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Fundraising in Thailand as a Foreign Founder: A Dead End?

Fundraising in Thailand as a Foreign Founder: A Dead End?

By Craig June 21, 2025 Blog

A blunt analysis of the real barriers facing foreign founders trying to raise startup capital in Thailand. Explore the legal, cultural, and structural limits of building a VC-backed company here—and the workarounds that might still make it possible.

Fundraising in Thailand as a Foreign Founder: A Dead End?

Introduction

When I first came to Chiang Mai, I wasn’t thinking about raising money. Like many early-stage founders, I was focused on building. But over time—between exploring product-market fit and running lean—I started looking at options: Could I raise a pre-seed round in Thailand? Was there any meaningful investor base here? Would any local VC even take a meeting with a Canadian solo founder building a Thai-incorporated software startup?

What I discovered was sobering. Despite all the noise about Southeast Asia’s “rising tech scene,” Thailand remains structurally and culturally one of the least founder-friendly places in the region to raise capital—especially if you’re not Thai.

This article is a blunt walkthrough of what I found. It’s part practical guide, part cultural autopsy. If you’re a foreign founder looking at Thailand as a launchpad, this is what you’re really up against: legal barriers, a shallow capital pool, risk-averse culture, and a startup ecosystem that looks good in PowerPoint decks but often falls apart under real scrutiny.

But this isn’t just pessimism. Thailand has its strengths, and for the right type of founder—especially those bootstrapping or running lean—it can still be a viable base. You just have to approach it with eyes wide open.

We’ll start by exploring the illusion of Thailand’s tech boom, then move into the legal constraints for foreigners, the absence of true early-stage capital, and the deeper cultural reasons why tech doesn’t thrive here like it does in Singapore or Vietnam. From there, we’ll look at some workarounds that founders are actually using: foreign incorporation, Smart Visas, hybrid models, and long-term bootstrapping strategies.

This isn’t theory. It’s lived reality—pulled from my own path, peers in the Chiang Mai and Bangkok tech scenes, and the brutally honest conversations that rarely make it into startup pitch decks.

If you’re thinking about raising money in Thailand, this is the article I wish someone had handed me first.

The Illusion of a Thai Tech Boom

At first glance, Thailand appears to be in the middle of a tech renaissance. Walk through Bangkok’s True Digital Park, and you’ll see slick co-working spaces, startup banners, and demo day posters plastered across high-rise walls. Government-linked programs like DEPA’s Digital Startup Fund and NECTEC innovation initiatives suggest a nation serious about its digital economy. Events are frequent. Panels are well-lit. The branding is tight.

But once you dig a layer deeper, the substance often evaporates.

Thailand has produced a handful of recognizable tech companies. GoWabi, a wellness services booking platform, has gained traction in the domestic market. Omise, a payments company, attracted attention for launching its blockchain arm (OmiseGO, now rebranded). Roojai, an online insurance platform, has also scaled successfully across verticals. But these are exceptions—not indicators of a thriving ecosystem. In fact, many of these companies are foreign-led or built by regional teams operating in Thailand for cost reasons.

Then there’s Agoda, often used as Thailand’s poster child for startup success. But the truth is less inspiring: it was founded by American entrepreneurs, grew under foreign capital, and was acquired by Booking.com (a subsidiary of U.S.-based Booking Holdings) over a decade ago. While Agoda’s operations remain headquartered in Bangkok, it’s more a satellite of U.S. platform dominance than a Thai-born unicorn.

The deeper issue is that Thailand’s startup scene suffers from form over function. There’s a large volume of “digital economy” branding, but the actual number of original, scalable tech ventures—especially ones that solve hard problems or target international markets—is extremely low. What’s most common is the cloning of Western or Chinese business models, customized slightly for the Thai context.

This isn’t inherently bad. Local adaptation of proven models can be a valid business strategy. But it doesn’t build a tech ecosystem. It builds local service businesses that happen to use an app.

Founders I’ve spoken with describe the scene as “a good place to live, but not to build.” For every polished incubator presentation, there are five zombie startups quietly kept alive through grant recycling or corporate sponsorships. There’s energy—but it lacks technical depth, global ambition, and investor backing.

Thailand may eventually grow into a true tech player in Southeast Asia. But right now, it’s not Singapore, not Vietnam, and definitely not Silicon Valley. It’s still early days—and foreign founders need to adjust their expectations accordingly.

Structural Barriers for Foreign Founders

Foreign entrepreneurs entering Thailand often do so with optimism: the cost of living is low, the talent is young, and the ecosystem looks—at first—relatively open. But once you start trying to set up a real company with real employees and real IP ownership, you quickly hit structural walls that are specific to Thailand’s legal and bureaucratic framework.

The biggest issue is ownership. Under Thailand’s Foreign Business Act (FBA), foreigners are restricted from owning more than 49% of a company in most business categories unless you obtain specific exemptions. These exemptions include getting Board of Investment (BOI) promotion or applying for a Foreign Business License (FBL). Both routes are technically available—but neither is fast, guaranteed, or easy to secure.

