As you grow your business, you may at some point want to do business internationally and start an export-import business in Thailand. No matter as an agent or direct merchant, the fact is asian countries nowadays provide both export opportunities for exporters and importing opportunities for the ones who are looking to find new great products for importing and reselling. Thailand is definitely one Asian country to search further.

Expanding your business to Thailand can be a great opportunity. However, there’s a lot to learn – such as finding and validating suppliers, finding the buyers, choosing the right products from the market, organizing deliveries, customs procedures and inspections, etc.

Indeed, “Made in Thailand” products fully meet all strict requirements from consumers: beautiful designs, quality, affordable prices. That’s why many foreign importers choose Thailand to import goods. Regarding pricing level, Thailand is close to China.

You need to understand the Thailand market and local conditions to know how to do an export-import business in Thailand or with Thailand. Our article will give you a good introduction and probably can give you many new import-export business ideas.

Overview about the Thailand as a country

Official name: Kingdom of Thailand

Geographical location: Located in Southeast Asia

Area: 513,115km²

Population: 69.287.408 (2019)

Capital: Bangkok

Language: Thai

Currency: Thai baht (THB)

Advantages of doing business with Thailand

In 2017, the Thai economy continued to maintain growth, in terms of a GDP growth about 3.9%. The Thai government has succeeded in creating jobs, stabilizing incomes, and boosting the economy.

With the recovery of the global economy, government policies, and public spending, and the recovery of manufacturing industries, in the first quarter of 2018, Thailand is growing despite the heavily dependent on exports. Although the growth is still lower than in most countries in ASEAN.

Foreign investors in Thailand assessed that appropriate investment policies, good infrastructure, and competent human resources are the motivations for Thailand to maintain its competitive advantage and success in the economy. Accordingly, Thailand has also higher purchasing power, compared to most of Asian countries.

Thailand belongs to the Association of ASEAN. Inside this union, countries can import products from each other without import taxes. This gives many advantages for the exporters in Thailand. For example, they can import some products from other ASEAN countries (if the price is better) and re-export these from Thailand. Thailand contributes a lot to ASEAN cooperation. A roadmap for deeper integration into the regional economy as the ASEAN Economic Community (AEC) officially comes into force.

Disadvantages of doing business with Thailand

Although Thai has many positive factors, its economy also faces also many challenges. Many of the issues in the economy and its structure come from demographics. Secondly, Thailand’s economy depends heavily on the export and its tourism sector. During the pandemic, these sectors are strongly affected and it causes many problems in the country.

Followings are some general negative factors affecting Thai business attractiveness:

1. Slow recovery of the economy because of the pandemic

2. The fishing industry is subject to a fine imposed by the EU for illegal fishing

3. Gas and oil reserves declined continuously for a decades

4. Decreased agricultural production due to drought

Besides, Thailand faces two problems: one is an emerging economy, the other is demographic issues when the population decreases, reducing the number of consumers, labor, and taxpayers, and the lack of workforce to care for the elderly, which can lead to the higher taxation.

The main export products of Thailand

Thailand has identified exports as a driving force for its economic development, with exports accounting for 60% of GDP. In particular, Thailand identified the following priority product categories, which are: rice, seafood, cars, and auto parts; Products from rubber and machinery parts.

We suggest, if you are starting exporting business in Thailand, then consider some specific products related from Thailand’s main export categories. Also same for the importers. Import products that are related to the most competitive sectors and industries of Thailand. This can help to ensure, you are dealing with the products and industries which has a competitive advantage in the world.

Rice

Thailand is a country that has competitive advantages of growing rice and exporting it. Climate and economical factors are favorable for the rice and rice industry.

In 2019, Thailand exported 7.58 million tons of rice, earning more than 4.2 billion USD. Thailand’s rice exports face difficulties due to the prolonged drought, causing limited supply and pushing up the prices.

Thailand is currently funding a new rice research project aimed at diversifying products and expanding export markets. Developing new rice varieties and reducing production costs to maintain attractiveness to the international market.

With rice, Thailand is competing with another great rice exporter – India. Read also how to start an export-import business in India.

Seafood

Thailand is one of the largest seafood exporters, such as shrimp, processed white shrimp, tuna, etc. As a result, The Thai suppliers have maintained the world’s No. 1 with processed tuna, annual exports of about 450-500 thousand tons, and more than 150 markets. Thailand’s major export markets are the EU, US, Japan, and China.

In the Japanese market, Thailand is the leading supplier of processed white shrimp. If you are planning to do business with Japan, then definitely consider this category.

Cars and auto parts

Thailand is a country that has a competent and lower cost workforce, low-cost energy, supportive infrastructure, strong metalwork industry. All this is a good foundation for the auto and car parts industries. Many famous car brands have set up their factories in Thailand.

