At half past one in the afternoon on Wednesday 19 August, 307,425 people had already registered for a free AI account. The volume was heavy enough that the ID verification system slowed, and officials pointed people to the Thang Rath app instead. By that evening the figure was around 500,000. Within two days it had passed one million.

The programme is called TH-AI Passport. It is the largest digital access project the Thai state has undertaken, and almost nobody in the Chiang Mai business community is discussing what it does to this market.

The basics

What you actually get

This is not a watered-down edition. The published list includes GPT 5.6, Claude Opus 5, Gemini 3.1 Pro, Grok 4.3, Sonar Deep Research, GPT Image 2, Nano Banana Pro, Seedance 2.0 and Lyria 3 Pro. Text, images, video, music, deep research. These are the paid tiers.

Bought separately on the open market, that stack runs to several thousand baht a month. The state is paying 24.70 baht per active user per month, having bought five million seats at once.

Two practical notes. The programme covers the consumer interfaces rather than developer API access, so anyone building software still pays their own way. And detailed usage limits have not yet been published, so plan on generous rather than unlimited.

Pathumma is the quiet upgrade

Every business in this city has watched a foreign AI model produce stiff, formal, slightly wrong Thai. It mangles Northern place names. It misses the register a customer expects in a Line message. It treats Thai as a translation exercise.

Pathumma LLM is different. It comes out of the national ThaiLLM project, it runs on servers inside Thailand, and it sits in the same dropdown as the American models.

For Line broadcasts, review replies, customer service and any copy aimed at a Thai audience, this is the change your staff notice on day one. The American names get the headlines. Pathumma does the daily work here.

Why 24.70 is the number to remember

For less than a coffee at a Nimman cafe, the guesthouse in Santitham that has never paid for a subscription now runs on the same tools as a Bangkok agency. So does the massage studio on Loi Kroh with a Facebook page and no website. So does the coffee roaster in Mae Rim whose product photography has always let the brand down.

The gap between well funded Chiang Mai businesses and everyone else was, in large part, a gap in what they could afford to buy. That gap closed in an afternoon.

The catch: 30 days, then coursework

Access is not unconditional. Users get roughly 30 days, after which continued access depends on completing courses from a library of more than 96, built on the UNESCO AI Competency Framework with material from Google for Education, Microsoft Elevate and OpenAI. Completion earns certificates and points, and points unlock the higher Innovator tier.

The design is deliberate. This is a skills programme with tools attached, not a tools giveaway with courses attached. It also means the registration figure and the eventual active user figure will separate, and the second number is the one that describes the real market.

The bit nobody has said out loud

Registration is for Thai nationals aged 15 and over. There is no expatriate route.

Inside a single Chiang Mai office, this creates something with no precedent. The Thai marketing coordinator has Claude Opus 5 through a free account. The foreign owner sitting three metres away is paying for it personally or working on a free tier.

Two things follow.

Capability shifts toward Thai staff. This is a genuine argument for delegating more, and for handing local teams work that foreign management has been holding onto.

Thai-owned competitors just upgraded their entire workforce at no cost. Any business here that depends on its foreign management for content, research and analysis is about to be outrun by companies where everybody got the tools.

Your staff will use this at work. Set the rules first.

The government has been explicit that SME entrepreneurs and workers are a target group. Your team will use it for work. Some already registered.

Here is where your own compliance obligation sits. Under Thailand’s Personal Data Protection Act, you remain the controller of your customers’ personal information regardless of which platform an employee pastes it into. That is true of every AI tool, every messaging app and every free service your staff use, and it has nothing to do with this programme in particular.

Know what the platform handles. It collects name, national ID number, occupation, income bracket, location, device information and the content of AI conversations including uploaded files. Conversation data is retained for up to a year. The ministry states that personal data and behavioural data are stored and processed in Thailand under the PDPA with cybersecurity safeguards in place, and that the contract prohibits providers from storing or reusing citizen data to train models. Model inference itself runs on international infrastructure, as it does with any global AI service.

A front desk staff member drafting a reply to a guest complaint moves that guest’s name, booking reference and grievance into a third party system. The programme advises users not to enter sensitive information, which is sound advice. Acting on it is your job, not the platform’s.

No business in Chiang Mai has a written policy for this, because until last week there was nothing to write one about.

Where advantage goes now

Producing a decent social post, product description or customer reply has stopped being a skill worth having. Five million people acquired it in a fortnight.

The revealing statistic is not about tools at all. Research released by AWS this year found 43 per cent of Thai businesses now use AI consistently, up from 32 per cent, while only 21 per cent have a formal AI strategy. Adoption is wide and shallow. Most businesses use AI to produce the same things faster, rather than to reconsider what they produce.

Three things become more valuable from here.

Verified information about your actual business. Ask any model about your restaurant and it assembles plausible sentences from whatever it can find. It cannot invent that the kitchen closes at nine, that the upstairs room seats 24, or that you have run the place since 2011. That exists only where you have published it clearly and consistently. Businesses that have done that work become the answer. Businesses that have not become the gap in the answer.

Your own data. Booking patterns, customer history, supplier terms, ten years of knowing which week in November goes quiet. None of that sits in any model. The businesses that pull ahead this year are the ones feeding their own information in, rather than asking a tool to guess at context it does not have.

Deciding what is worth making. Output is now close to free, so the market fills with competent, forgettable work produced by people who suddenly can rather than people who should. Choosing what to make was never a technology problem, and it has just become the entire game.

Five things to do this month

1. Write the policy. One page. What staff may and may not put into AI tools, all of them, not just this one. Customer names, contact details, bookings, health information, financial records, employee files, anything received in confidence. In Thai and English. Have people sign it.

2. Let your team register, then train them. Registering before 30 November grants the higher tier. Your Thai staff get a capability upgrade you do not pay for. Take it, and spend an hour explaining how you expect the tools to be used.

3. Check what AI already says about you. Ask three different models about your business. Where the answer is wrong, thin or missing, fix the underlying information on your website, your directory listings and your Google Business Profile. Everyone is about to publish more. Only businesses with verified data underneath get cited.

4. Move the work around. Push Thai-speaking staff toward the tasks where these tools give them real leverage. Move senior attention toward deciding what is worth producing at all.

5. Do not hire on certificates. Credentials from this programme start appearing on CVs by the fourth quarter. Give candidates a real task from your business instead. The certificate proves they finished a course. The task tells you whether they can think.

Two numbers to watch

Active users against registrations. The contract pays only for people who actually use the platform, so the active figure is the one that describes real adoption in this market. The gap becomes visible by October.

Course completion at day 31. Access continues for users who finish training. That threshold determines how many of the five million are still working with these tools in the fourth quarter, and therefore how much the competitive floor has genuinely moved.

Keep your own copy of everything

One piece of practical hygiene that applies to any platform you do not own. Keep your prompts, templates, workflows and outputs stored somewhere under your control. Programmes end, terms change, and a twelve-month access window closes in August 2027. The value your team builds over the next year should live in your business, not only inside somebody else’s login.

Chiang Mai has spent a decade with a quiet division running through it. The foreign population arrived with skills and subscriptions. The Thai-owned commercial base ran on Facebook, Line and word of mouth. That division shaped who competed with whom, and who never had to.

On 31 August, five million Thai citizens receive tools that cost everyone else a credit card to reach. The course requirements will thin the numbers considerably, and shallow use will limit what most people get out of it. Neither changes the floor this puts under every competitor in this city.

Businesses that treat this as free software will produce more content and win nothing. The ones that treat it as the moment tools stopped being the advantage, and move their effort to verified information, their own data, and better decisions about what to build, will finally get paid for having done the harder work all along.

Ask any assistant for the opening hours of a small business in Chiang Mai and the answer arrives in a confident, complete sentence. Check that sentence against the business itself and the confidence turns out to be unearned more often than the fluency suggests. The systems producing these answers have no mechanism for signalling the difference between a fact retrieved and a fact assembled, so a guess and a certainty leave the model looking identical.

That gap has now been measured, and the measurement contains an uncomfortable finding for every small operator in this city.

Small businesses absorb the error rate

Searchable, an AI visibility platform, ran more than 13,000 prompts through ChatGPT, Perplexity and Gemini about real London companies, comparing small and medium enterprises against firms of 500 employees or more. Every answer was checked against verified records including Companies House filings and official company biographies. Across the full sample, 93% of companies had at least one basic fact hallucinated or missing from an assistant’s answer.

