Exploring Startup Concerns

[gazz]

Hi all,

I'm looking for matters of concern regarding the following scenario:

I have a relative who runs a manufacturing plant in North America that has proposed to ship bulk goods to Thailand for assembly, packaging and shipping worldwide. Packaging would be sourced and produced according to specifications here in Thailand. The product would then be organized into the appropriate packaging and shipped to retailers globally.

I remember hearing something quite some time ago about special duty free economic zones in Thailand (I'm assuming around seaport container yards) whereby, so long as the product remains within the boundaries there are no import duties to be paid since it is destined for foreign markets. We would, however, like to hold a small percentage of the product here for sale within Thailand.

Can anyone offer some perspective on this topic?

cheers,

[raro]

you are right, there are Free Zones destined for this exact purpose in Thailand. You can also use 19biz, a special customs procedure, to do this outside of a Free Zone. It's more paperwork but gives you also more flexibility.

The subject is quite complex, PM me your contact details and I can give you the long brief...in short, the answer is yes, it is possible.

[tombkk]

Raro got it right. I recommend to use Free Zone rather than 19bis, and you don't even need a company registered in Thailand.

[raro]

Raro got it right. I recommend to use Free Zone rather than 19bis, and you don't even need a company registered in Thailand.

ah...lorrrr? No company needed?

[tombkk]

Raro got it right. I recommend to use Free Zone rather than 19bis, and you don't even need a company registered in Thailand.

ah...lorrrr? No company needed?

No. We store goods and conduct light assembly for our customers in our Free Zone facility. Most of our customers are not registered in Thailand.

[bkkflyer]

Raro got it right. I recommend to use Free Zone rather than 19bis, and you don't even need a company registered in Thailand.

ah...lorrrr? No company needed?

No. We store goods and conduct light assembly for our customers in our Free Zone facility. Most of our customers are not registered in Thailand.

But wouldnt the ones actually doing packaging and assembly be a Thai company?

[tombkk]

Raro got it right. I recommend to use Free Zone rather than 19bis, and you don't even need a company registered in Thailand.

ah...lorrrr? No company needed?

No. We store goods and conduct light assembly for our customers in our Free Zone facility. Most of our customers are not registered in Thailand.

But wouldnt the ones actually doing packaging and assembly be a Thai company?

Yes, we are a Thai company offering these services to foreign customers.

If you want to set up your own company in the Free Zone, that is another story. Quite possible, if you have the money to invest and the time to set it up. If the size of your operation is large, it might be cost-effective to do that.

There are Customs Free Zones (under the Department of Customs, which is under the Ministry of Finance)) and IEAT Free Zones (under the Industrial Estate Authority of Thailand, which is under the Ministry of Industry).

There are several industrial estates in which you can register your company and get Free Zone privileges. You would buy the land and develop it, but the land will already be designated for Free Zone privileges, so the application is fast, a few months only. I just made a couple of site visits, as we are planning to expand. I am not sure whether I can name them here though, better PM me.

Another (and more complicated) way is to buy your land an convert it to a Customs Free Zone. There are minimum requirements with regards to the size of the land and the minimum investment, I am not sure how much. But two companies we do business with have done exactly that. If your operation is sizeable, this will be the cheapest long-term solution.