E-commerce Business License: 10 Things You Should know about in Thailand

E-commerce business license in Thailand have experienced a significant increase in online shopping, making it an ideal place to start an e-commerce business. As one of the top 30 e-commerce markets worldwide, Thailand offers great potential for entrepreneurs to expand and grow. 

In this blog post, we will provide a detailed guide on how to launch your business in Thailand.

What is an E-commerce Business License in Thailand?

A government-issued e-commerce business license in Thailand allows online businesses to operate within a specific area. In Thailand, obtaining this licence demonstrates compliance with local laws and regulations, ensuring consumer protection, fair business practices, and tax responsibilities. This licence serves as proof of your commitment to ethical operations and legal compliance, providing reassurance to customers and regulatory authorities about the legitimacy and integrity of your online marketplace.

Why is an E-commerce Business License Important?

Obtaining an e-commerce business license in Thailand is crucial for several reasons:

Legal Compliance: Obtaining an e-commerce business permit guarantees full compliance with Thailand’s online commerce laws and regulations. This proactive step helps reduce the chances of incurring penalties, fines, or even closure due to failure to meet regulatory requirements.

Access to Payment Gateway: Having a valid e-commerce business license in Thailand is a requirement for partnering with payment gateways and financial institutions. This licence allows you to offer a wide range of payment options, enhancing the shopping experience for your customers. In Thailand, where consumers commonly use payment gateways like PromptPay, True Money, or Line Wallet, having a licence is especially important for smooth transactions and customer satisfaction.

Consumer Trust and Confidence: Having an e-commerce business license in Thailand boosts consumer trust and confidence in your brand. Customers feel safer and more at ease when dealing with a licensed business, as they know it follows legal and ethical guidelines. This trust can result in higher sales, loyal customers, and positive recommendations.

Market Credibility: Having an e-commerce business license in Thailand adds credibility to your business for stakeholders like investors, suppliers, and potential partners. It shows that you are serious about running a trustworthy online business, which can lead to new partnerships and chances for expansion.

Required Documents for the E-commerce License Registration

In order to finalize the registration procedure for an e-commerce business license in Thailand, you will be required to collect and submit the necessary documents to either the District Office in the area where your main office is situated (if it is outside Bangkok) or to the Bangkok Metropolitan Administration.

• Application for E-commerce Registration (Tor. Por. form and attachments): This application form will require you to provide details about your website and business operations.
  
• Identification Documents:
  • For individuals: ID card or passport of the applicant.
  • For juristic persons (companies): ID card or passport of the authorised director, along with the company affidavit.

• Power of Attorney: If applicable, a document granting authority to act on behalf of the applicant.
• Clarification Letter: In cases of late registration, a letter explaining the delay may be required.
• Map of Business Premises: A map detailing the location and layout of your business premises.

If your business does not own the premises where it operates, you’ll also need to provide:

• Letter of Consent or Rental Agreement: Documenting permission to use the premises, either through a consent letter from the owner or a rental agreement.
• Owner’s Identification Documents: A copy of the owner’s ID card or documents proving ownership of the premises.

To speed up the registration process for your e-commerce license and ensure legal compliance in Thailand’s e-commerce industry, it is crucial to accurately complete and submit all necessary documents. 

What are the Legal Requirements for Starting an Online Business in Thailand?

In order to set up an online business in Thailand, you need to follow the rules set by the Electronic Transaction Act (ETA) and other relevant authorities. These are the important legal criteria you must meet when starting an e-commerce business in Thailand.

Application for an E-License: To start your e-commerce business, it is important to apply for an e-commerce licence within 30 days. This process requires you to fill out the required forms and meet the payment and pricing criteria set by the authorities.

Website Creation: Since e-commerce activities mainly take place on the internet, it is crucial to have a website for your business. It is required to have your website up and running within 30 days of receiving your e-license, and you will need to submit the domain name registration document as part of the application procedure.

Compliance with Bank of Thailand Requirements: Ensuring compliance with the regulations set by the Bank of Thailand is crucial for your e-commerce business if it facilitates credit card transactions. By following these requirements, you can maintain the security and integrity of the financial transactions that take place on your platform.

Registration under the Office of the Consumer Protection Board (OCPB): 

Your online business might need to register with the Office of the Consumer Protection Board (OCPB) to safeguard consumer rights. This involves fulfilling requirements like exceeding 3000 money transfers or managing transactions worth 2 million THB annually. It is important to inform the OCPB if your business meets these standards to ensure compliance with consumer protection laws.

What are the E-commerce Laws and Regulations in Thailand?