The distribution of that error is the part that matters for anyone running a business here.

Half of the SMEs in the study received at least one outright fabricated fact, against 32% of large companies, a rate 56% higher. Assistants confidently stated false information about SMEs at 5% against 2% for large brands. Key information went missing entirely on 6.3% of SME queries and 4.8% of large company queries. Brand name confusion, where a model attributes one company’s details to another, occurred at 4% for SMEs and 0.7% for large brands, a fivefold difference. Services were described accurately 87% of the time for SMEs and 93% of the time for large brands. Aggregated across every prompt, 11 in 100 questions about SMEs returned false or missing information against seven in 100 for large companies.

The three categories the models handled worst were company size, contact details and founding year. Those are the facts a customer needs before they walk through a door.

The study covered London rather than Chiang Mai, and the specific percentages do not transfer directly to a Thai market with a different language mix and a different indexed footprint. The mechanism transfers completely. Local Falcon’s analysis of the same data puts the cause plainly: even a business with an accurate, well-optimised website struggles to surface reliably against a competitor carrying substantial third-party validation across the web. Models fabricate where the public record is thin, and the public record is thinnest around businesses that nobody other than the business itself has ever written about.

Thailand is further into this than most markets

The assumption that AI search is a Western phenomenon arriving here on a delay does not survive contact with the adoption data.

DataReportal’s Digital 2026: Thailand report counted 67.8 million internet users at the end of 2025, putting online penetration at 94.7%, alongside 56.6 million social media identities equal to 79.1% of the population. Social identities grew by 7.5 million in a single year, a 15.2% increase ranking among the fastest in the Asia-Pacific region. The typical Thai internet user spends around 34 hours and 32 minutes online each week.

Microsoft’s country-level adoption data records Thai AI usage growing 36.2% between the first half of 2025 and the first quarter of 2026, the second largest increase globally behind South Korea and roughly double the United States rate of 19%. The same analysis notes that adoption in low and middle income countries is growing at more than four times the rate of the wealthiest nations.

Platform concentration here is unusual. Statcounter data from December 2025 gives ChatGPT 74% of Thai AI chatbot traffic, above its global average, with Gemini at 16%, Perplexity at 7%, Copilot at 2% and Claude under 1%. Thailand also remains one of the most Google-dominant search markets in the world, with Google holding approximately 99.56% of Thai search traffic in early 2026. A Chiang Mai business therefore faces a narrow and specific exposure: ChatGPT for conversational discovery, and Google AI Overviews for everything else.

Thai businesses have adopted the technology enthusiastically. The UOB Business Outlook Study 2026, surveying 265 Thai business owners and senior decision makers, found more than seven in 10 Thai SMEs implementing AI and more than eight in 10 using digital tools, both above the regional average. Very few of them have audited what the technology says about them.

The Thai language problem nobody is costing

There is a second exposure specific to this market, and it receives almost no attention in the local marketing conversation.

Large language models perform measurably worse in lower-resource languages, a pattern documented well enough in the research literature to have its own name. Work presented at EACL 2026 on hallucination detection across languages found that task accuracy drops sharply when models move from English to lower-resource languages, across factual recall, STEM and humanities domains. A parallel study on factual accuracy in English versus low-resource languages found models frequently perform better in English even on questions rooted in local context, with a higher tendency toward hallucination in the local language.

Thai carries additional structural difficulty. The language has no spaces between words, which complicates tokenisation, and Thai discourse norms soften definitive statements in ways that introduce apparent uncertainty into otherwise factual content. Dedicated Thai-adapted models exist, including Typhoon and the SEA-LION family, yet none of them powers the assistants Thai consumers actually use.

The practical consequence for a Chiang Mai business is a two-sided risk. A business documented only in Thai carries a thinner English record for models that reason best in English. A business documented only in English disappears from Thai-language queries entirely. Businesses serving both a Thai domestic market and an expatriate or tourist market need their core facts stated cleanly in both languages, in visible text, on surfaces that get crawled.

The confidence gap runs in both directions

Executives trust these systems more than the systems have earned. Workiva’s 2026 Midyear Executive Benchmark Survey, published in August, polled 2,272 finance, risk and sustainability professionals including 847 C-level executives, alongside 367 institutional investors. It found that 84% of executives are at least somewhat confident in the accuracy of AI output without human review, broken down as 39% somewhat confident and 45% very confident, while 26% report that internal audits caught AI errors which reached external audiences or board members. Only 11% believe their organisation’s data quality is sufficient for AI use, and 89% of the institutional investors surveyed are concerned about the accuracy of AI-generated information in disclosures, with 47% actively looking for such errors.

Consumers have moved the other way. Fractl, working with Search Engine Land, surveyed 1,008 United States consumers and 150 marketers in the second quarter of 2026, repeating questions asked a year earlier. The share finding AI more helpful than traditional search fell from 82% to 54% in twelve months, a 28-point drop. The group actively rating AI as less helpful grew from 3% to 17%, close to six times larger. Over the same period, 70% reported using AI for search more than they did the year before, and only 3% reported using it less.

Two details in that dataset complicate the standard demographic assumptions. Baby Boomers now find AI search more helpful (63%) than Gen Z does (47%), meaning the cohort with the most exposure is the most disillusioned. And the share of consumers saying heavy brand use of AI would reduce their trust in that brand roughly doubled from 20% to around 40%.

Local discovery has shifted faster than general search. BrightLocal’s Local Consumer Review Survey 2026, a representative panel of 1,002 United States adults published in February, found consumers using AI tools to find local business recommendations rising from 6% to 45% in a single year. That makes AI the third most-used local discovery channel behind Google and Facebook, ahead of Yelp and Tripadvisor. Google’s own share of local business discovery fell from 83% to 71% across the same period. BrightLocal’s supplemental AI trust report breaks the figure down further: ChatGPT was used by 31% of consumers for business recommendations, Google AI Mode by 23%, and 64% of consumers aged 30 to 44 have asked AI for a business recommendation against 24% of those aged 60 and over.

What people do after the answer appears

Yext surveyed 3,848 consumers globally in 2026 about local search behaviour, with an AI-user subgroup of roughly 1,630 respondents. The headline number reshapes how visibility should be understood: only 5% of consumers move directly from an AI answer to a purchase.

Everyone else verifies. After receiving an AI recommendation, 53% run a Google or Bing search to confirm or learn more, 49% visit the business website directly, 42% click through to the sources the AI cited, 28% look for reviews on Google or similar platforms, and 20% check social profiles. Those rates hold almost constant regardless of stated trust levels. In the same survey, 75% of AI users rate their trust in AI local recommendations at four or five out of five, and 59% say that trust has grown over the past year, and they verify anyway.

The Yext data also establishes a spending threshold that determines where this matters commercially. The median amount consumers globally are comfortable letting an AI spend without review is 25 United States dollars. Every commercially meaningful local decision, from a hotel booking to a dental appointment to a contractor quote, sits above that line.

What tips the decision once a consumer starts verifying is review signal. Yext found star ratings on third-party platforms ranking first among purchase influencers after an AI recommendation, review recency second, word of mouth from a trusted contact third, and review content and sentiment fourth. BrightLocal puts hard floors under those signals: 47% of consumers will not use a business with fewer than 20 reviews, and 31% will only use one rated 4.5 stars or higher, up from 17% a year earlier.

One counterweight belongs in the record, because the verification story is often told too neatly. GatherUp research reported by Search Engine Land found that 67% of consumers do not rigorously fact-check AI sources before choosing a local business. The two findings coexist because verification is uneven rather than absent. Consumers check something, and what they check is rarely the full source trail. A wrong answer that survives a casual glance at a business website still costs the booking.

The schema correction

The standard remedy sold against this problem is structured data. Add JSON-LD markup, define the business as a machine-readable entity, and AI systems read the facts directly instead of guessing. The 2026 evidence does not support that claim, and the gap between the claim and the evidence has become the most expensive misunderstanding in local marketing.

Ahrefs published a controlled study in May 2026, authored by Louise Linehan and Xibeijia Guan. The team began with an analysis of 6 million URLs which found that pages cited by AI were almost three times more likely to carry JSON-LD. Rather than publish that correlation as a finding, they tested it. They identified 1,885 pages that added JSON-LD for the first time between August 2025 and March 2026, matched each against control pages from other domains with similar pre-existing citation levels, and measured citations across Google AI Overviews, Google AI Mode and ChatGPT for 30 days either side of the change.

