If you are a foreign investor looking to establish a travel agency in Thailand, you should know that the tourism sector is one of the most profitable industries in this country. Thailand is one of the top locations to visit for adventure purposes but also for its cultural heritage. Many people enjoy visiting Bangkok while others travel to the country in search of beautiful beaches, made famous by international movies. Whether it is for the local culture, the beach resorts, the gastronomic experience or the entertainment (some of Thailand’s beaches are famous for their parties), Thailand remains a top tourist attraction and investments in this business sector are bound to be some of the most profitable.
Company formation in Thailand is subject to a set of rules and regulations, especially when these investments are primarily foreign-made. While the government has continued to liberalize business sectors, the Foreign Business Act remains the main legal resource for all foreign entrepreneurs willing to start a business in the country.
The travel and tour guide sector in Thailand is regulated by the Tourist Business and Guide Act. In order to be able to open a travel agency in Thailand, the company has to acquire the Tourism Authority of Thailand (TAT) license with the Tourist Business and Guide Registration Office.
Summarized below are the main steps for starting a travel agency in Thailand:
- Incorporate a company: the limited company is a business form that is commonly used by those who start a travel agency; at least three founders and shareholders are required and foreign company is one that is either not registered in Thailand or one that is registered in the country but has a foreign shareholding of 50% or more; one of our agents can give you more information about the treatment of foreign legal entities.
- Obtain the needed license: because this business field is regulated, the application for a TAT license needs to take place as instructed by the Thai authorities; one of our Thai company formation agents can help you make the necessary submissions.
- Set up the office space: this is commonly done by renting office space in the desired location; travel agencies can also offer their services online, however, maintaining a physical presence in highly-transited tourist areas has the potential to bring more clients, especially if the company offers targeted packages.
- Start the business activities: the new travel agency can now start its business activities and can start selling travel packaged to its clients; it is up to the company owners what packages they offer and whether or not they choose to focus on one or several types of services.
The formalities for setting up a company can seem somewhat overwhelming to foreign investors because of the language barrier. Our team of Thailand company formation agents can help foreign investors interested in starting a business in tourism. We can handle all of the necessary submissions, starting with preparing the company incorporation documents, and perform some of the procedures on behalf of the foreign investor, when possible through a power of attorney.
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Requirements for the TAT license applicants in Thailand
In order to establish a travel agency in Thailand, it is recommended to open a juristic entity like a limited company. In order to receive the TAT license, the applicants must meet the following requirements:
• The company registration process in Thailand must have been effectuated;
• The company should have an office in the country;
• At least 50% of its managers should be citizens of Thailand;
• At least 51% of the company shares have to be owned by citizens of Thailand;
• The M.D. (Managing Director) should be at least 20 years of age, living or residing in Thailand, able to acquire credits, in his or her full capacities, never imprisoned except for negligence or minor offense;
• The company should never have had a Tourism License suspended;
• The company should not have had a Tourism License revoked, unless it was revoked for more than three years.
Documents necessary to apply for the TAT license in Thailand
The documents necessary to apply for the TAT license in order to establish a travel agency in Thailand are:
• TAT license application form, signed by one of the Thai directors and stamped with the company seal;
• The Certificate of Registration and objectives of the business, according to the Civil and Commercial Code. Our company registration professionals in Thailand can provide more details on this matter;
• A list of the company shareholders, certified by the Minister of Trade;
• The regulation or report of the business establishment’s meeting, certified by the Minister of Trade;
• A copy of the director’s personal ID card and his registered address, certified by the director;
• Seal of the business;
• Two front office photos;
• An office map;
• Ownership or possession proof of the office;
• Power of Attorney;
• Guarantee, with cash or cashier’s check, used as security.
Conditions for travel agencies in Thailand
All companies in Thailand are required to register with the Department of Business Development and the Revenue Department. For companies that are subject to corporate income tax, such as a private limited company – a business form that can be used to open a travel agency – it is mandatory to obtain a tax identification number from the tax authorities within 60 days of the registration.
For private limited companies, the minimum share value of 5 THB and the company must have at least three shareholders (at all times) and at least 25% of the share value is to be paid in when registering the company. The directorship of the company should maintain a specific ratio of foreign/Thai nationals and when a foreign national is hired to work for the travel agency, he or she must have a valid work permit. More on these requirements for work permits and the conditions for hiring foreign staff for a travel agency can be found by getting in touch with one of our Thai company formation agents.
A travel agency in Thailand is subject to the general taxes for companies applicable in the country such as the corporate income tax, the value-added tax, stamp duty, withholding taxes, social security contributions, and others. The standard corporate income tax rate is 20% and the standard VAT rate is 7% with a 0% rate also applies for certain types of goods and services. Companies that have an annual turnover of less than 1.8 million THB are exempt from VAT. The tax year is generally the same as the calendar year: it ends on December 31. Companies are required to follow a self-assessment system where they declare their income and must follow an annual corporate income tax return. The filing deadline is within 150 days from the end of the accounting year and the tax must also be paid at the time the filing is made.
Travel agencies in Thailand are expected to meet the accounting principles (including, but not limited to filing annual financial statements), as well as observe the corporate tax filing and payment, along with the payment of the other relevant business taxes. Our accountants in Thailand offer services to all types of companies, irrespective of the business field in which they activate. You can reach out to us for a compete list of our services.
A travel agency in Thailand can benefit from trademark registration. Our agents can assist you during this process.
Thailand’s popularity as a tourist destination is due largely to its climate and the fact that it offers two distinct and equally beautiful types of landscape to tourists: the sunny beaches to the south and the cooler mountain regions to the north. Investors can open a travel agency in either of these regions, based on the types of services they wish to provide. Once the business expands, a travel agency can open several offices throughout the country so as to cover the needs of a wider range of tourists.
For more details about how to set up a travel agency in Thailand, we invite you to contact our Thai company formation advisors. They can offer you a wide range of corporate services, from virtual offices to assistance when opening a bank account in Thailand.