Thai businesses are largely owned by upper crust families who are of Chinese origin. Most Thai business families are related to one another, mostly through marriage. It’s a close, tight network and to penetrate into this group, it requires patience and skill. Your initial meetings should focus on developing relationships rather than striking a deal.
Being courteous and polite is important to the Thai people. They laugh easily, sometimes even when they are embarrassed and so can you! Social events are important to them. Learn how to wai (respectful greeting) as it’s a basic ritual that shows respect to elders and seniors.
What are some Thai business negotiation tactics?
- Initial contact should preferably be via a letter, with the agenda to get introduced and increase familiarity
- Plan 2 – 4 weeks in advance and arrive on time (allow for traffic!)
- The agenda of the proposed meeting and details about you and others attending the negotiation from your side need to be disclosed prior to the first meeting, with sufficient time for them to review it
- Expect a social meeting to follow the initial interaction if things go well
- Send senior employee/s to crack the business deal as the Thais appreciate hierarchy
- All written material should be in English (and Thai if possible)
- Allow the process to take its own time, be patient
- Business attire should be conservative for formal, avoid black
- Though most Thais speak in English, include an interpreter
- Respect the Royal family, Buddha and related images, scriptures and family values in general
What is a contract worth in Thailand?
Oral commitments in Thailand are legally binding but difficult to enforce. They also lack detailing. It is therefore recommended to create a formal contract before engaging in any business activity with Thai businessmen.
Avoid including an attorney in your business meetings as this may be looked at as a sign of mistrust. But always include one before signing a formal contract.
Signed contracts are flexible. They are subject to change depending on circumstances. Don’t allow this to perturb you or damage your relationship with your Thai business partners.
What are Thai arbitration and litigation processes?
The Thai prefer to settle business disputes out of court.
Due to increased foreign investment and a more active business environment in Thailand the last few years, the number of legal cases has increased substantially. This has overburdened the Thai courts, making the legal process a long one. Hence, Alternate Dispute Resolutions in the form of arbitration and mediation have been developed to aid the justice process.
The Thai business environment is an exciting one and long term relationships with powerful, local businessmen are worth making the efforts for. Hence, plan your Thai connection thoroughly and work on it steadily for best results.