Google AI Mode rose 2.4% and ChatGPT rose 2.2%, both statistically indistinguishable from zero. Google AI Overviews fell 4.6%, a decline the authors report as statistically real while declining to attribute it to the markup itself. Four separate tests pointed the same way, including an event study checking for pre-existing divergence between the two groups.

The explanation for the original correlation is straightforward. Structured data lives on well-maintained, technically competent sites, and those sites also publish better content, earn more references and rank better in conventional search. The markup was riding the signal rather than creating it.

Ahrefs cross-referenced a separate experiment by searchVIU, which tested five major systems, ChatGPT, Claude, Perplexity, Gemini and Google AI Mode, for real-time schema use when fetching a page. None of them read it. During direct retrieval, every system extracted only visible HTML and ignored JSON-LD, Microdata and RDFa entirely.

Google states the same thing in its own documentation, which says plainly that no new machine-readable files or markup are required to appear in AI features. John Mueller has said structured data will not make a site rank better and that most sites see no visible change from adding it.

Three honest caveats belong alongside this, and any consultant presenting the study without them is misrepresenting it. Every page in the Ahrefs treated group already carried 100 or more AI citations before the change, so the study answers what schema does for pages already visible rather than what it does for a business with no footprint at all. The study pooled all schema types together, so type-specific effects remain unisolated. And Microsoft’s Fabrice Canel confirmed on record in March 2025 that Bing’s systems do use structured data, making Bing the one platform with a first-party confirmation.

Schema remains worthwhile as indexing infrastructure, entity resolution and rich-result eligibility. It is hygiene rather than a growth lever. Any agency in this city selling markup as an AI visibility product in 2026 is selling against the published evidence.

Where the citations actually come from

Omniscient Digital analysed more than 23,000 AI citations on branded queries. A brand’s own website accounted for 23% of them. Earned sources accounted for 48%, and commercial content published by other companies accounted for 30%, with rounding taking the total marginally over 100. Reviews and other forms of social proof accounted for 57% of citations on branded queries, and the researchers found that educational content wins during early discovery while social proof wins when buyers approach a decision.

Roughly 77% of the citation surface sits outside the domain a business controls. The same directional finding appears in independent work: a Search Engine Land analysis with Evertune covering roughly 25,000 of the most-cited URLs found that across nearly 400 million citations, 63% pointed to ranked listicles rather than brand homepages.

This is the Searchable finding approached from the opposite end. Chris Donnelly, Searchable’s co-founder, attributed the SME error rate directly to footprint, noting that platforms train on publicly available web data which skews toward larger brands. His recommended starting point was building third-party validation through directories, reviews, articles and online communities. Searchable also cites Similarweb data indicating that an AI recommendation drives roughly twice the traffic to a brand’s website within seven days compared to a competitor which was not recommended.

The two datasets converge on one conclusion. The asset determining how an assistant describes a business is not the business website, and it is not the markup on the business website. It is the density and consistency of independent references to that business across surfaces the model treats as corroboration.

Small channel, high intent

The commercial case for this work rests on quality of traffic rather than volume, and the honest version of that case includes both halves.

Multiple independent measurements agree that AI referral traffic converts far above conventional organic search. Semrush established the widely cited cross-industry baseline at 4.4 times the conversion rate of standard organic. Ahrefs found internally that AI-referred visitors made up 0.5% of sessions and drove 12.1% of signups, a 23-times differential representing the upper bound. Rocket Agency’s 18-month cross-industry study found ChatGPT visits converting at 5.1 times organic. The mechanism is intent: the model has already defined the problem, synthesised the options and produced a shortlist before the visitor arrives.

The counterweight is volume. Conductor’s 2026 benchmarks put AI referral traffic at approximately 1.08% of all website visits, despite year-on-year growth of 527%. A conversion premium applied to one per cent of traffic produces a fraction of the revenue impact of ordinary conversion applied to forty per cent of traffic.

The pressure on the older channel is what changes the calculation. BrightEdge recorded AI Overviews triggering on around 48% of tracked queries by February 2026, up from roughly 30% a year earlier, while Seer Interactive measured organic click-through rates falling 61% on queries where an AI Overview appears. Seer also found that brands cited in AI Overviews earn 35% more organic clicks and 91% more paid clicks than uncited brands on the same queries. The AI channel remains small in absolute terms. The channel it is eroding is not.

A note on the figures in circulation

Several numbers travel widely in this field without a traceable source, and an article about machine-generated misinformation has an obligation to hold its own figures to the standard it asks of the machines.

Claims that schema makes content 36% more likely to appear in AI summaries, that it produces 2.5 times higher citation rates, or that businesses lose 60% of visibility without it, do not resolve to published methodology. As of March 2026 there were no peer-reviewed studies on the effect of schema on AI search visibility. The 2024 Princeton and Georgia Tech GEO paper cited constantly in schema discussions tested in-content strategies such as adding citations and statistics, which worked, and did not test schema at all.

Two further figures in wide circulation deserve flagging. The claim that a specific high percentage of local SMEs lack a GEO plan has no identifiable primary source. The documented version comes from Centerfield research shared with Search Engine Land, which found 63% of marketers saying their company is not investing time or budget in GEO, only 9% with resources allocated to it, and 33% claiming a good or expert understanding of GEO against 72% for conventional SEO.

Where a figure below carries vendor research rather than independent study, the vendor is named. Readers can weigh the incentive accordingly.

The audit any owner can run this week

The practical sequence follows from the evidence rather than from the sales pitch, and the first step costs nothing but an hour.

Interrogate the assistants directly. Ask ChatGPT and Gemini the questions a customer asks. Opening hours. Address. Phone number. Services offered. Price range. Ask in Thai and in English, because the answers diverge. Record every response and mark each error.

Trace each error to its source. Wrong facts almost always come from a stale listing, an aggregator nobody claimed, or a page that states the information inside an image, a PDF or a booking widget. Retrieval systems read rendered text and ignore everything else.

State the facts in visible text. Opening hours, address, phone number, services and pricing belong in readable sentences on the website, in both languages where both markets matter. Dated first-party statements give retrieval engines something specific and recent to cite.

Reconcile every external listing against that source. Conflicting addresses across secondary platforms give a model competing candidates and no basis for choosing between them, which is precisely the condition under which fabrication occurs.

Check that AI crawlers are not blocked. Many sites block OAI-SearchBot, PerplexityBot, ClaudeBot and Google-Extended through default security settings without the owner knowing.

Build presence on the surfaces carrying the citation weight. Directories, review platforms, local publications and community references supply the corroboration owned channels cannot generate alone.

Re-run the audit quarterly. Corrections take weeks to months to propagate, and new stale listings appear continuously.

Where Golden Pages fits

Golden Pages was built on the assumption that a verified directory listing does two jobs at once, and the 2026 data confirms both.

The first job is corroboration. A verified, human-checked listing adds an independent reference to a business at exactly the layer where roughly 77% of AI citations originate, and where thin-footprint SMEs currently lose to larger competitors by a factor of five on brand confusion alone. Searchable’s own recommendation to businesses appearing incorrectly in AI answers was to build third-party validation through directories.

The second job is verification. Of the consumers who receive an AI recommendation, 42% click through to the cited sources and 53% run a confirming search. A listing agreeing with the business, the reviews and the assistant closes that loop. A listing contradicting any of them breaks it, and the consumer moves to a competitor whose record is consistent.

Membership of the Chiang Mai Business Network adds the layer no crawler manufactures, which is a record of businesses that other businesses in this city have actually dealt with. Peer endorsement was the strongest signal in local commerce before assistants arrived. A technology that fabricates facts about small companies at 5% has raised its value rather than reduced it.

The next era of local discovery belongs to businesses whose facts agree with themselves everywhere a machine reads and everywhere a customer checks.

On the surface, this looks like an immigration story. But read it properly, and it is in fact a compliance story. Where the compliance failure belongs mostly to the business that employed them.

Why “they already had a permit” is not the same as “they were legal to work there”

A Thai work permit is not a general licence to work. It is issued against a specific employer and a specific job, and it records the province where that employer operates. Section 20 of the Alien Working Act sets out these particulars: the employer, the nature of the work, and the area in which it is carried out. Move to a different employer, take on a different role, or work in a different province, and the permit as issued no longer covers you, even if it has not expired and even if your visa status is otherwise in order.

