Exploring E-Commerce in Thailand: Legal Insights and Compliance 

What is E-Commerce in Thailand?

E-commerce in Thailand involves conducting business transactions online, typically over the Internet. This includes transactions between businesses and consumers (B2C) as well as between businesses (B2B). The quick growth of internet access and mobile technology has positioned Thailand as a key player in the e-commerce market, with a major contribution from mobile commerce (M-commerce).

Types of E-Commerce in Thailand

E-commerce in Thailand can be categorized into several types based on the nature of transactions and the platforms used. Understanding these types is crucial for businesses looking to enter the market, as each type offers unique opportunities and challenges.

1. Business-to-Consumer (B2C) E-Commerce in Thailand

• Business-to-consumer (B2C) involves direct sales from businesses to consumers. This sector has grown significantly due to the rise in online shoppers, with electronics, media, toys, food, personal care, fashion, and furniture being the top categories.

2. Business-to-Business (B2B) E-Commerce in Thailand

• Business-to-business (B2B) involves transactions between companies. This sector is crucial for the supply chain and includes bulk orders of raw materials, components, and services. B2B e-commerce helps businesses streamline operations and reduce costs.

3. Electronic Marketplaces (E-Marketplaces) in Thailand

• • Electronic marketplaces (EMPs) are online platforms where third parties sell goods and services. In Thailand, popular EMPs include Shopee, Lazada, and HomePro. These platforms allow businesses to reach a wider audience without needing their own online store.

4. Social Commerce in Thailand

• • Social commerce involves selling goods and services via social networks like Facebook, Line, and Instagram. This type, specifically, is gaining traction in Thailand, offering businesses a direct way to engage with customers through social media platforms.

Legal framework in Thailand 

E- commerce in Thailand has a strong legal framework for protecting consumers, ensuring secure transactions, and attracting foreign investments. Key aspects include specific laws and incentives for businesses to operate legally and efficiently. Here are some critical elements of Thailand’s regulations:

• Foreign Business Act (FBA)
  • The Foreign Business Act (FBA) governs foreign investments in Thailand, including e-commerce activities. Foreign investors must comply with the FBA, which restricts certain business activities for foreign entities unless they obtain a Foreign Business License (FBL).
• Investment Promotion by the Board of Investment (BOI)
  • The Thai Board of Investment (BOI) offers various incentives to attract foreign investment in sectors deemed beneficial for the country’s economic development, including e-commerce. These incentives include:
    • Tax Incentives: Corporate income tax exemptions for up to eight years, based on expenditures on newly employed local IT staff, training expenses, and quality system certifications.
    • Import Duty Exemptions: Exemptions on import duties for machinery, servers, and raw materials used in research and development (R&D) and production for export.
    • Non-Tax Incentives: Benefits such as 100% foreign ownership, land acquisition rights, and streamlined visa and work permit processes for skilled foreign workers.

What are the licenses needed ensure legal opperations?

E-commerce in Thailand requires various licenses to ensure legal and smooth operations, protecting consumers and adhering to national regulations. Here are the key licenses needed: 

1. E-Commerce Certificate: Must obtain an E-Commerce Certificate from the Business Registration Office within 30 days of starting operations. This certificate is mandatory for online sales and EMPs, and failing to obtain it can result in fines.

2. Direct Marketing License: Must obtain a direct marketing license from the Office of the Consumer Protection Board. This ensures compliance with consumer protection laws and typically takes up to 60 days for approval.

3. Goods Delivery Permit: Companies delivering goods not sold by them must obtain a permit from the Department of Land Transportation, which is only issued to Thai companies with over 50% Thai ownership. Exceptions apply for motorcycle deliveries. If using third-party delivery services, no permit is needed, but compliance with regulations is required.

Incentives for E-Commerce in Thailand

The Thai government provides various incentives to encourage the growth of e-commerce. These incentives aim to attract foreign investment, boost the economy, and promote the development of digital infrastructure. Key incentives include:

• Tax Incentives: Corporate income tax exemptions for up to eight years, based on expenditures related to newly hired Thai IT personnel, training programs, and obtaining quality system certifications.
• Import Duty Exemptions: Exemptions on import duties for essential machinery, servers, and raw materials used in R&D and export production.
• Non-Tax Incentives: Benefits such as 100% foreign ownership of companies, land acquisition rights, and simplified visa and work permit processes for skilled foreign workers and experts.

E-commerce in Thailand offers significant opportunities for local and foreign investors. Benoit & Partners can assist you with personalized consultations, navigating the legal framework, obtaining necessary licenses, and maximizing investment incentives. Contact us and ensure your business operates smoothly and efficiently in this landscape.