Thailand is a rapidly developing country, home to a thriving healthcare industry. The country presents an attractive opportunity for entrepreneurs who want to start a healthcare business Because of its growing population and increasing demand for quality medical services. However, starting a medical business in Thailand can be a complex process that requires careful planning and execution. This article provides a simple guide to answer the ‘how to start a medical business’ question for aspiring entrepreneurs.
Thailand’s Aging Society
Thailand has a growing healthcare industry, but the number of older people in the country is also increasing. This means there will be a greater need for healthcare services in the future, making the healthcare trend in Thailand progressive. Thailand is not alone in this trend, as many other countries are also experiencing an aging population. Thailand has a higher proportion of people over 60 than other countries in the ASEAN region. By 2045, Thailand’s aging population is expected to be even higher than that of regions like Europe and the US. This clearly shows that the demand for healthcare in Thailand will continue to rise as the population ages.
Thailand’s Success in the Healthcare Sector
Thailand has significantly improved access to medical care and public healthcare. They have invested considerable time and resources to ensure easier access to healthcare services. The government’s spending on healthcare has rapidly increased, rising from less than 50% in 1995 to nearly 80% at present. Thailand has also implemented a universal healthcare system since 2002, which has proven to be highly successful. As a result, over 99% of Thai citizens now have access to public healthcare.
More than 1,000 government and 300 private hospitals offer a wide range of services and treatments in Thailand. This extensive network of healthcare facilities indicates that the public healthcare system in Thailand likely serves the majority, if not all, of the population.
The General Framework for Starting a Company in Thailand
Following a step-by-step process to establish a company in Thailand is recommended. Firstly, choose the most suitable company structure and reserve a name from the Department of Business Development. Then, create the articles of association, hold a shareholders’ meeting, register the company, and obtain a tax identification number. You must apply for visas and work permits for foreign directors or employees.
Despite the restrictions on foreign ownership imposed by Thai law, there are two ways for medical companies to overcome these challenges:
- Obtain a foreign business license (FBL) from the General Director of the Department of Commercial Registration, with approval from the Foreign Business Committee.
- Seek approval from the Thailand Board of Investment (BOI)
By following these general guidelines and exploring the available options, medical companies can establish their presence in Thailand and navigate the regulations.
Medical Activities Eligible for BOI Approval
Verify the eligibility of the medical activity you plan to carry out. Seven medical activities qualify for BOI approval:
- Manufacture of medical food or food supplements
- Manufacture of hygienic products
- Manufacture of medical equipment
- Manufacture and sale of pharmaceutical products
- Rehabilitation centre
- Medical care centre
- Clinical research
The BOI license application should be submitted online if the proposed activity falls within these eligible categories. Once the application undergoes an initial evaluation and receives preliminary acceptance from the BOI officers, the company representatives or Directors must attend a meeting with a BOI expert committee. Within ten (10) days of the application, they must deliver an oral presentation. Following 90 days, the project will undergo a subsequent evaluation, determining whether the BOI certificate is granted.
Why you Should Obtain BOI Certification
Obtaining the BOI certification provides significant tax benefits:
- Companies can be exempt from paying corporate income tax for a period ranging from 3 to 8 years, depending on their specific business activities.
- There is a 50% reduction in corporate income tax for a maximum of 5 years.
- Import tax on machinery is waived.
- Import tax on raw materials used for products intended for export is waived.
- Import tax on objects used for research and development projects is waived.
Additionally, there are other advantages beyond tax incentives:
- Foreigners are allowed to own 100% of the company’s shares.
- Foreigners are welcome to explore investment opportunities.
- Foreign technicians and experts can be brought in.
- Funds can be transferred in a foreign currency.
- Ownership of land is possible, subject to project approval.