This does not mean the permit pins you to one street address. A landscaping crew, a cleaning contractor’s team, or a construction gang, moving between client sites every day under the same employer and the same job description, is working exactly as the permit describes. What the law tracks is who you work for and what you do, not which garden you happen to be standing in on a given afternoon.

This is the point that gets missed by both sides. The worker assumes that holding a permit at all means they are covered. The employer assumes that hiring someone who already has a permit removes the need to check anything further. Both assumptions are wrong, and the law places a duty on both parties to correct the record.

The two routes into legal employment, and why they are often confused

Foreign workers in Thailand generally arrive at a legal work status through one of two structures.

The standard work permit route, usually paired with a Non-Immigrant B visa, applies to professional and skilled hires and is the structure most familiar to foreign-owned SMEs. The permit is issued against a specific company, role and salary threshold.

The MOU route applies to Myanmar, Lao and Cambodian nationals brought in under the bilateral labour agreements between Thailand and those countries. This is a separate administrative pathway with its own quota and registration process, and it is the route that covers the great majority of migrant labour in food service, agriculture, construction and light manufacturing in Chiang Mai. An MOU worker is registered to a specific employer in the same way as a Non-B holder. The mechanism is different. The obligation is the same.

The obligations, set out by party

The worker’s duty. Under the Alien Working Act and the 2017 Royal Ordinance on Management of Employment of Foreign Workers, a permit holder who changes employer, changes job, or changes work location must notify the registrar within 15 days. Failing to do so is itself an offence, separate from the question of whether the new job would otherwise have been permitted.

The employer’s duty. The obligation is not one-sided. An employer taking on a foreign worker, including one who already holds a permit issued for another employer, must notify the Department of Employment within 15 days of the hire, and must notify again if the person’s employment ends, for any reason. The employer also carries a duty under Section 14 to ensure the work the person actually performs matches what is stated on the permit. A mismatch between the job on paper and the job on the floor is a compliance failure attributable to the business, not the worker.

What it costs when it goes wrong, by tier

The consequences scale with the nature of the breach, and employers should understand the tiers rather than treat this as a single flat risk.

Notification failure alone (permit valid, correct role, but the registrar was never told of the change) draws an administrative fine, generally up to 20,000 baht, applied to the worker, the employer, or both.

Employing outside the scope of the permit (wrong role, wrong site, or an MOU worker used outside their registered employer) escalates the exposure. Reported penalty ranges for employers here run from 10,000 to 100,000 baht per worker on a first offence, rising to imprisonment of up to one year and fines between 50,000 and 200,000 baht per worker on repeat offences, together with a three-year prohibition on the business employing any foreign national. Some recent commentary on 2025 to 2026 enforcement puts the ceiling for aggravated cases considerably higher. The exact figure that applies depends on which section is engaged and whether the Department of Employment treats it as a first or repeat matter, which is a question for the facts of each case rather than a fixed number.

For the worker, the consequences sit outside the fine schedule entirely. Detention, prosecution, and deportation are the practical outcome, and a criminal record from this kind of case can close the door to future legal work in Thailand. The business absorbs a fine and a compliance headache. The worker absorbs the loss of their livelihood and, often, their ability to return.

The point most employers miss: your own status can be tied to theirs

If the employer, or a director or shareholder of the employing company, is themselves a foreign national holding a Non-B visa through that same business, the exposure does not stop at the fines above. A company’s right to sponsor and employ foreign workers is what a foreign director’s own Non-B extension typically rests on, alongside the usual capital, staffing ratio and active operation requirements. Where the Department of Employment suspends a company’s right to employ foreign nationals, or imposes the three-year prohibition that follows a repeat scope violation, the foundation supporting that director’s own visa extension is directly undermined. 

A business that gets careless about a dishwasher’s paperwork can end up putting its own foreign owner’s legal basis to remain in the country at risk. This is rarely how the exposure is explained to SME owners, and it should be.

What “properly linked” means in practice

The standard is not complicated, and it does not require legal training to apply consistently.

Every foreign worker on the payroll, MOU or Non-B, should be checked against three questions: is the employer named on their permit this business, is the role stated on their permit the role they are actually doing, and is the province stated on their permit the province they are actually working in. Any change to any of those three answers triggers a 15-day notification window, and it is the employer’s job to start that process, not to wait for the worker to raise it. An existing permit from a previous job is not a shortcut. It is the starting point for a fresh registration, not a substitute for one.

There is aother check that sits before all three of these, and it is the one businesses often miss. The company’s registered business objectives, filed when it was set up, must support the job being sponsored. A mismatch here is where many applications stall, since Labour and Immigration do not always accept the same fix as sufficient, and a business can satisfy one only to be told by the other that the file is still incomplete.

None of this is difficult to build into a standard onboarding checklist. What it requires is treating a foreign worker’s paperwork as a live compliance record that changes when their circumstances change, rather than a document that is checked once at the point of hire and then filed away.

The standard this should be judged against

The Fang case will likely be filed away as a minor immigration story about two dishwashers. It should not be. It is a clean illustration of a system where the paperwork failure sits with the employer as much as the worker, but the consequences fall almost entirely on the worker. An employer who hires someone already holding a permit, puts them to work without updating the registration, and leaves them exposed for five months has not saved themselves an administrative step. They have transferred the entire risk of that shortcut onto the person with the least power to absorb it.

Getting this right is not a matter of avoiding an inspection. It is a matter of not building a business on the assumption that someone else’s paperwork problem is not yours to fix.

Thailand has a longer history than most people realize in this space, and it is exactly the kind of territory CMBN thinks its members should have on their radar.

Owning the asset instead of owning the company

The single biggest shift to make is this. In a conventional investment you own a claim on a company’s future profits. In the models below you own the underlying productive asset itself, and a specialist operator does the work of growing, tending and harvesting it on your behalf, taking a fee or a share of the output rather than a share of a business.

That distinction matters practically as well as conceptually. If you own shares and the company fails, your claim is often near worthless. If you own the trees or the animals themselves, the physical asset still exists even if the operator managing it changes, though a poorly managed asset carries its own risks, which is exactly why due diligence on the operator matters more here than almost anywhere else.

Trees as an asset class

Thailand has become a genuine hub for a specific style of agricultural investment. Buy a set number of trees, a company plants, tends and harvests them for you, and you take a share of what the harvest sells for. It has grown well beyond a single crop.

• Agarwood, known in the trade as oud, is probably the best known example. The Aquilaria tree produces a resin used in luxury perfumery that can sell for tens of thousands of dollars per kilogram once distilled into oil, and Thailand hosts several operators running managed Aquilaria plantations for this purpose.
• Kynam, a rare and self inoculating variety of the same Aquilaria family, commands a premium over standard agarwood because it triggers its own resin production naturally, rather than needing the artificial inoculation ordinary agarwood trees require.
• Durian and mango plantations follow a similar pattern in Thailand, though some are structured as straightforward company shareholdings rather than direct tree ownership, a useful reminder that both models exist side by side in this market.
• Kratom, a leaf from a tree in the coffee family native to Thailand, offers something a little different again, a monthly leaf harvest rather than a once every few years wood or fruit harvest, so income can start flowing sooner and more steadily once the trees mature.

In every case the buyer owns the tree, or a defined block of trees, not a share in the company managing them. All backed up by purchase and management agreements with the plantation.

The herd, without the land

An idea worth putting alongside trees, buying into a herd rather than a plantation. Foreigners cannot own land in Thailand, which rules out the more familiar route of simply buying a smallholding, but owning livestock carries no such restriction, since an animal is a movable asset rather than real property.

This model already works elsewhere. In South Africa, a company called Livestock Wealth lets investors buy into cattle directly, a share of a herd, a pregnant cow, a calf, with a partner farmer supplying the land and doing the husbandry, and the investor cashing out when the farmer buys the animal back at the end of the term. It has built several thousand investors and paid out tens of millions of rand in profits since 2015.

Nothing quite like it appears to exist yet at scale in Thailand, which is arguably the opportunity rather than the obstacle, a herd based model built specifically around the land ownership problem foreign investors here actually face.

