How to Open a Retail Store in Thailand?

Submitted by tilaadmin on Tue, 03/29/2022 - 18:13
Are you interested to set up a retail store in Thailand? Chances are that you have made enough research on potential business ideas on this foreign land and opening a retail store appeared the most relevant option to you. However, before proceeding ahead, you may need to collect a few essential tips from experts to start your business with confidence.

As a foreign investor, you may find two main options to start a retail store in Thailand. You can either buy a store in the target market or look for a rental option to launch your business. If you have enough capital, buying a store or land for constructing a retail store will definitely be a great idea. It will give you more freedom to design a store of your choice without worrying about restrictions posed by landlords. Even if you have a plan to move to some other location in the future, you can rent out this space to avail yourself of consistent income. But the only downside of this decision is that it requires you to make a huge investment in terms of a down payment.

In general, the estimated loan to value ratio in Thailand is 80% for any commercial property. However, most of the banks may lend money on a 70% ratio. It means you have to make arrangements for the 30% value as a down payment and agencies do not allow you to utilize CPF money for this purpose. Therefore, you have to make a clear analysis of how much capital and debt you have so that you can set up a new business without any financial burden.

On the other side, for rental payments, you will have two main options. The businesses can either follow a fixed rental payment model or a dynamic payment option. Many store owners even ask for a mixture of both models which is more suitable for a new business. It involves a certain amount as a fixed payment and some percentage of monthly profit as a dynamic payment. It may help new business owners avoid excessive financial burdens.

Essential legal requirements to start a retail store in Thailand:

The laws of company registration Thailand vary from state to state. Therefore, new entrepreneurs need to consult professionals at local area departments to avail more information on licensing and business operations. In general, below legal guidelines are required to be followed:

• Insurance policies

• Federal employment identification

• Business license, depending upon the type of niche.

In most of the areas, depending upon the type of niche product, the retail store will be audited and inspected by the department of health as well as the department of fire before beginning the operations. It helps them to ensure that foreign business owners are following local rules and regulations in a more effective manner.

Other than this, retail stores also need to perform detailed analyses on demographic regions and requirements of local populations. It may help them to choose the most relevant niche area while ensuring desired outcomes from the business.

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