Basic Incentive for these Eligible Medical Activities
The BOI (Board of Investment) offers many benefits to investment projects that align with the government’s development objectives. These incentives were mentioned above, which are available to support and encourage investment in Thailand.
| Eligible Activities | Basic Incentive |
| The production of medical devices that are either high-risk or high-technology (such as x-ray machines, MRI machines, CT scan machines, and implants), or medical devices that are developed through public sector research or collaborations between the public and private sectors. | Eight years CIT exemption |
| Active pharmaceutical ingredients | Eight years CIT exemption |
| Making medical devices, excluding those made from fabrics or fibres | Five years CIT exemption |
| Manufacturing medicine | Five years CIT exemption |
| Making medical devices made of fabrics or fibres, such as gowns, drapes, face masks, caps, gauze, and cotton wool | Three years CIT exemption |
| Specialty medical centres | Eight years CIT exemption |
| Hospitals | Eight years CIT exemption |
| Traditional medical public services | Five years CIT exemption |
What are the Licenses That may be Required?
You may need different licenses depending on the type of business to start a medical business in Thailand:
- For service-based businesses like rehabilitation centres or nursing homes, you must apply for a medical service business license from the Department of Health Service Support.
- If your business involves manufacturing and you have a factory with 50 or more machines or employ 50 or more people, you must obtain a factory license from the Department of Industrial Works. If you don’t meet these criteria, apply for a Business Establishment License from the Local Administration Organization. If your factory is located in an industrial area, you must also apply for Factory permission and incentives from the Industrial Estate Authority of Thailand.
- You must apply for a Science laboratory capacity certificate from the Department of Medical Science for clinical research activities.
- Before marketing medical equipment, pharmaceutical products, or medical food, your company must obtain permission from the Food and Drug Administration (FDA) under the Thai Drug Act of 1967 (BE 2510).
These licenses are necessary to ensure compliance and legal authorization for your medical business in Thailand.
Applications for Patents
According to the intellectual property/patent law in Thailand, a patent can only be obtained for an invention that meets the following requirements:
- The invention must be new.
- It must involve an inventive step.
- It should be capable of industrial application.
Qualifications
An individual or organization applying for a patent must meet one of the following requirements:
- Be a Thai citizen or a company based in Thailand.
- Be a citizen of a country with a patent protection agreement with Thailand.
- Be a citizen of a country that allows Thai citizens or Thai-based companies to apply for patents in that country.
- Reside or have a genuine and active industrial or commercial establishment in Thailand or a country with a patent protection agreement with Thailand.
Rules and Procedures for the Patent Application
The patent application process must follow the rules and procedures set out in the Ministerial Regulations.
The patent application should include the following:
- The title of the invention
- A brief statement describing the nature and purpose of the invention
- A detailed description of the invention, presented in clear and precise terms so that someone with average knowledge in the relevant field can understand and replicate the invention. The description should also explain the best way the inventor has conceived to implement the invention.
- One or more clear and concise claims, which define the specific aspects or features of the investigation being claimed for protection
- Any other items specified in the Ministerial Regulations
If Thailand has entered into an international agreement or cooperation regarding patents, a patent application that meets the requirements of that agreement or cooperation will be considered valid.
Visa Solutions
The Foreign Working Act of 2008 states that foreigners who want to work in Thailand must obtain a work permit in advance. This permit specifies the activities they are allowed or not allowed to do.
However, the process of getting a work visa has been made easier with the introduction of a new visa category called the SMART visa. The Thai government approved this visa on February 1, 2018, and it aims to attract highly skilled foreigners and investors to work or invest in Thailand. The SMART visa is available for various industries, including automotive, tourism, agriculture, robotics, and more.
Four categories of foreigners are eligible to apply for the SMART visa: experts, investors, executive management personnel, and startups. This visa offers several benefits and privileges, such as a validity period of up to four years, exemption from obtaining a work permit, reduced reporting requirements to the Thai Immigration Service (only once a year), and the opportunity for family reunification with the spouse and children of the visa holder.
Conclusion
The healthcare industry in Thailand presents immense opportunities for growth and innovation, attracting entrepreneurs like you. You can establish a successful medical business in Thailand by navigating the registration process, leveraging BOI incentives, complying with licensing requirements, and protecting your intellectual property.
At Reliance Consulting, we specialize in assisting businesses in Thailand with company incorporation and registration. Contact us to learn more about how we can support your journey to success in the Thai healthcare market. Register a Thai company right away!