The old school parallel, futures

For anyone who has traded commodity futures before, there is a direct Thai equivalent worth knowing about. The Thailand Futures Exchange, TFEX, lists rubber futures, unsurprising given Thailand is the world’s largest natural rubber producer and exporter. Two versions trade, a standard cash settled contract, and a second version that actually delivers the physical rubber at expiry rather than just settling the price difference in cash.

That physical delivery contract is about as close as Thailand gets to a straightforward pork belly future, a paper contract against a real physical commodity, traded through a licensed exchange rather than a private company’s own scheme.

Why this isn’t shares, and what that means

None of the tree or herd models described above are securities in the legal sense. Buying trees or animals and paying someone to manage them is structured as a private sale and service contract, buy the asset, pay a management fee, share in the proceeds, not a claim on a company’s equity or profits. Thailand’s Securities and Exchange Commission regulates the licensing of anyone soliciting or advising on securities investment specifically, and these arrangements sit outside that framework altogether.

That cuts both ways. On one hand it means no listing requirements, no prospectus, no drawn out regulatory approval before a scheme can launch, which is part of why this space can move quickly and offer the returns it does. On the other hand it also means there is no SEC oversight sitting behind the promises made, no regulator to complain to if a harvest never materializes. The due diligence a broker or a fund prospectus would normally do for you, checking the operator’s track record, visiting the site, asking hard questions about what happens if the manager disappears, becomes entirely the investor’s own job. That is exactly why CMBN encourages members to do their own homework on any operator before committing capital, and why meeting one in person, as below, is a good place to start.

Come and meet one

The best way to understand this kind of investment is to meet someone running one. This month we’re opening our own doors for the first time, hosting the CMBN lunch at our offices, with a presentation beforehand from Kelvin Baird, director of International Plantation Solutions (Thailand), who grows both Kratom and Kynam on his own plantation in Ko Kha district, Lampang.

Kelvin’s own story is a useful reminder of what to look for in an operator. He was an investor in agarwood trees himself for six years, with a plantation company in Johor Bahru, Malaysia, before ever becoming an operator. He has since consulted on similar Kynam, Gaharu and durian plantations across Malaysia and Indonesia supporting roughly 1,000 investors. Kelvin visits his Lampang plantation around ten times a month to personally oversee planting, monitoring and harvest.

A few years ago, a foreign entrepreneur wanted to open a restaurant in a beach town. He found a local agent who promised to have the company running within two weeks, and the agent delivered. The Thai shareholders on the registration were the agent’s uncle, his sister, and his mother, none of whom had ever set foot in the restaurant, and none of whom received a share certificate, a shareholders’ agreement, or so much as a copy of the company’s memorandum.

When it came time to show that the family had actually paid in their 51 percent of the two million baht in registered capital, there was no money to show, because there had never been any money. The agent’s accountant solved that the way these things usually get solved: the capital was booked into the company, then lent straight back out again to a director. On paper, the company was compliant. In reality, three people who had never discussed running a business now legally owned the majority of one, and at least one of them didn’t fully understand what they had signed.

This is not a rare story. It is closer to the default setup used by agents who understand company registration but not company operation. This is exactly the kind of structure the Thai government has spent the last year building the tools to find.

What Thailand Actually Means by “Nominee”

Under the Foreign Business Act, a “nominee” is a Thai national who holds shares in a company on someone else’s behalf, so the company looks Thai owned on paper while a foreigner actually controls it and takes the economic benefit. It doesn’t matter whether the nominee is a professional fixer’s relative, a rice farmer paid a small fee, or a Thai spouse who never intended to be one. The law looks at who genuinely put in the money and who genuinely makes the decisions, not whose name sits on the share register. If the Thai shareholder is there to satisfy the paperwork rather than to own shares and run part of the business, the arrangement is illegal, full stop.

What the Law Actually Lets You Do

Here is what tends to get lost in the panic: the 51/49 split isn’t a workaround, it’s the actual rule, and there is nothing wrong with a foreigner holding 49 percent of a genuine Thai company. The Foreign Business Act splits business activities into three lists. 

List 1 is closed to foreigners entirely, covering things like media, rice farming, and land trading. 

List 2 needs Cabinet level permission and covers activities touching national security or culture. 

List 3, where most restaurants, retail shops, consulting firms, and hospitality businesses sit, is open to foreigners who obtain a Foreign Business License, a real approval process, not a nominee workaround.

And if you want majority or full foreign ownership, there are legitimate roads to it. BOI promotion can grant a qualifying company 100 percent foreign ownership. The US Thai Treaty of Amity gives American citizens the same in most sectors, provided the ownership is genuinely American, no nominees allowed here either. We’ll cover exactly how those two routes work, and what it takes to qualify, in a follow up piece. The point for now is simply this: if you’re structuring around 49 percent because you assume it’s your only option, it usually isn’t. It’s worth finding out which door actually fits your business before anyone hands you a stand in shareholder.

Same Split, Three Different Companies

A 51/49 company holding a villa with no staff, no income, and no activity is a different animal from a 51/49 company running a real business with a foreign investor sharing in genuine profit and loss, and both of those are different again from a 51/49 company where the foreigner holds a work permit and actually runs the place day to day. All three are legal on paper. Only two of them are legal in substance, and the third needs to be able to prove it, because “the foreigner runs everything” is also, on its own, one of the eight things investigators are trained to look for.

And this isn’t only a 51/49 problem. A company can be 100 percent Thai owned, with no foreigner anywhere on the share register, and still trip the same control test if a foreigner on a work permit is the one actually running it day to day, making the real decisions while the Thai owner stays passive. The indicator that matters there is control, not equity, and it doesn’t care whether a foreigner holds a single share.

The Eight Things Investigators Actually Check

The Department of Business Development works from eight main indicators to spot a nominee structure. Read on their own they sound abstract. Here is what each one actually looks like once a business is running.

Two Very Different Kinds of Business Own the Same Problem

Not every 51/49 company carries the same risk and lumping them together is where a lot of the current anxiety comes from. A company set up purely to hold a piece of property for a foreigner’s personal use is, structurally, close to indefensible under points 6 and 7 above. There’s no business to point to, no revenue, and no reason for a Thai majority shareholder to exist except to satisfy the ownership rule. An operating business, a restaurant, a dive shop, a design studio, a consultancy, is a different case entirely, if the Thai shareholders are real investors or real operators and the paperwork backs that up. If you’re not sure which category your company actually falls into, that’s worth finding out before an inspector does.

When the Majority Shareholder Is Family

A lot of foreigners in Thailand run their business through a Thai spouse or an adult child rather than a stranger found through an agent, and it’s worth being direct about this: family ownership is not automatically a nominee arrangement, and the law doesn’t treat it as inherently suspicious. A Thai wife or child who is genuinely a business partner, who has a say in decisions, who shares in the profit, and who understands what she owns, is simply a majority shareholder, exactly as the law intends.

The risk shows up when the same eight questions above get asked of a family member and the answers look identical to a stranger’s: no real involvement, no real income from the business, no ability to explain what the company does. Love and trust inside a family don’t change what an investigator is measuring. If your wife or your son is the majority shareholder on paper, it’s worth being able to answer, honestly, whether they’d pass points 2, 4, and 8 above.

The Person Whose Name Gets Used

Almost everything written online about this topic is written from the foreigner’s side of the table: what the foreigner risks, what the foreigner should avoid. There’s a second person in every nominee arrangement, and they usually carry more of the real world consequence with less of the legal understanding. That second person is the Thai national whose name sits on the share register, often with no real stake, no real say, and no real understanding of what they’ve signed.

As of August 1st this year, the Department of Business Development started requesting bank statements directly from Thai nationals who co invest with foreigners, comparing what they declared as their investment against what actually moved through their accounts. This isn’t a future risk, it’s happening now, rolling out first across the provinces where foreign investment is heaviest, including Phuket, Chonburi, Chiang Mai, and the Bangkok metro area. The numbers from the first batch of provinces alone are striking: more than 18,000 companies flagged as very high risk, and another 14,000 flagged high risk, out of roughly 120,000 companies under review nationally.

Most of us have heard of, or know, a Thai person with almost no income who is somehow a shareholder in ten or more companies, often a relative or acquaintance of an agent, sometimes a rice farmer was paid a small fee for the use of their name. As the DBD’s records digitise and cross reference against tax and welfare data, that person becomes findable in a way they never used to be, and the consequences land on them personally, not just on the foreigner’s business. A young shareholder on paper can find themselves unable to get a student loan, because they appear, officially, to already own a stake in a two mor more million baht company. Someone receiving a state welfare or disability payment can lose it entirely, because the same records show them as a company shareholder, regardless of whether they’ve ever seen a baht of the company’s money.

