Trading in Thailand - 7 Important Must-Knows

Trading in Thailand - 7 Important Must-Knows
The Siliconreview
01 September, 2020

Commonly referred to as the Land of Smiles, Thailand is an up and coming business destination in South East Asia. While the capital city of Bangkok is the main place to do international business in the country, Thailand is also renowned for its tourism industry (on the islands) and agricultural industry (predominantly in the north). Therefore, it’s wise to do some research into the different areas you may be visiting on your business trip.

What should you expect from a business trip to Thailand?  Keep reading, as we’re going to provide you with the important must-knows that will hopefully lead to you leaving with a successful business contract and not hanging your head in shame due to a faux pas.

1. Respect the King

Before we discuss anything related to doing business in general, there is one important point that you must know: you must respect the Thai King and the royal family in general. The previous King of Thailand, Bhumibol Adulyadej, died in 2016 and his reign passed over to his son, Maha Vajiralongkorn. No matter what their feelings about politics in Thailand, all Thai people have heaps of respect for their king and their royal family and any disrespect shown towards them could lead to you not only losing a business contract, but it could also lead to you being banned from the country or even sent to jail for a period of between three and fifteen years. All businesses in Thailand have a photo of the King on the wall, and the photo must be higher than any other photo in the room. This is something to keep in mind if you open a business in Thailand and invite Thais to your premises.

2. Thai National Holidays

In the same way that most countries have bank holidays and public holidays, Thailand also has a number of national holidays. To give you a brief rundown, however, Thailand has 13 national holidays each year. These include Thai New Year (otherwise known as Songkran) and the King and Queen’s birthdays. On these national holidays, all businesses are expected to completely shut and employees are given the day off. If the national holiday happens to fall on a weekend, the next working day is treated as the national holiday where business opening hours are concerned. It’s important to make note of this as even if you do not have any employees in Thailand, no business meetings will take place on a national holiday.

3. Hierarchy is Important

In Thai business culture, hierarchy is important. In the same way that you will be expected to show respect to the King, it’s also important to show respect for elders. When you visit Thailand for meetings, take the time to make the elders you meet feel special. Not only will this paint you in a good light, but it is also these who will be making the final decision on whether or not to do business with you. In fact, business decisions in Thailand are very rarely made by people working in junior or middle management jobs. Unless they have done business with a lot of foreigners before, too, you may also be asked some questions that seem a bit odd as your associates try to work out where in the hierarchy you fall. So, if you’re blatantly asked about your wrinkles, how long you have been in the workforce, or even how old you are, try not to take offence.

4. A PEO Could Be Extremely Useful

If you plan on opening up a company in Thailand, and employing Thai staff, there are a number of legal steps you’ll have to follow, as well as laws that you need to be aware of regarding the amount of hours an employee can take, holiday pay, sick leave, maternity and paternity leave etc. A PEO (Professional Employer Organization) can help you with all of the above, helping to ensure you are operating above board and meeting all your legal requirements. You can find out more on this site. Not only can a Thailand PEO & EOR provider like Global Horizons help you with the legal requirements, they can also help you to onboard new employees without needing to establish a branch office in the country. It’s ideal for businesses who are unsure of their growth potential yet want the option to be able to scale up if required.

5. Personal Relationships are Key

Business relationships develop very slowly in Thailand, which may not be what you are used to. Most Thai businesspeople prefer to find out more about who you are as a person and build a friendship before they will even consider talking about business opportunities. The first meeting that you will have with another business person will likely not take place in their office, but rather over drinks or a meal. Some will even invite you to their house for a meal or to meet their family. If this happens, it’s polite to take a basket of fruit or a small gift of chocolate to show your appreciation. Also, don’t feel down if your gift is put to one side and seemingly forgotten about. Thais do not open gifts in the presence of the giver. This is something to keep in mind if you are presented with a gift too.

6. Saving Face is Big

Laughter comes just as easily as smiling to the people of Thailand. However, one thing that you never want to do is let a Thai person lose face (look bad in front of their colleagues). If you notice a business associate continues to laugh for longer than is necessary, it could be a sign that they are embarrassed and are unsure how to respond. Thai people will avoid confrontation at all costs, so change the conversation topic quickly to eliminate any awkwardness or lost opportunities. In addition, it’s important to note that providing criticism in public is a terrible idea. If you want or need to say something that will come across as critical, do this in private and out of earshot of anyone else in the business.

7. Don’t Jam Pack Your Schedule

Finally, while this tip will not apply to everyone – as it really depends on which area of Thailand you are traveling to – it’s worth mentioning if you are doing business in one of the big cities like Bangkok. Traffic in the cities is terrible, and while getting around by motorbike taxi is an option, if you plan on arriving to your meetings in style – and via a traditional car – you’ll need to plan for delays. Don’t plan more than two meetings per day and give yourself at least an hour’s leeway to arrive at your destination in plenty of time. If you do arrive earlier than required, you can always take some time to explore the city or enjoy some delicious treats from the street food stalls that are dotted all over the city.

Thailand is currently going through a growth stage with a strategy now in place to encourage more international business. However, the Thai population is still very traditional and it is imperative that you are aware of the customs if you want to leave the country with a deal under your belt.