Small business

The 5 Biggest Challenges Foreign Businesses Face When They Expand to Thailand

servcorpThailand is built on a set of values which include tolerance, hospitality and openness. From a business perspective it is important to be aware of these values when expanding in the country. Thailand has it’s own distinct culture, influenced over the years by a diverse range of inputs including Chinese, Buddhist and Hindu beliefs. In a culture that is so different from that of the west, it is important to be aware of the local customs and culture and to respect them.

With more and more businesses setting up virtual offices in Thailand, it’s crucial to stay informed and aware. In order for your business to thrive in the Thai marketplace, you need to ensure that you understand the challenges you will face in terms of Thai business culture and Thai society.

1. Saving Face

The idea of ‘saving face’ is very much a part of Thai society and this extends to the business community too. Thai people will never criticise someone in public and will hold themselves to their word. When expanding into thailand it can be challenging to accept this as the norm, as it is not always the case in other countries. Being culturally sensitive to this is important in succeeding with your expansion into Thailand.

2. The Collective Mindset

In Thailand, the needs of the group are more often than not put ahead of those of the individual. Of course, this is a very different mindset to that of other countries and so again, it is important to be culturally aware. Family plays a pivotal role in thai society and there will often be close ties between families and the extended community. In order for your business to excel, you will need to understand this mindset and connect with the local people in the communities you are operating in.

3. Indirect Communication

Thai communication can often be very subtle quite indirect. There are often unspoken, underlying messages in conversations that can be missed if you are not aware of this fact. This style of communication is often used in business negotiations and so for businesses expanding into Thailand, it is something that you simply must be aware of. It’s essential that you pick up on the non-spoken parts of the conversation to ensure that you have the full story before making any deals or closing any contracts.

4. Red Tape

Starting a business in Thailand takes approximately a month, with four steps to be completed before you are officially in business. You must first register the company name, then deposit the appropriate amount of funds to the bank, get a corporate seal and finally register the company as a legal entity. The steps can be frustrating to deal with but as long as you cross your t’s and dot your i’s everything should be relatively straightforward.

5. Language

Although English is quite widely spoken, especially in the business community, you can run into problems now and then. Always remember to be polite and if you are not sure of what someone has said just ask for it to be repeated. Thai people are very patient and will want to make your experience as pleasant as possible.

Overcome the Challenges

While there is no doubt that there are some challenges associated with expanding your business to Thailand, they are relatively easy to overcome. There is no reason that your business can’t get off to a flying start in the Land of Smiles. Remember to be culturally sensitive, read between the lines and be patient and polite. Everything else will just fall into place.

If you have any questions, please ask below!