Cars

Thailand is currently the 12th largest automobile manufacturer in the world and the largest in Southeast Asia.

In the first five months of 2020, Thailand sold 270,591 vehicles. Of the total output, Thailand produced 20,070 vehicles for the domestic market and 35,965 vehicles for export.

Auto parts

Thailand has about 2,000 companies supplying parts and car components in Thailand, including 700-800 companies under FTI. Besides, more than 80% of auto parts are for the domestic market, only 20% for export to foreign countries.

Rubber products

Thailand has become the largest rubber exporter, with China being the largest consumer with an export turnover of US $ 1.96 billion. In 2018, Thailand’s rubber export turnover reached more than US $ 4.6 billion, accounting for 1.82% of the country’s total export turnover. Thailand is competing with Indonesia with rubber products.

Read also: How to start an export-import business in Indonesia.

Iron and steel.

The Thai steel industry has been facing low-cost products from China for a few years ago. To protect domestic production, the government imposed anti-dumping and protection measures on imported steel, mainly from China and Russia.

Sugar

Thailand is the leading sugar producer in ASEAN, the second-largest sugar exporter in the world. The Thai Government has many direct and indirect policies to support domestic sugar production. Thai sugar is based on fruits.

The main import products of Thailand

Agriculture products

Along with fresh fruits, Thailand has an import demand for vegetables such as: carrots, potatoes, and herbs. A lot of these vegetables are being imported from India and also China.

Whereas, In 2019, Thailand imported more than 3 billion tons of fresh fruits worth about $ 1 billion, 850 million tons of vegetables, worth about 600 million USD. This data shows that Thailand is a potential market for importing agricultural products.

Fuels

Thailand develops the downstream sector based on domestic and imported gas, which helps Thailand create enough goods to meet domestic needs and gradually become a leading exporter of petrochemical products in Southeast Asia.

How to start exporting to Thailand

Starting an exporting to Thailand includes the same steps as in other countries, just the local specifics should be considered. We also recommend having a local partner or at least a business consultant from Thailand. Planing and export marketing are keys to success.

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Step 1: Actively research the market

Exporters should be active when participating in the market to find customers and prepare the sources of goods.

Thai consumers are curious and ready to try new products and new experiences. You can promote your brand in the Thai market through product showcases or at Thailand’s distribution channels, trade programs, agents. Important is to get direct feedback from possible customers.

During the market research phase, it is crucial to collect information about the products which could have demand in Thailand. After the feedback, you as an exporter can adjust your strategy and change the focus if required.

Step 2: Prepare the documentation for exporting goods to Thailand

Regarding export-import documents, at least five sets of commercial invoices are required. The commercial invoice should include (country of origin, country of import, date of purchase and sale of goods, packaging method, labels, the total number of packages, information description of goods, selling price). The bills of lading should include the following information (shipper, the last consignee, and intermediary agents, labels and numbers of packages, other details about the importer).

Regarding packing slip, including certificate of origin, a special certificate, import permit, export license.

PS! Products banned from import from Thailand are tobacco, arsenic/phosphorus sulfide, chemical ethylene dichloride, thallium-containing waste, and scrap.

Read more: Export documentation and procedures.

Step 3: Declare the invoice of the value and quantity of goods for tax calculation

In Thailand, it is usual for the supplier, importer or producer to, declare the value and quantity of goods for tax calculation. This is for the local, thai exporters and importers, not applicable for the foreign exporters from other countries.

However, the customs office can re-evaluate the goods to re-calculate the tax if the declarant has declared lower than the actual market value.

The taxes are imposed by Thailand as follows

Medical equipment and fertilizers (0%), raw materials and electrical equipment (1%) mean of production and input materials for production ( 5%), semi-finished products, intermediate goods (10%), finished products (20%), items “in need of special protection” (30%).

Besides, Thailand also prioritizes investment through the exemption and reduction of import tax from 50% – 100% for machinery and equipment for each locality and for each project.

The import of raw materials or special materials used for export for 5 years is exempt from import duties, depending on the investment projects of each locality.

Value Added Tax

(VAT) applies to all goods and services in all areas of activity related to the manufacture of goods; For imported goods, VAT is refundable.

Most services are subject to VAT except for some services. Books and newspapers are exempt from VAT. Thailand’s VAT rate is currently 7%.

Step 4: Check the packaging and the labeling before exporting

Packaging 

should be made of secure materials and resistant to heat and moisture. Exporters should also pay attention to the possibility that the goods will be stored in an open space, so the packaging should use waterproof material. Dry grass and straw should be avoided as packaging.

Labels

The Thai government has very strict labeling rules for dairy products, baby food, canned food, vinegar, soft drinks, cooking oil. Labels of food products must be licensed by the Food and Drug Administration. 

