for tax calculation.
This applies to local Thai exporters and importers, but not to foreign exporters from other countries. However, the customs authority may revalue the goods to recalculate the tax if the declarant has declared a lower than actual market value. Taxes are levied by Thailand as follows. Medical equipment and fertilizers - zero percent, raw materials, and electrical equipment - one percent, production equipment and inputs for production - five percent, semi-finished products, intermediate products - ten percent, finished products - twenty percent, "special protection" goods - thirty percent.
Thailand also encourages investment by exempting and reducing import tax from fifty percent to a hundred percent for machinery and equipment for each place and project. The import of raw materials or special materials used for export is exempt from import duties for 5 years, depending on the investment projects of each locality. The value-added tax (VAT) applies to all goods and services in all activities related to the production of goods; for imported goods, VAT is refundable. Most services are subject to VAT except for some services. Books and newspapers are exempt from VAT.
Thailand's value-added tax rate is currently 7%. Step Four: Checking the packaging and labeling before exporting. Packaging should be made of safe materials and be heat and moisture-resistant. Exporters should also consider the possibility of goods being stored in an open space, so packaging should be made of waterproof material. Dry grass and straw should be avoided as packaging.
Labels The Thai government has very strict labeling requirements for dairy products, baby food, canned food, vinegar, soft drinks, and cooking oil. Food labels must be licensed by the Food and Drug Administration. When applying, the exporter must submit two samples of the product for each product, indicate the percentage of each ingredient and compound in that product, and submit product labels. Customs requirements in Thailand.
Food products exported to Thailand must be labeled with unique information. Such as name and brand, license number, name and address of production, name, and address of exporter, date of production and expiration, quantity and net weight, and directions for use. For drinks, the label must show the percentage of the alcohol contained in the product, warnings about harm to health when using the product (if any), and must print in Thai. For cosmetics, the label must be in Thai and specify the following information: The name of the cosmetic type; name and address of the manufacturer; User manual; ingredients in the product; Side effects when using the product (if any). Step Five: Check the shipping rates and choose the service provider. Exporting goods to your Thailand partner can consist of the following stages: Before signing the order, discuss with your Thai customer first, to make sure all the requirements and needed documents for exporting.
Make sure all the requirements can be met. Your supplier packs the goods into a container or on the truck. Should provide to you the packing list, proforma invoice, certificates.
Logistics company or freight forwarder arranges, picks up, and delivers the goods to the Customs warehouse. Customs may want to inspect the goods. You or your forwarder or logistics partner fill the export declaration and provide the required documents to your home country customs authorities. Also, the Certificate of origin should be applied. After customs has been finished, the goods are free to be loaded on the ship or to the airplane (if air delivery). Your freight forwarder or logistics company should book the departure in advance.
After goods are loaded on the ship or airplane, you can get the original Bill of lading or Airway bill. The original bill, commercial invoices, packing list, insurance, product certificates you can send to your Thai partner. They need these to clear the import customs after the goods arrive there. Check the price of the shipping services.
If you want to be advantageous when asking for prices and comparing shipping service prices, you need to know the following tips: One - Knowing Incoterms, Two - Knowing the list of international shipping costs, Three - Only ask for the shipping cost maximum of 3 suppliers. When writing the mail asking for prices, you should write to each supplier, not blind carbon copy because the supplier will know that this customer is asking for prices everywhere. Detailed cargo information.
If you want to get a good price from a carrier or freight forwarder, you must provide complete shipment information such as name, weight, packaging, the number of packages, size, date of goods, expected departure. Choose a forwarder. Do not try without a specialized freight forwarder. Forwarders are intermediaries in charge of arranging shipment and often they can also help you with the customs procedures. A lot of problems can be happened, for international shipments – especially for beginners. A good forwarder will take care of almost all organizational steps and solve all the stressful and complex issues.
For example, they will arrange a booking at the Main Leg stage with an airline, or a shipping line as well as (depending on your incoterms) at the pick-up stage. They will handle all the hassle of filing and customs clearance, including tariff advice. They may also have more management experience than a local shipping company in delivery. Okay, let's consider how to import goods from Thailand to your country. Many people may be interested to import goods directly from Thailand.