None of this is about stopping ordinary Thai people from investing in businesses. It’s aimed squarely at stopping a rice farmer from being the fall guy for someone else’s company.

How Do You Know If Your Company Is at Risk?

Most foreign owned businesses in Thailand were never built to deceive anyone. They were built quickly, by an agent who was good at registration and never asked whether the shareholders understood, could afford, or benefited from what they were signing. The gap between “technically registered” and “actually defensible” is often down to missing paperwork: a missing shareholders’ agreement, a missing dividend history, a missing paper trail for the capital that was supposedly paid in.

Before DBD’s checks reach your province, or your shareholder’s name, it’s worth finding out where you actually stand. LAN Business Consulting can run an independent review of your company’s structure and financials against exactly the eight points above and tell you plainly whether what you have would hold up. If it wouldn’t, better to know now than to find out from an official investigation.

Get an independent review of your company’s structure and financials from LAN Business Consulting.

Walk through the herb section of Warorot Market on any weekday morning and something has changed. On several of the older stalls, tucked between the dried galangal, the bundles of lemongrass, and the jars of tamarind paste, there are small packets of dried leaves and a powder the colour of green tea, with a handwritten sign in Thai and sometimes a rough English translation alongside it. Kratom. Legal since 2021, now sitting openly next to the ginger and the holy basil, as if it had never been anywhere else.

For many people in this city, it is still unfamiliar. Kratom is not a northern plant. Ask most Chiang Mai residents about it and the reaction is often a vague recognition: something from the south, something that used to be illegal, something associated with a particular kind of person in a particular kind of place. That reputation is worth examining. The business story developing around kratom in northern Thailand is being shaped by people who understand where it came from, and who are moving quickly to position the north as something new.

Where kratom comes from

Kratom is a tree. Its scientific name is Mitragyna speciosa, and it is a close relative of the coffee plant. At low doses it works just like a strong cup of coffee: stimulating, sharpening focus, reducing the feeling of tiredness. At higher doses the effect shifts, and it becomes calming, pain-relieving, and sedating. The same plant, the same leaf, with different effects depending on how much you take and which type of leaf you are using.

For centuries, the plant has grown widely across southern Thailand, Malaysia, and Indonesia. Farmers, fishermen, and rubber tappers chewed the fresh leaves to get through long days of physical labour in intense heat. Traditional healers brewed it into tea and used it for fever, pain, coughs, and muscle ache. In Muslim communities across the southern provinces of Pattani, Yala, and Narathiwat, where alcohol is not permitted, kratom tea was served as a communal drink at social gatherings.

This pattern is not uniquely Thai. Every civilisation that required sustained physical labour in harsh conditions developed a local plant that helped people get through the day. In the Andes, indigenous communities chewed coca leaves for altitude fatigue and endurance, a practice going back thousands of years that had nothing to do with the extracted substance that later created the international drug crisis. Across South and Southeast Asia, betel and areca nut were chewed for the same reasons: mild stimulation, hunger suppression, and a shared social ritual that marked the rhythm of working life.

In East Africa, khat filled the same role. Across the Americas, tobacco. Every culture found its own plant, shaped by whatever grew in the soil around it, but the underlying need was identical: something to help people work harder, rest better, or simply get through the day together. Kratom was Thailand’s version of that same story. It was not exotic or recreational. It was simply useful, woven into daily life the way coffee is woven into ours now, and carrying the same social weight that betel still carries across much of Asia today.

The law that changed everything

In the 1940s, something political happened that shaped kratom’s reputation for the next eight decades. At the time the Thai government was collecting significant tax revenue from opium. Farmers across the south, many of whom could not afford opium and had no particular interest in it, were using kratom instead. Not because kratom and opium produce the same effects, they do not, but because kratom was free, it grew on their land, and it worked well enough for the purposes they needed it for. The government saw this as a problem. Every kratom leaf chewed by a farmer was revenue that did not flow to the state, and as long as kratom was freely available, it kept a ceiling on how many people would ever turn to opium, and opium was where the tax revenue sat.

In 1943, the Kratom Act was passed and the plant was declared illegal. Overnight, something that farming communities had used for generations became a criminal matter. A farmer with kratom leaves on his property could be arrested. The reasoning was not complicated: the law had very little to do with public health and everything to do with protecting a tax base.

That law stayed in place for 78 years. Across three or four generations of rural Thai families, people carried criminal records for using a plant their grandparents had grown freely and their parents had used without question. Many continued using it anyway, because in communities where the village healer had prescribed kratom tea for pain and fever for as long as anyone could remember, the idea that it belonged in the same category as dangerous narcotics was simply not credible.

The reputation kratom carries today was shaped not by doctors or researchers but by a revenue calculation made by a government ministry in 1943, and the stigma that followed outlasted the law that created it by decades.

What the leaf is: the three types

Kratom leaves are not all the same, and the difference is not about which tree they come from. It is about when each individual leaf is picked. The same tree carries leaves at different stages of maturity at the same time, and the colour of the vein running through each leaf shows where it is in that cycle. Experienced farmers harvest selectively, reading vein colour, leaf size, and stem texture to decide which leaves to pick for which product. There are three main types.

White vein leaves are the youngest, harvested early in the plant’s growth cycle. They produce a stimulating effect, similar to a strong cup of coffee: energy, focus, and reduced fatigue without the jitteriness that too much caffeine can bring. This is the type that farmers traditionally used to start a long working day.

Green vein leaves sit in the middle of the maturity cycle, and the effect reflects that middle ground. Green kratom offers a mild lift in energy and mood with some physical ease, making it the gentlest introduction for someone who has never used it and the type most likely to appear in the cafe and wellness products now emerging in Chiang Mai.

Red vein leaves are the most mature, harvested later and often processed through an additional drying or fermentation stage. The result is calming rather than stimulating: red kratom is most associated with pain relief, muscle relaxation, and sleep, and it was the type favoured by traditional healers for medicinal use. It also carries the highest concentration of the active compounds that regulators pay closest attention to.

The colours are not added or artificial. They come from the leaf itself, from the age of the plant at harvest and how it is handled afterwards. This is also why growing conditions matter. Different soil, different altitude, and different temperature ranges produce different profiles in the leaf, which is why northern Thailand, with its cooler nights, higher elevation, and mineral-rich mountain soil, is now attracting serious attention from kratom operators who understand that where a plant grows shapes what it becomes.

That is the story the south built over centuries. The north is just beginning to write its own.

Kratom today: not just a leaf

The popular image of kratom is a farmer chewing a leaf in a field. That image belongs to a different era. What is being traded today is a commercial product range that would be familiar to anyone who has worked in the health supplement or wellness industry.

At the base of the product range is dried and powdered leaf, the raw material that overseas buyers import by the tonne. Above that sits a growing range of processed products: kratom tea bags, ready-to-drink beverages, liquid extracts, capsules, and tablets. In southern Thailand, street stalls sell kratom syrup by the glass alongside fresh leaf tea, the same way a coffee cart sells espresso alongside whole beans. In Chiang Mai, some of the dispensaries that built their retail format around cannabis have pivoted to kratom as cannabis regulations tightened sharply through 2025. Online platforms carry licensed Thai kratom products for domestic delivery, and the export framework introduced in 2025 has opened the door to international shipping for operators who hold the right licences.

A kratom tree needs two to three years from planting before it produces leaves in sufficient volume for commercial harvest. After that, what you harvest and when depends entirely on what you are producing. White vein leaves come from the youngest growth and can be picked earlier in the cycle. Red vein requires patience: you are selecting the most mature leaves on the tree, which means waiting longer between harvests of that specific type. The farmer who wants consistent red vein production is managing a harvest schedule, not just waiting for a season. That harvest rhythm, compounding across multiple cycles per year from the same trees, is what makes an established plantation significantly more attractive economically than an annual crop that pays once.

The product range is still developing. Most of the global market still trades in powder and raw leaf, but the fastest growth is happening further up the value chain. Capsules, tablets, and beverages are where the premium pricing sits, where consumers get a consistent and measurable dose, and where product travels cleanly through regulated export channels. Thai operators who are thinking about this market at the manufacturing level, rather than just the farming level, understand that the real margin is not in the raw commodity but in what you do with it before it reaches the buyer.

