Requirements for eCommerce businesses in Thailand
To establish an e-commerce business in any part of the territory, one needs to encompass varied rules and regulations followed by a particular territory. Likewise, Thailand is being contemplated to be known as one of the fastest-growing e-commerce markets in Southeast Asia.
E-Commerce businesses comprise of different classifications which are as follows,
- Business to business (B2B)
- Business to consumer (B2C)
- Business to Government (B2G)
- Consumer to consumer(C2C)
- Direct to consumer (D2C)
E-commerce businesses in Thailand are anticipated to scale up to another level, to connect potential customers constituting live streaming (activities in which operators introduce products via e-marketplaces and social media platforms), DTC strategies, social commerce, and different experiences.
Nowadays, the fundamental market trends are mobile and social commerce which is particularly known as m-commerce. The digital wave has already taken over businesses. however, Thailand procures remarkable atmospheric conditions for e-commerce. Legal necessities are the only prior aspect to be taken care of, which might make you feel like driving on a cramped road.
Provisions that need to be followed by e-commerce industries in Thailand are as follows –
Registration – The first and foremost step is to get your company registered as a business via electronic medium.
License – Under the foreign business license act, it’s necessary for the foreign majority shareholders to get authorized, terms, and conditions applied.
Board of Investment (BOI) promotional techniques, if the marketplace is BOI promoted, products and services would be provided by several third parties. By processing such transactions, the marketplace operator generates revenue from transactions, neither procure tax holidays nor merit-based incentives but authorizes 100% land possession to carry on the promoted activities.
- Within the time period of 30 days, once the business has commenced. It is necessary to apply for an e-commerce business license.
- Specific pricing and payment requirements need to be fulfilled at the time of proceedings.
- Bank of Thailand is consistently assisting supervisions on e-commerce businesses to ensure compliance.
- To apply for the e-commerce business license, the following details are required the website owner.
Name of the website
- Depends on the nature of goods and services being marketed on the website.
- The date at which the website starts/started operating (application should be made within 30 days from the start date).
- Method of payment for the purchase.
- The document evidencing the domain name registration or certification document from the service provider (ISP or web host).
- Any organization handling online credit card payments must be compliant with specific security requirements by the Bank of Thailand.
It’s mandatory to get registered as a direct-sale business under the office of the consumer protection board to protect consumer rights under Thailand’s consumer protection legislation.
If the transaction exceeds 3000 money transfers a year, or at least 400 money transfers and with a total value of 2 million a year, it is mandatory to report all those transactions under e-payment law.
- PromptPay facilitates digital payments via mobile number or Thai Identification card number.
- Standardized QR codes allow distinct modes of payment which constitute a visa, Mastercard, or UnionPay.
- Alipay, Apple Pay, and Cryptocurrencies are widely used as one of the payment systems.
Several commercial and civil agreements and codes are to be conceded under
- Electrical transaction act(ETA)
- Consumer Protection Act
- The electronic transactions development agency(ETDA)
- Computer crime act
- National Broadcasting and Telecommunications Commission
These are needed to be followed while expanding business digitally in Thailand.
It makes sense to expand e-commerce businesses across the country for a wider audience to create a tax-efficient and maintain profitability.
As payment gateways are generally located abroad, tax benefits and lower legislated jurisdictions can lay the first stone outside of Thailand as well.
Under the Thai tax system, the export of goods and services has nearly a zero percent VAT rate.
Legal requirements like custom clearance reports make it hard to take the benefit of the 0% tax rate.
E-Commerce tax law
Under the new e-business tax legislation, all foreign business operators selling goods in Thailand produced abroad via Internet platforms (e.g. brand websites, social media, etc.) are subject to 7% VAT to the Revenue Department.
The business operators are compelled to enroll as a Thai company in order to pay VAT in Thailand.
In Thailand, any online business operators earning that generate more than THB 1.8 million annual sales are accountable to 7% VAT.
Even foreigners who run their businesses physically in Thailand need work authorization.
Standardized rules and regulations are mainly focused on non-Thai customers or foreign headquarters as their clients.
Thailand is convenient for e-commerce businesses. however, several legal requirements are mandatory to be taken care of. Also, Bangkok law firm provides comprehensive consultants and support to avoid misinterpreting any legal facets.
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