Ownership: 49% Means Control—If You’re Lucky

Even if you set up a company and hold 49% of the shares, your Thai partner or partners legally control the majority of the business. In practice, this doesn’t just mean you’re a minority shareholder—it means you’re vulnerable. Unless you implement a complex agreement structure (e.g., layered voting rights, founder agreements, or preferred shares with veto power), your operational security is at the mercy of your partner’s integrity. For many founders, especially in the early stages, this is a high-stakes gamble.

Some lawyers offer preferred share structures or “management control agreements” to mitigate this risk, but these tend to be expensive, difficult to enforce, and legally grey. As Thai authorities have increasingly cracked down on nominee shareholder arrangements—where a Thai citizen is paid to hold shares on behalf of a foreigner—the environment for casual workarounds has become more hostile. What used to be a common path in industries like real estate or consulting is now a potential liability.

“The risk isn’t that your nominee will betray you. The risk is that Thai DBD officials will spot it—and invalidate your structure.”

Banking, Cap Tables, and Bureaucracy

Even once your company is legally formed, you’re far from operational. Opening a business bank account often requires the physical presence of Thai directors or shareholders—especially at banks like Bangkok Bank or Kasikorn. In many cases, the branch manager has final say, and processes vary wildly depending on the region or even the teller. Foreigners without fluent Thai-speaking partners are routinely turned away, even when all paperwork is in order.

Cap table management is another pain point. Thailand’s business registration and corporate filing systems (via the Department of Business Development, or DBD) are still largely manual. Updates to shareholder structures, directorship changes, and company amendments often require paper forms, physical stamps, and in-person filing. This adds friction to things that, in other jurisdictions, take five minutes via web portal.

Startups that expect to iterate quickly—pivoting, onboarding new investors, issuing options—find this glacial pace incompatible with startup speed. In contrast, jurisdictions like Singapore or Delaware offer near-instant corporate amendments and simple cap table tools like Carta or Pulley. Thailand is, bluntly, not designed for fast-moving startups.

Labor Law: The 4-to-1 Rule

Even if you solve ownership and banking, you still face immigration friction. Under Thai labor law, a Thai company must employ four Thai staff for every one foreign work permit it sponsors. This makes hiring your own founding team problematic unless you’re willing to carry excess headcount—or find creative ways to meet the quota (e.g., hiring admin staff or interns).

While the Thailand SMART Visa route can exempt you from this ratio (especially under the SMART S or I categories), not all startups qualify. And the process to secure SMART Visa approval from agencies like BOI or NIA involves significant documentation, including paid-up capital, financial projections, and local endorsements. In practice, many early-stage founders can’t afford to go that route immediately—and fall back on short-term visas, creative consulting arrangements, or simply delaying hiring altogether.

The Singapore Workaround

The result? Many serious foreign founders sidestep Thai incorporation entirely. They register their company in Singapore (or the U.S.), run their operations through Stripe, Payoneer, or Wise, and use Thailand as a cost base—a place to live, hire, and code, not to structure.

“They love Bangkok but set up in Singapore and commute.”

This quote, heard often among Southeast Asia’s startup crowd, captures the duality of the region: Thailand is where you live, not where you raise or operate formally.

Singapore offers fast incorporation (under 48 hours), full foreign ownership, simple digital cap table tools, and access to a global banking system. For founders used to Delaware-level flexibility, Singapore is the closest Asian match. It’s no surprise that even Thai nationals setting up serious ventures often do so through Singapore and back-hire into Thailand.

None of this is to say building a company in Thailand is impossible—but you must go in with eyes wide open. Foreign founders who expect to replicate the lean Delaware C‑corp experience will be frustrated. You’ll need to balance local compliance with strategic delegation, and in many cases, separate your lifestyle location from your legal infrastructure.

There are exceptions. If you have a Thai partner, access to legal support, and a business that aligns with BOI priorities (deep tech, biotech, AI), you may secure the right structures to build from inside Thailand legally and successfully. But for the average solo foreign SaaS founder? It’s far more efficient to incorporate abroad and treat Thailand as a base—not a boardroom.

Where Is the Capital? A Landscape Without a VC Culture

Thailand’s startup scene features co-working spaces, pitch events, and shiny CVC banners—but when it comes to true early-stage venture capital, the ecosystem is shallow, fragmented, and often inaccessible, especially for foreign founders.

Corporate ‘VCs’, Not Real VCs

The majority of startup funding in Thailand comes from corporate venture capital (CVC) arms of large Thai conglomerates—such as SCB 10X, True Incube, Beacon Venture Capital (Krungsri), and PTT’s GC Ventures. These funds typically align with internal corporate strategies—like fintech, supply chain, or energy—rather than supporting scalable consumer or B2B software startups. As noted in recent industry reporting, “CVCs accelerate the Thai startup ecosystem… but too much corporate money may have stalled broader innovation,” often inflating valuations without offering follow-on support :contentReference[oaicite:0]{index=0}.

What this means in practice is that raising a meaningful round often requires aligning with a corporate partner’s internal agenda—whether or not it fits your product or market.