Who buys it

The global kratom consumer is predominantly American. The United States accounts for roughly 41 percent of global market share, a market valued at around USD 2 billion in 2025, serving an estimated 1.7 million regular users who spend close to USD 880 each per year. These are committed buyers purchasing a product they use regularly, often as a substitute for prescription pain medication or as a daily energy supplement.

Competing products exist: kava for relaxation, CBD for pain, and prescription alternatives for withdrawal management. But none of them replicate what kratom does across all three use cases simultaneously. That combination is what drives loyalty in this consumer base and what makes supply reliability so commercially important to American buyers.

The consumer profile matters for Thai exporters because it shapes what the market actually wants. The American kratom buyer skews toward middle-aged adults managing chronic pain, fatigue, or the aftermath of opioid dependency. They are experienced users who have formed preferences around strain, product type, and brand. They read lab test results. They notice inconsistency between batches. They will pay more for a product they trust, and they will move away from a supplier who delivers variable quality without warning.

Europe represents the second significant market at around USD 357 million, though it is fragmented across 27 jurisdictions with very different legal positions. The Netherlands is the continental hub, generating an estimated USD 80 to 120 million annually while handling the majority of European import volume through Rotterdam. Germany follows as the largest consumer market, though a 2025 court ruling now requires operators to hold a licence before selling commercially. The United Kingdom and France maintain complete bans. Belgium joined them in June 2024.

Within Thailand, the domestic market has always existed. In the south, kratom stalls and street vendors have been part of daily life for generations, operating quietly through the decades when the plant was technically illegal and continuing openly since legalisation in 2021. What has changed is not the demand but the legitimacy: sellers no longer operate in the shadows, products can be labelled and standardised, and the market can now be measured and supplied commercially. The Thai consumer is a very different buyer from the American one: the price point is lower, the product is simpler, and the cultural relationship with the plant is embedded rather than acquired. Both markets matter, but they require entirely different product and pricing strategies.

The segment growing fastest globally is not bulk powder. It is high-value processed products: capsules, extracts, and ready-to-drink beverages. Online sales now account for 53.8 percent of the extract market. But the opportunity is not limited to manufacturers. The kratom value chain has multiple entry points, each with its own commercial logic.

The farmer grows and harvests the leaf. The raw material producer dries, processes, and tests the leaf to a consistent standard, confirming alkaloid levels, particle size, and the absence of contaminants, so that overseas buyers know exactly what they are purchasing. The product manufacturer converts it into capsules, extracts, or beverages to a consistent, lab-tested, FDA-registered standard. The exporter manages licensing, documentation, and international logistics. The retailer, whether a physical store, a wellness operator, or an online platform, builds the brand relationship with the end consumer. Each layer adds value. Each layer has margin. A Thai operator competing on raw leaf price is fighting Indonesia on Indonesia’s terms. A Thai operator who controls two or three layers of that chain is building something that cannot easily be replicated, and where brand trust rather than commodity price becomes the primary driver of repeat business.

Where the competition sits, and why Indonesia’s position is changing

To understand the opportunity for Thailand, you need to understand how completely Indonesia has dominated this market until now.

Indonesia’s West Kalimantan province alone cultivates kratom across 11,384 hectares, supporting an estimated 200,000 farming households who collectively export between 300 and 500 tonnes every month. The Indonesian kratom economy generates around USD 100 million in annual export revenue. Kalimantan supplies over 70 percent of the world’s kratom leaf exports. Sumatra adds significant additional volume. Between them, Indonesian provinces have supplied close to 95 percent of global demand for decades, almost entirely directed at the American market since domestic consumption of kratom is prohibited inside Indonesia.

That structure is now under pressure from the Indonesian government’s own regulation. In September 2024, Indonesia introduced formal export controls requiring exporters to hold registered status and export approval, alongside processing standards requiring powdered kratom under 600 microns. These regulations tightened further in early 2025. The intent was to support domestic value-add and protect supply sustainability. The effect for international buyers was reduced flexibility in sourcing and a forecast wholesale price increase of between 100 and 400 percent for crushed leaf.

American importers reacted quickly. Supply chain diversification became a priority. The question being asked across the US kratom industry in 2025 was straightforward: who can supply consistent, quality-controlled kratom at scale, with a clear legal framework and reliable shipping? Indonesia was no longer the only answer by default.

Thailand is the obvious candidate, and not only because of geography. Thailand has a government that has actively promoted kratom as an export crop, a regulatory framework built for commercial trade rather than retrofitted from a narcotics law, and cultural familiarity with the plant going back centuries. It also has something Indonesia does not: a legal domestic market that creates a foundation of processing infrastructure, quality standards, and product development that pure export-focused producers lack.

The constraint for Thailand is volume. Indonesian production dwarfs Thai cultivation at present. Closing that gap takes time, land, and investment. But the buyers are not waiting for Thailand to match Indonesia’s scale. They are looking for a credible second source, a reliable supplier who can deliver quality product consistently, even if the volumes are initially smaller. That is a position Thailand can occupy now, without needing to match what Indonesia has built over decades.

Malaysia adds another dimension to this picture. Kratom grows natively across northern Malaysia and has been cultivated there for generations. Growing the trees remains legal. Everything else, picking the leaves, processing them, selling or transporting them, is prohibited under the Poisons Act 1952. The result is a significant volume of kratom moving informally across the Thai-Malaysian border, which is already affecting supply in southern Thailand. Malaysia’s government is actively discussing legalisation, with senior ministers framing kratom as an economic crop opportunity. If that happens, a third substantial producer enters the legitimate market. For Thailand, that is another reason to move quickly while the regulatory advantage still holds.

Kratom: legal status across Asia

Understanding where kratom is legal, and where it is not, matters for anyone thinking about this market commercially. Thailand’s regulatory advantage is real, but it exists within a regional landscape that is still shifting. Malaysia is moving toward reform. Indonesia has tightened its export controls. Several other countries where kratom grows natively have no commercial framework at all. The boxes below give a current picture of where each country stands as of mid-2026. For operators building supply chains, export relationships, or product sourcing strategies, this is the starting point.

Growing kratom: what the crop offers a farmer

A kratom tree needs two to three years from planting before it produces leaves in sufficient volume for commercial harvest. After that initial establishment period, the economics change significantly. A two-week harvest cycle means a farmer with a productive stand of trees is earning from the same plants continuously rather than waiting for an annual cycle. Yield per tree varies depending on age, size, and growing conditions, but multiplied across an established plantation and compounded over multiple harvests per year, the output rhythm is one that most annual crops cannot match.

Input costs are real, though they vary considerably by farm management approach. Commercial plantations deal with a familiar range of tropical crop challenges: caterpillars that feed on leaves, fungal infections that cause brown spots and leaf damage, and insect pests including spider mites, whiteflies, and aphids. Responsible operators use organic pesticide programmes built around neem oil, insecticidal soap, and similar low-chemical inputs. This matters for two reasons: Thai FDA product standards require clean raw material, and several US states now legally require third-party testing for pesticide residue, heavy metals, and microbial contaminants before products can be sold on their market. Suppliers who cannot produce a clean certificate of analysis do not get into those markets. Well-managed mature trees develop some natural pest resistance over time, but younger plantations and high-yield cultivation require active crop management throughout.

For northern Thailand, the agricultural case has an additional dimension. The conditions that make the north different from the south, cooler nights, higher altitude, and mineral-rich mountain soil, are the same conditions that influence the alkaloid profile of the leaf. Research coordinated through the Narcotic Crops Survey and Monitoring Institute in Chiang Mai has confirmed that growing environment affects leaf quality in measurable ways. Northern kratom is already being positioned by some vendors as a distinct product with its own profile, following the same commercial logic that turned northern Thai coffee and Chiang Rai tea into premium categories separate from generic commodity production.

Mr. Pornchai Padmindra, CEO and founder of Dr. Kratom Bio and Dr. CBD, and President of the Thai Industrial Hemp Trade Association, led outreach events across northern and central northern Thailand in 2025, including Chiang Rai and Kamphaeng Phet, meeting directly with farmer networks. The company trained farmers on cultivation standards, harvest timing, and export readiness, and committed to purchasing their output at fair prices. That outreach was not charity. It was a buyer securing future supply from regions it believes will produce a differentiated product. That is the commercial signal that serious northern operators should read carefully.