Especially people from nearby countries like Korea, India, China. I will give important aspects you should consider when planning to import some products from Thailand. Depending on the regulations of your country, individuals may or may not be allowed to import goods from other countries for business (depending on the number of goods). However, if you want to work for a long time, you should set up a company to import or use import services. Many service providers are for offering importing services.
There are many reasons to do so. In terms of customs procedures, the company named in the import record will be easier to work with as it is all electronically done. This avoids the problems in the custom.
Select the products for importing. Goods in Thailand always attract a large number of Asian customers and fastidious countries. However, depending on the type of goods, you should choose different import areas. The commonly imported items from Thailand: Clothing, shoes, fashion accessories. Thai motorbike and car spare parts and accessories. Thai seeds; Functional foods, Cosmetic, Consumer products.
Phones, laptops, electronics. In terms of clothes, can look to wholesale markets such as Bobae Market, Pratunam, Platinum. Bobae Market is a market with a long history of textile apparel, so almost has all types of clothing, fabrics, backpacks. For cosmetic products, you can find the Sampeng market in the Chinatown area. The Warachat area is an area where many car dealerships are located, so it often provides accessories and spare parts.
Items here always meet the high quality. Due to the nature of the spare parts in Thailand, the factory does not sell directly to retailers, only purchase through dealers. Directly imported goods from Thailand: To ensure the acquisition of high-quality goods, many small importers now choose to directly import from Thailand.
However, this makes you spend much time, effort, and costs. You may have to spend such as travel expenses, staying expenses, expenses incurred for other items. Besides, when directly importing large quantities of such goods, it is difficult to clearance the goods by yourself. So in this step, you can consider whether to do it or not. You can skip this step if it is not necessary for your importing business. Order goods via e-commerce sites in Thailand: When you want to order goods on your own, you should pay attention.
First; You need to have a delivery address in Thailand. Currently, few Thai sales units provide direct delivery services to take place. If you do not have relatives or friends in Thailand to receive goods, it is hard to make Thai goods orders in this form. This way will have to get the goods receiving and shipping services to help you return home.
Second; You need an international payment card. The amount on the card should be enough to pay for the goods you import. If you do not meet this requirement, you cannot import Thailand yourself. Third: You need to be fluent in the Thai language or English, or use translation apps to understand the product information and make a purchase.
About finding local Thai websites, I recommend using the famous Thai and South East Asia online shopping platforms such as Lazada or Shopee. Apply for the import license: To make a product announcement, you need a letter of authorization from the factory, or a Thai supplier authorizing you to import and distribute this product in your country. Thailand common shipping methods: By Air: Goods will be shipped to the airport closest to the warehouse or workshop in Thailand, and then to the airport nearest to you. Usually applies to urgent orders or small quantities from a few kilograms to several hundred kilograms. Higher shipping cost but faster time.
By Sea: Mainly from some ports in Thailand like Bangkok to your country's port (if available). The volume of goods is unlimited for this freight. But usually, it applies to non-urgent orders, large quantities from one cubic meter to many containers. By Road: Shipping time: depending on the distance of transportation and traffic conditions. Usually applies to non-folded orders, large volumes from one cubic meter to many containers. Pay import tax: Import duties must be paid in your country after customs clearance for the importer to release the imported goods into domestic circulation.
Depending on your country's regulations, you may want to find out how taxes are calculated and what paperwork is required before importing goods. Sure, Thailand is one of the countries that is developing faster than the general public in Southeast Asia. Thais like to do business with people they respect. The relationship develops step by step, based on many contacts and meetings to build trust and affection. Thailand can therefore be a destination for your international business. It is important to familiarize yourself with the local market and conditions, and to have a local partner or advisor to help and advise you.
It's also a good idea to have a local agent who can find clients and introduce key people. So the first step is always to learn and search. Hope this video has given you ideas to make your import and export business better. If you want us to assist you as an agent or consultant for Thailand, Turkey, and other Southeast Asian countries, you can contact our email address in the description part of the video. Thanks a lot for being here.
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