e27 and Market Access present the Market Access Series — designed to help companies expand to markets in Southeast Asia. As each country has its own regulations, culture, challenges, and opportunities, this webinar series shares invaluable insights through industry experts from each country to help you figure out the best way to get started.

Each live episode in the series will focus on a specific country and features panellists from government agencies, VCs, and global employment platform Globalization Partners discussing business and fundraising opportunities, challenges, considerations in expansion, tips, best practices, and available support.

Moderated by Dennis Poh, CEO of Legatcy, the panellists for the Market Access: Thailand episode were Woraphot Kingkawkantong, VC Investment Head at Beacon Venture Capital; Pariwat Wongsamran, Director of Entrepreneur and Enterprise and Director of Startup Thailand at the National Innovation Agency; and Charles Ferguson, General Manager – Asia Pacific at Globalization Partners.

Reasons your startup should expand to Thailand

The webinar started with a discussion on why companies should consider expanding to Thailand. Wongsamran explained that Thailand is most suited as a test market lab for companies looking to expand to Southeast Asia. “We have many people here who like to be early adopters like in the B2B and fintech sectors and we have many corporates who would like to work together with startups. Thailand is a very good test market for startups to make sure that they develop the product-market fit and are ready to expand to the rest of Southeast Asia,” he remarked.

“We have a market of about 70 million people to make sure that we can fulfil industry needs. The government wants to develop infrastructure to help foreign startups operate here and we have set up Global Startup Hubs in Bangkok and Chiang Mai. Thailand is a strategic location and strategic market in Southeast Asia. Many foreign companies would like to land here but they don’t know about the local market well so we try to provide consultancy and help connect them to the local networks free of charge,” he added.

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Charles Ferguson, General Manager of Globalization Partners, added that it’s important to understand the Thai people’s impressive work ethic. “The people of Thailand have shown they have an innovative spirit and desire to progress their ambition. The incredibly well-educated population is remarkably talented across a whole spectrum of indicators.”

The latest e-Conomy SEA 2021 report valued the Thai technology industry market opportunity at 30 billion US dollars. In 2021, 1.1 billion US dollars was raised across 31 deals versus 500 million across 27 in 2020 which points to a significant amount of growth happening in Thailand.

Under the World Bank’s rating of easiest places in the world for doing business, Thailand is ranked 21st. This illustrates a well-designed infrastructure for global startups to plug themselves in and scale. This is also why if you ask any startup looking to scale, it is very rare for a company to consider expansion plans in Southeast Asia while counting out Thailand as a possible global destination.

The Board of investments in Thailand has also built tax incentives, support services, import duty exemptions, and reductions for investment costs, helping mitigate a lot of risks — all to streamline investments going in. On top of that, the country is also a generally nice place to live in which is an important variable, especially because when you’re dealing with resiliency and mental health, various structures are needed in place to support businesses and the people that run them to achieve a great balance in their lives.

Business and fundraising opportunities for startups in the Thailand market

The fundraising landscape in the Thai market shows that a majority of capital raised by startups in Thailand — 70 to 80 per cent — comes from corporate venture capital firms. “That signifies the willingness that bigger corporates are willing to work with startups unlike other countries,” said Kingkawkantong.

He added, “the more formal channel would be through the NIA or other agencies who are looking to act as a door opener for foreign businesses. So I would say either go through the formal channels or just try to reach out to different corporates or even to startups, because they would have experiences working with the bigger corporates and can refer you to the partners already working with them.”

Wongsamran said that if a startup would like to expand but is not ready to set up the company yet, Thailand has several visa options. “We work together with BOI to give the SMART visa before you execute the company — you can get the smart visa also for talent and spouses/children. We would like to let foreign startups easily penetrate the market and understand the market first before setting up here. We also have incubation programmes in vertical industries, with the first one for food technology.”

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Kingkawkantong said that “[For] series A onwards, there are a ton of choices for you because a lot of corporates have their innovation funds or VCs. Whichever industry you’re in, there are VCs that are eager to discuss with you. Besides the corporate and financial venture capital, there are a lot of investors as well looking to invest in great companies and help you succeed in the Thai market.”

“For early-stage capital, the landscape is very active as well, and there are a lot of successful and big angel investor networks out there,” he added. Ferguson said that companies that are pre-Series A can also start looking around at accelerators and incubator programmes. “There are some phenomenally cool accelerators and innovation programmes funded by corporates in different segments like agritech and of course, fintech and NFTs/blockchain, etc.”

How can companies effectively scale in Thailand?

The discussion also included strategies on how companies can scale in Thailand quickly and effectively. What competitive advantages does Thailand’s tech talent workforce provide and how can startups leverage technology to their advantage? 

Kingkawkantong feels the best way to grow isn’t to start cold and to try to invent everything by yourself. “A lot of corporates are eager and desire to collaborate with different startups to help boost their business as well, and that means there is a ton of opportunity to grow together with businesses such as banks, construction, or property sectors. There is room to build synergy and partnership,” he pointed out. 

Ferguson suggested that startups should prepare an appropriate pre-departure checklist before expanding to Thailand. “Do your homework and understand the legal aspects of expansion. For example, there are ownership restrictions around businesses so foreign investors opening a Thai limited company are limited to a maximum of 49 per cent ownership. 

With entity setup and infrastructure deployment, there are several things to consider. Getting work permits, appointing shareholders, taxes — all these different things can be challenging, remarked Ferguson. “So I want to advocate for people to consider alternative ways and means by which you test a market before you go all in.”

He continued: “From a talent point of view, you want to be able to navigate the cultural nuances and be able to plug into local partner networks.

How technology plays a part in helping companies get a headstart

Ferguson remarked that countries like Thailand have had access to free or low-cost open-source software in the last 20 years. He explained how this led to the proliferation of innovative, technology-driven startups, which also fostered a rich talent pool. “You’ve got access to incredibly talented engineers in these markets which don’t necessarily exist in high volume in the more mature markets, so I would advocate that companies look for talent in these markets.”

Speaking of leveraging technology solutions, Ferguson said that in terms of speed, his number one key performance indicator is the time to value (TTV). Technology can have a great streamlining effect, but it depends on how you utilise it to get a strategic advantage. “When technology is deployed with a strategic partner who knows how to maximise the impact of that technology in the market, that’s where the time to value comes in,” said Ferguson.

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Technology solutions like Globalization Partners’ Global Employment Platform are already localised and ready for the Thai market with compliant labour contracts, access to benefits, and payroll specific to the Thai market so you can hire local talent quickly and compliantly. To learn more, you can schedule a demo here.

In the Q&A session that followed, more tips were offered as the panellists shared insights on the potential for Web3 startups, how startups can tap into available grants from the NIA, and how to navigate tech talent hiring in Thailand.

To learn more, view the webinar here.

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This article is produced by the e27 team, sponsored by Globalization Partners

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