In Thailand, there are various laws and regulations that oversee e-commerce activities to promote a favourable environment for development and to guarantee fairness, security, and protection for consumers. The main legal structures that are important for the e-commerce industry are:

The Electronic Transaction Act of B.E. 2544

This law acknowledges electronic transactions and confirms the legal standing of electronic documents, signatures, and communications. It sets guidelines for carrying out business digitally, considering data messages as equal to conventional paper documents. Furthermore, the legislation details protocols for sending and receiving electronic data, improving the trustworthiness and safety of e-commerce transactions.

The Computer Crime Act of B.E. 2550

This act is created to stop and deal with crimes involving computers. It controls different parts of online activities like hacking, data breaches, and fraud. People who access computer systems without permission, manipulate data, or commit cybercrimes will face consequences. Internet service providers are also responsible for keeping their networks secure and reliable.

In addition to these primary laws, several other legal provisions indirectly impact the e-commerce landscape in Thailand:

• Penal Code: Certain provisions of the Penal Code may apply to e-commerce activities, particularly those related to fraud, misrepresentation, and intellectual property infringement.

• Data Protection Laws: Thailand has enacted legislation to protect personal data and privacy rights, which may have implications for e-commerce businesses handling customer information.

• Consumer Protection Laws: Regulations governing consumer rights and fair trade practices ensure that e-commerce transactions adhere to ethical standards and provide adequate protection for consumers against fraudulent or deceptive practices.

What is the Registration Process for an E-commerce Company?

The process of establishing an e-commerce company in Thailand requires the completion of various important tasks and compliance with specific criteria. Here is a comprehensive explanation of the registration procedure:

Clarify the Activities of Your E-commerce Company:

• To determine the licences and permits required, it is important to have a clear understanding of the nature of your e-commerce activities. Various e-commerce models, including marketplace and dropshipping, may have specific registration procedures that need to be followed. 

Create an E-commerce Website:

• Consult with the Thai Network Information Center (THNIC) for the registration of your website’s domain name.
• If you’re opting for a “.co.th” extension, prepare required documents such as the certificate of registration, VAT registration document, and VAT modification application document.
• While not mandatory, consider trademark registration to protect your brand against infringement and enhance credibility.

Company Registration:

• Register your company with the Business Development Department of Thailand to establish legal operations and obtain necessary protections.
• A private limited company is the most common business structure for e-commerce ventures. Requirements for opening a Thai Limited Company typically include:
• At least 2 shareholders.
• One or more directors.
• Minimum registered capital of 50,000 THB (2M THB if hiring a foreign employee).
• A registered corporate address in Thailand.

By completing these steps and fulfilling the requirements, you’ll ensure the legal establishment of your e-commerce company in Thailand, enabling you to operate compliantly and with the necessary legal protections.

Can E-commerce Businesses be 100% Foreign Owned?

In practice, the Foreign Business Act restricts foreign-owned companies from directly engaging in e-commerce operations in Thailand. However, there are potential avenues for foreign entities to establish and operate e-commerce businesses in the country:

Foreign Business License (FBL):

• The FBL allows foreign companies to conduct business activities typically restricted to Thai companies under the Foreign Business Act.
• Key requirements for obtaining an FBL include a minimum capital investment of THB 3 million per business, limitations on loans against capital, and the presence of at least one authorised director with a Thai address.

Thai Partner:

• Foreign ownership of a limited company in Thailand is capped at a maximum of 49.99% under the Foreign Business Act, unless an FBL or Board of Investment (BOI) promotion has been obtained.
• Being a minority shareholder in a Thai Limited company exempts the entity from certain restrictions of the Foreign Business Act, making it an alternative option for foreign involvement in e-commerce.

Board of Investment (BOI):

• While the BOI previously offered promotions for e-commerce ventures, it currently focuses on software development incentives.
• These incentives are geared towards the development of software, digital platforms, or digital content rather than the retail and wholesale aspects of e-commerce.
• E-commerce companies seeking BOI promotions for software development must ensure their operations align with BOI requirements.

It’s important to note that companies operating e-commerce businesses under an FBL or other arrangements are still required to register with the Department of Business Development and obtain an e-commerce business license in Thailand to ensure compliance with local regulations. Furthermore, the use of nominee shares in Thailand, where a Thai national holds shares on behalf of a foreign entity, is expressly prohibited by the Foreign Business Act. Thus, foreign entities seeking to engage in e-commerce in Thailand must navigate legal structures carefully to comply with relevant laws and regulations.

Navigating E-commerce Regulations in Thailand

Operating an e-commerce business license in Thailand necessitates a thorough understanding of legal frameworks and regulatory obligations. Although foreign ownership restrictions may present obstacles, there are various avenues for foreign participation in the thriving Thai e-commerce industry, such as obtaining a Foreign Business License (FBL), partnering with local Thai entities, and adhering to the incentives provided by the Board of Investment (BOI). By familiarising themselves with and adhering to the applicable laws and regulations, e-commerce entrepreneurs can tap into the potential for growth and achievement in this dynamic market.

Frequently Asked Questions