When conducting the application process, for each product, the exporter must submit two samples of the product, specify the percentage of each ingredient and compound contained in that product, and submit 06 product labels. 

Custom requirements in Thailand

Food exported to Thailand must be labeled with clear information such as name and brand; license number; name and address of production; name and address of exporter; date of manufacture and expiry date; quantity and net weight; User manual. 

For drinks, the label must show the percentage of the alcohol contained in the product, warnings about harm to health when using the product (if any), and must print in Thai. 

For cosmetics, the label must be in Thai and specify the following information: the name of the cosmetic type; name and address of the manufacturer; User manual; ingredients in the product; Side effects when using the product (if any).

Regulations on food hygiene, safety, and quarantine

in Thailand are relatively strict. Ministry of Agriculture and Cooperatives of Thailand (Department of Food and Agricultural Product Standards – ACFS) is responsible for managing the quality of agricultural products, spices, poultry, etc. 

Thai agriculture Standard (TAS) includes standards of safety and epidemiological hygiene for human and animal health.

Plant and animal nuts require a quarantine certificate issued by the competent authority of the country of origin to ensure product quality. Meat products need to have a veterinary safety certificate signed by local authorities in the country of origin. 

Raw materials (animals) must be certified to meet the veterinary quarantine standards. 

Products must be suitable for consumer needs and contain no preservatives, additives or antibiotic residues, plant protection agents, weight gainers, growths … in excess of the permitted level which is not endangering human health. 

Pharmaceuticals must be issued a certificate of circulation in the exporting country before bringing the product to Thailand and subject to strict control.

Pets Risk Analysis – PRA

Some fruits such as dragon fruit, longan, litchi, and mango, when exported to Thailand, need to have a certificate of the production process to ensure disease safety standards (Pets Risk Analysis – PRA). This certificate is issued by the Department of Agriculture (Ministry of Agriculture and Cooperatives) after the pest risk assessment has been carried out in a strict procedure with criteria for production and processing, chemicals used, disease treatment process …

For fresh seafood products exported into Thailand, exporters are required to register the import and shipping information with the authorities at the Fishery Single Window System (FSWS) portal. 

Some types of shrimp and products on the list of rare and precious goods are in the category of items subject to special inspection. 

Businesses exporting white leg shrimp, black tiger shrimp, and giant freshwater shrimp should register with the authorities about the location of storage of goods, a health certificate (for fresh goods), and sample products for testing. The sample inspection process takes an average of 30 days.

Additional reading: Risks in the Export-import business and how to manage these.

Step 5: Check the shipping rates and choose the service provider

Exporting goods to your Thailand partner can consist of the following stages:

• Before signign the order, discuss with your Thai customer first, to make sure all the requirements and needed documents for exporting. Make sure all the requirments can be met.
• Your supplier pack the goods into a container or on the truck. Should provide to you the packing list, proforma invoice, certificates.
• logistics company or freight forwarder arranges, pick up and delivers the goods to the Customs warehouse. Custom may want to fo inspection of the goods.
• You or your frowarder or logistics partner fill the export delcaration and provides the required documents to your home country customs authorities. Also the Certificate of origin should be applied.
• After customs has been finished, the goods are free to be loaded on the ship or to the airplane (if air delivery). Your freight forwarder or logistics company should book the departure advance.
• After goods loaded on the ship, or airplane, you can get the original Bill of landing or Airway bill.
• Original bill, commecrical invoices, packing list, insurance, product certificates you can send to your Thai partner. They need these to clear the import customs, afte the goods arrive there.

Check the price of the shipping services

If you want to be advantageous when asking for prices and comparing shipping service prices, you need to know the following tips:

Knowing specialized terms (INCOTERMS)

Knowing the list of international shipping costs,

Only ask for the shipping cost maximum of 3 suppliers.

When writing the mail asking for prices, you should write to each individual supplier, not BCC (Blind carbon copy) because the supplier will know that this customer is asking prices everywhere.

Detailed cargo information

If you want to get a good price from a carrier or FWD, you must provide complete shipment information such as name, weight, packaging, number of packages, size, date of goods, expected departure.

Choose a forwarder

Do not try to export without a specialized freight forwarder. Forwarders are intermediaries in charge of arranging shipment and often they can also help you with the customs procedures.

A lot of problems can be happened, for international shipments – especially for beginners. A good forwarder will take care of almost all organizational steps and solve all the stressful and complex tasks. 

For example, they will arrange a booking at the Main Leg stage with an airline or a shipping line as well as (depending on your incoterms) at the pick-up stage (Pickup). 

They will handle all the hassle of filing and customs clearance, including tariff advice. They may also have more management experience than a local shipping company in delivery.

We have a guide and resources list for exporters and importers and there you can find some reputable logistics and forwarding companies you can contact with.

