Discusses the legal requirements/options for joint venture/licensing in this market.
Joint ventures (JVs) and licensing agreements are important market entry strategies for American exporters to Thailand. In many cases, the only way to overcome costly freight charges, high tariffs, and competition from cheaper local goods is via local production.
Thailand’s Civil and Commercial Code has a section on General Contracts, which broadly governs all contractual business relationships and transactions. Depending on the nature of the contract, the Public Companies Act and Alien Business Act include provisions pertaining to joint venture agreements which American firms should be aware of before signing with any Thai business partners. (Please note that any provision of the contract that is deemed to be contrary to public order or morality will be void). Joint-venture partnerships with funding support, technology transfer, and training components are effective mechanisms to achieve success.
Many Thai firms are actively seeking U.S. joint-venture partners that, in addition to much needed capital, can also bring technical, marketing, and management skills to the business relationship. In turn, Thai firms generally offer assets, such as valuable local vendor and government contacts and established business relationships in the region. A number of U.S. companies have already entered into strategic joint-venture relationships with Thai partners in Indochina and China.
The Commercial Section at the U.S. Embassy in Bangkok can provide assistance to American firms seeking potential joint venture partners in Thailand through various business development services.