Few Independent Early‑Stage VCs

Unlike Singapore or Indonesia, Thailand currently lacks a meaningful population of independent, early-stage VC firms that are willing to back repeatable SaaS or digital businesses. While regional investors like Golden Gate Ventures or Openspace occasionally write checks, they almost always ask that startups be registered in Singapore or other SEA hubs first :contentReference[oaicite:1]{index=1}.

Domestic funds are overwhelmingly focused on Series A and later rounds, with very few dedicated teams or capital allocated to seed-stage risk-taking. One ecosystem report bluntly labels Thailand as “a tough nut to crack for venture capitalists” due to its fragmented networks and limited track record of exits :contentReference[oaicite:2]{index=2}.

The Fragmented Angel Market

Thailand’s angel investment landscape is equally fragmented. What exists is largely driven by informal syndicates, personal connections, or family offices—and typically limited to a few hundred thousand dollars at a time. This places foreign founders at a disadvantage; without local relationships or Thai-language fluency, they rarely receive invitations to participate.

As one founder observed, early-stage investors in Thailand often lack the sophistication or policy framework to support tech-first ventures outside corporate affiliations or personal networks.

Limited Institutional Capital and Startup Shock

A review by Bangkok’s CMR Institute reflects that seed-stage capital remains a bottleneck in Thailand’s tech ecosystem—despite considerable hype and government-backed accelerators :contentReference[oaicite:3]{index=3}. Despite infrastructure like DEPA programs and incubators, founder conversations consistently point to a lack of serious funding for bootstrapped tech companies.

The limited flow of institutional cash helps explain why many Thai and foreign teams incorporate in Singapore or Delaware, keeping their U.S./SG legal entities ready for investment while continuing operations from Bangkok or Chiang Mai. Thailand becomes their lifestyle base, not their legal or funding base.

Summary of Gaps

AreaThailand Reality
VC ActivityDominated by CVCs; few independents; low AUM at seed-stage
Angel InvestmentInformal, network-heavy; hard for foreigners to access
Regulatory SupportGovernment incentives exist—but execution remains inconsistent at early stage
Cross-border CapitalSG/U.S. funds require incorp in SG/US; physical Thai startup structure holds weak weight

What It Means for Founders

Capital in Thailand exists—but not in the way startup founders expect. It’s a CVC-heavy, A-stage-led ecosystem that lacks the independent early-stage investors needed to bootstrap seed-to-product growth. Angels are cautious and insular. International investors look abroad for structure and scale.

For foreign founders aiming to raise, the pattern looks like this:

Thailand becomes a cost-effective operational hub—not a capital hub. If you’re starting here, identify early on whether you’re raising locally or sourcing capital externally.

Comparison with SEA Neighbors

When comparing Southeast Asia’s startup ecosystems, seven countries stand out for how they support foreign founders in terms of incorporation, funding, ownership rights, English proficiency, and bureaucracy. Here’s a detailed breakdown:

🇸🇬 Singapore

🇻🇳 Vietnam

🇮🇩 Indonesia

🇲🇾 Malaysia

🇵🇭 Philippines

🇰🇭 Cambodia

🇹🇭 Thailand

Summary

While Southeast Asia boasts vibrant entrepreneurial zones, Thailand differs dramatically. It’s a cost-effective lifestyle base, but lacks the legal simplicity, capital access, and ecosystem depth found elsewhere. Foreign founders seeking global scale and funding are better positioned in Singapore, Vietnam, or Indonesia, where infrastructure, capital, and openness truly converge.

Workarounds and Alternative Strategies

Thailand may not be a favorite for raising, but it can still be a viable operational base—used alongside strategic structures to counter local limitations.

1. Incorporate in Singapore or Delaware

2. Use the SMART‑S Visa

3. Fund Through Non-Dilutive Channels

4. Co-build with a Thai Partner

5. Accept Hybrid Models as Norm

This isn’t a perfect scenario, but it’s fast becoming the de facto strategy for serious foreign founders. Thailand becomes your living base, coworking hub, and lifestyle center—not the legal or fundraising center of gravity.

Final Thoughts: Is Thailand a Dead End or a Sandbox?

If your startup goal is to raise a proper seed round from institutional investors, Thailand is—bluntly—a dead end. The country lacks a functioning early-stage venture pipeline, has rigid foreign ownership laws, and offers no scalable accelerator infrastructure comparable to what you’ll find in Singapore or even Vietnam. Founders who try to build high-growth, VC-backed companies entirely within Thailand will quickly find themselves constrained—legally, financially, and culturally.

But if you’re bootstrapping, optimizing for burn rate, and focused on building a product quietly and efficiently, Thailand can be a powerful sandbox. Living in Chiang Mai or Bangkok gives you access to high-speed internet, low overhead, decent talent, and an enviable work-life balance. The country doesn’t make it easy to build from here—but it does make it easier to build while living here.

The key lesson is this: decouple where you live from where you raise and where you incorporate. Thailand might not be the launchpad, but it can be the lab. It’s a place to build, test, iterate—and only then fundraise from somewhere better suited to capital formation.

Foreign founders need to stop expecting Thailand to be something it’s not. It’s not the next Silicon Valley, and it’s not trying to be. What it can be is a strategic base of operations—if you understand the limits and use them to your advantage.