How to import goods from Thailand to your country

Many people may be interested to import goods directly from Thailand. Especially people from nearby countries like Korea, India, China. The following will give important aspects you should consider when planning to import some products from Thailand.

Depending on the regulations of your country, individuals may or may not be allowed to import goods from other countries for business (depending on the number of goods). However, if you want to work for a long time, you should set up a company to import or use import services. There are many service providers who are offering importing services.

There are many reasons to do so. In terms of customs procedures, the company named in the import record will be easier to work with as it is all electronically done. This avoids the problems in the custom.

Read also: How to import goods from China.

Select the products for importing

Goods in Thailand always attract a large number of Asian customers and fastidious countries. However, depending on the type of goods, you should choose different import areas.

The commonly imported items from Thailand:

– Clothing, shoes, fashion accessories

– Thai motorbike and car spare parts and accessories

– Thai seeds

– Functional foods

– Cosmetic

– Consumer goods

– Phones, laptops, electronics

In terms of costumes, clothes can look to wholesale markets such as Bobe Market, Pratunam, Platinum. Bobe Market is a market with a long history of textile apparel, so almost have all types of clothing, fabrics, backpacks, bags. 

For cosmetic products, you can find the Sampeng market (China town area).

The Warachat area is an area where many car dealerships brands such as Toyota, Nissan, Ford, Jeep, GM, Isuzu, Suzuki, are located, so it often provides accessories and spare parts. Items here always meet the high quality. Due to the nature of the spare parts in Thailand, the factory does not sell directly to retailers, only purchase through dealers.

Directly imported goods from Thailand

To ensure the acquisition of high-quality goods, many small importers now choose to directly import from Thailand. However, this makes you spend much time, effort, and costs. You may have to spend such as travel expenses, staying expenses, expenses incurred for other items.

Besides, when directly importing large quantities of such goods, it is difficult to clearance the goods by yourself. So in this step, you can consider whether to do or not. You can skip this step if it is not necessary for your importing business.

PS! Because of the current Covid-19 situation in Thailand, it is not easy and reasonable to physically travel there and carry the goods. We suggest avoiding this until the situation normalizes.

Order goods via e-commerce sites In Thailand

When you want to order goods on your own, you should pay attention:

• You need to have a delivery address in Thailand. Currently, few Thai sales units provide direct delivery service to take place. If you do not have relatives or friends in Thailand to receive goods, it is hard to make Thai goods orders in this form. This way will have to get the goods receiving and shipping services to help you return home.
  
• You need an international payment card. The amount in the card should be enough to pay for the goods you import. If you do not meet this requirement, you cannot import Thailand yourself.

• You need to be fluent in the Thai language or English (or use translation apps) to understand the product information and make a purchase.

About finding local Thai websites, we recommend using the famous Thai and South East Asia online shopping platform Lazada.

Apply for the import license

To make a product announcement, you need a letter of authorization from the factory or a Thai supplier authorizing you to import and distribute this product in your country.

Shipping from Thailand

By air:

Goods will be taken to the airport closest to the warehouse/workshop in Thailand and then taken to the airport near you.

Usually applies to urgent orders or small quantities from a few kilograms to several hundred kilograms. Higher shipping cost but faster time

By sea:

Mainly from some ports in Thailand such as Bangkok or Leam Chabang to your country’s port (if any)

The volume of goods in this freight is unlimited. But usually applicable to non-rush orders, large volumes from 1 CB (m (cubic meters) to many containers.

By road:

Shipping time: Depending on the distance of transportation and traffic situation.

Usually applies to non-fold orders, large volume from 1 cbm (cubic meter) to multiple containers.

Pay import tax

Import duties must be paid in your country, after customs clearance so that the importer can bring the imported goods into domestic circulation. (Depending on the rules of each country, you should learn how to calculate taxes and paperwork needed before importing goods)

Conclusion

Thailand is one of the countries developing faster than the common ground in Southeast Asia. Thais like to do business with people they respect. The relationship progresses step by step based on many contacts and meetings to strengthen trust and affection. Thailand can, therefore, be a destination for your international business.

It is important to learn local market and conditions and have a local partner or consultant helping and advising you. it is also a good idea to have a local agent who can find customers and introduce important people. So, the first step is always learning and searching.

Countless import and export programs give you more options, without the knowledge and experience, it is difficult to choose the right course.

If you want to learn how to start your own export-import business online or offline, then we have online courses and programs which will give you the best guide to start an international business from scratch. We have also tools and resources which help you to grow and expand your business and get more customers and raise profitability.

You are advised to take courses and use the resources ad tools listed below:

• Export-import business courses and programs
• Most popular online exim course: “Zero to first deal“
• Resources and action plan for exporters/importers, online sellers.