There are some massive advantages to running your business as a BOI company in Thailand. If you’re starting up a software business, need a lot of a lot of programmers, and face high upfront costs — it can be a phenomenal way to bootstrap!
Our experience has mostly been in creating and building high growth tech companies. Business that are completely online, tend to take lots of investment, focus on rapid iteration and growth, built by engineers and designers...
Historically we’ve always run these businesses from Silicon Valley or New York, but today we’re going to fill you in on how the Thai government has made it increasingly attractive to run your tech-based business from Thailand.
The Thai BOI opportunity
The Thai government has recently introduced a special kind of business called a BOI (Board of Investment) business that helps you invest in and open companies in the country.
The framework was specifically designed to promote investment, attract innovation and technology from around the world, and ultimately drive economic growth for Thailand.
Here’s a breakdown of the many benefits to becoming a BOI company and why you should consider:
#1. Tax advantages
The number one reason is the tax advantages. It you apply and qualify for a BOI in Thailand, the government will give you anywhere from five to eight years where you pay ZERO corporate taxes! So if you have a startup that raises a decent amount of funding or your company finds an early path to revenue, you have significantly less pressure on your runway and margins.
#2. Work permits
Anybody that’s started a business in the United States and tried to hire programmers knows that bringing in foreign talent is very, very difficult. When you need lots of programmers, you need H1-B or E2 visas, and they can be incredibly difficult, costly, and time consuming.
Other countries like Canada have made it slightly easier, but if you’re starting a tech business in Thailand, you basically get access to unlimited work permits for foreigners to help bootstrap your business.
This has been incredibly helpful in some of our ventures as we’ve needed to hire talent from Morocco, Europe, America, etc — and bring them all into one office for those scenarios when a remote team just isn’t as efficient.
#3. Personal income tax
On top of the fact that Thailand doesn’t charge you business taxes for the first five to eight years, Thailand has one of the lower tax rates across the world.
We've talked in other articles and videos about managing tax rates between your home country and where you happen to be living or starting a company, but for Thailand be paying anywhere from 15% to 20% personal taxes on income. Compared to America or Europe, where you could be paying 40% or 50% on taxes, this is a huge win in the short-term.
#4. Lower cost of living
It’s about a third of the price to rent an office in Thailand when compared to markets like New York. Moreover, that office in Thailand will probably be far nice, even at a fraction of the cost.
You can rent a gorgeous condo in a high rise building with all of the bells and whistles — a pool, a door man, etc. It would be virtually impossible to afford those things in a place like London or San Francisco on a shoestring startup budget.
But in Thailand, you can live a legitimate luxury lifestyle while bootstrapping your startup and not breaking the bank.
We’ve met a number of startups that were originally based in Europe and were running low on funds, so they relocated to Thailand for a year or two and were able to extend their runway quite significantly.
#5. Local talent
There isn’t a ton of local talent in Thailand. It’s a young, hungry, and tech-savvy population. And when you do find local talent, the prices are drastically cheaper than a place like San Francisco.
In Thailand, a programmer can make anywhere from $2,000 to $4,000 a month, whereas it wouldn’t be uncommon to pay 12-15x that in the U.S.For a startup in the bootstrapping phase, this can be an amazing way to ramp up in the early days.
On top of that, you are able to afford things that we no longer have in the U.S., like having secretaries and personal assistants being able to manage some of the day-to-day so you can focus on just building your business, and not running around doing the more menial tasks.
#6. Collaborative government
As a BOI company, the government works with you, not against you in many of cases. So if you have any kind of business that has to import or export goods, you will get major exemptions or reduction of duties. For instance, if you need to import lithium or some kind of mineral that is an input into your manufacturing process, you can get incredibly low import tariffs on those items... AND then be paying very low taxes when you turnaround and sell them to the global markets.
That also gives you a big advantage if you are selling products into the local market. External businesses from China or other countries will have to pay much higher duties to sell into Thailand, so you have a built-in competitive edge to bootstrap a business and grow it from within the country.
#7. 100% foreign ownership
In Europe or the United States it’s very typical that foreigners can fully own businesses. However, that’s not always the case in Asia, particularly even in Thailand. Typically foreigners are limited to owning 50% of a given business and forced into pursuing some kind of joint venture.
With a BOI business, you get full and absolute ownership of the entity. All of the directors and owners can be 100% foreign, if that makes sense for the organization.
What about the negatives of a BOI company?
Language barrier — obviously, you’re going to have a bit more of a communication barrier in a place like Bangkok. Still lots of people speak English, but that’s always going to be kind of a bit of an issue.
Access to capital — thought things are shifting, most of the investor money is still based in the United States, particularly places like Silicon Valley and New York. If you can grow your capital somewhere else and then you can say, “Hey, look we’re going to get 10X the value, we’re going to get 10X the runway if we come out to Southeast Asia, it can be very good.” If you’re bootstrapping with your own cash, it’s amazing, because if you’re using your own money, you’re really going to be very particular about how every dollar is spent, and Southeast Asia is going to be way better place for them.
Minimum investment — the other downside to getting a BOI is that they’re going to want to see somewhere between a $100,000 to $150,000 investment within the first year. If you’re really running a high growth tech venture, that’s not actually a lot of money... usually a seed round or so. However, if you’re more barebones bootstrapping and it’s just you and a small team, then that is not quite as viable. That said, if you’re only bootstrapping, you probably don’t need to hire employees, so don’t need to worry about many of these problems.
Is a BOI company right for me?
There are some massive advantages to qualifying as a BOI company in Thailand. If you’re running a software business, need a lot of a lot of programmers, and face high upfront costs — it can be a great way to bootstrap.
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