How much is Thailand growing today

The honest answer is that precise national cultivation figures for Thailand are not yet publicly available in a verified form. The Office of the Narcotics Control Board and the Thai FDA hold registration data for commercial cultivation, but a consolidated national acreage figure has not been published in any source this article can verify. The figures in this section should be treated as directional until confirmed with the ONCB directly.

What we do know is the shape of Thai cultivation. The bulk of it sits in the south: Surat Thani, Phang Nga, Krabi, Trang, Ranong, Chumphon, Nakhon Si Thammarat, and Narathiwat are the established provinces. Narathiwat in particular has restarted formal cultivation since legalisation, drawing on deep traditional knowledge and proximity to Malaysian supply networks. Indonesian operators have also moved into southern Thailand directly, cultivating kratom on Thai soil to access the Thai regulatory framework and its export licence pathway.

Commercial kratom farming in the north is still in its early stages compared to the established southern provinces. Chiang Rai is the province attracting the most active commercial interest, with organised buyer outreach already under way. Chiang Mai’s role is more likely to be in processing, product development, and export logistics than in primary cultivation, given land use patterns and the presence of the business infrastructure needed to move product from farm to international market.

The comparison with Indonesia is instructive even without a precise Thai figure. Indonesia’s West Kalimantan alone covers 11,384 hectares under kratom cultivation. Thailand is not close to that number today. But Indonesia built that over decades of unregulated growth without a domestic commercial framework. Thailand is building from a different starting point: regulated, quality-controlled, and oriented toward premium positioning from the beginning. The ceiling for Thai production is not set by what Indonesia has done. It is set by how much land Thai farmers are willing to commit to a crop that now has a clear legal channel to one of the world’s most valuable herbal markets.

What this means for Chiang Mai operators

Kratom is a legal agricultural export crop in Thailand, and the market it serves is a legitimate, established consumer base in the United States and Europe. Indonesian farmers have supplied that market at scale for decades without difficulty. Thai operators entering this space are not doing anything unusual. They are joining a global agricultural supply chain with clear demand, willing buyers, and a functioning regulatory framework on the Thai side.

The cautions are specific rather than general. Building a consumer-facing brand in markets where kratom occupies a legal grey zone at state level requires careful navigation of advertising restrictions and payment processing limitations that apply at the American retail end of the chain, not to Thai farmers or bulk exporters. Operating in northern Chiang Mai, where the plant is less culturally familiar than in the south, means that community relationships and local communication matter. And as with any regulated agricultural export, documentation, licensing, and product testing are non-negotiable. These are operational considerations, not reasons to hesitate.

The entry points are distinct and do not require vertical integration. A farmer growing and harvesting leaf for sale to a processor has a straightforward commercial model with no unusual complexity. A processor converting raw leaf into tested, graded bulk material for overseas buyers is operating a clean industrial business. A manufacturer producing FDA-registered capsules, extracts, or beverages for export is working in the health supplement sector with a defined regulatory path. Each layer stands on its own. An operator does not need to own the whole chain to build a viable and profitable business in this market.

What every entry point shares is a requirement for rigour. FDA recalls in 2024 and 2025 flagged heavy metals, Salmonella contamination, and undisclosed synthetic compounds in kratom products sold across the United States. While most of those failures occurred at the American processing and packaging stage, they trace back directly to raw material quality at source. Thai operators supplying clean, consistently tested raw material are not just meeting a standard. They are removing the primary variable that causes American processors to fail their own compliance checks. The category will be punished for shortcuts. Thai operators have an opening to compete on quality, not just price, and that framing fits the Chiang Mai business community’s established positioning across coffee, cacao, and wellness.

Kratom will not be the headline story for Chiang Mai business in 2026. Cannabis dominated that space. After decriminalisation in 2022, more than 18,000 shops opened across Thailand in what felt, at the time, like an economic transformation. By early 2026, over 7,000 of them had closed after failing to meet the compliance standards introduced when the government restricted cannabis to medical use only. The operators who had invested heavily in a market without a stable legal foundation paid the price. Kratom has been built on a different logic from the start: legislation before commerce, quality standards before market expansion, and a government that has consistently framed it as an agricultural export crop rather than a lifestyle product. For operators in this community who are ready to move carefully and build properly, the opportunity is real and it is open now.

Sources

Thai FDA. Kratom Plant Act B.E. 2565 (2022) and subsequent ministerial regulations, including 2025 amendments to permissible mitragynine intake levels and export framework.

Office of the Narcotics Control Board (ONCB). Export licensing framework and consignment notification requirements, 2025.

Formichella and Sritawat Attorneys at Law. Thailand’s Kratom Regulations: A Comprehensive Overview, 2026.

Tilleke and Gibbins. Thailand Decriminalizes Kratom in Amended Narcotics Act, 2021.

EZ Kratom / Coherent Market Insights. Regional kratom market statistics and global market valuation, 2024-2025.

Maximize Market Research. Global Kratom Market Size and Forecast, January 2026. Market value USD 2.56 billion in 2025, forecast USD 7.79 billion by 2032 at 17.2% CAGR.

Prince of Songkla University / PubMed Central. Seasonal and geographic variation in alkaloid content of kratom in Thailand, 2023.

Narcotic Crops Survey and Monitoring Institute, Chiang Mai. Fieldwork on northern Thailand alkaloid profiles.

Nation Thailand. Dr. Kratom Bio farmer outreach events, Chiang Rai and Kamphaeng Phet, May and June 2025. CEO Mr. Pornchai Padmindra, company-reported export volumes 2025.

Thai.news / IDPC. 4×100 mixing debate and political watch points, August 2025 and February 2026.

The Thaiger / Bangkok Post. Sugano Matha MP statement on kratom reclassification, August 2025.

Siam Legal / Nation Thailand. Thailand cannabis recriminalisation, shop closures, and regulatory tightening, 2025-2026.

Indonesia Ministry of Trade. Permendag No. 20 and 21 of 2024. Kratom export regulations effective September 2024, tightened 2025.

ANTARA News. Indonesia kratom export volumes, West Kalimantan, 2025.

ScienceInsights / Amazing Botanicals. Historical and ethnobotanical records of kratom use in Southeast Asia.

Kratomit.eu. Top kratom-producing regions ranked by volume, 2026.

UUM Journal of Legal Studies. Enforcement status of the Poison Act 1952 against kratom offences in Malaysia, 2020.

EUKRATOM / Powder Rooms. Kratom legal status by European country, updated 2025.

Kats Botanicals / Kratom Spot. Kratom leaf maturity, vein colour classification, and harvest timing.

US FDA. Kratom product recalls and import detentions, 2024-2025.

The short version, for owners who do not work in marketing

• Google now answers the question itself, in its own words, above the list of links. Most searches end there without a click.
• Search traffic to small sites has collapsed. Chartbeat data puts the drop at roughly 60% for small publishers over two years.
• In May 2026, Google published its own written instructions on what makes a business visible inside AI answers. The document is free, short, and written for non-specialists.
• There is no trick, no special code, and no agency shortcut. Google rewards material a competitor cannot copy: your own numbers, your own cases, your own experience.
• An AI answer names two or three businesses. Coming eighth in your category produces nothing, where it once produced enquiries.
• AI referrals remain small in volume. This is a shift in how customers decide, not yet a replacement traffic source.

Three things to do. Read Google’s own guide to generative AI features before you pay anyone to interpret it. Publish content only your business is able to produce. Measure how often your name appears in AI answers instead of counting visitors.

A search for “best boutique hotel Chiang Mai” now returns a paragraph before it returns a hotel. The paragraph names two or three properties, explains in a sentence each why they are worth booking, and places small citation links beside the text it drew from. Below the paragraph sits the older version of search, the ten ranked links that built an entire local marketing industry, and most people never scroll that far.

Two things happened in Google Search over the past three months, and the second matters more than the first. Google redesigned how its AI layers present the web, which was expected. Google also published official documentation explaining how to be visible inside those layers, which was not. Simon Moser set out the commercial consequences in Entrepreneur on 6 August. The documentation removes the last excuse available to any business owner, which is not knowing what the rules are.

In early May, Google updated AI Mode and AI Overviews, the AI-generated layers that sit above conventional results. The updates added suggested follow-up angles at the end of an answer, site previews when a user hovers over a link, prominence for news publications a user already subscribes to, and citations positioned next to the specific claims they support.

These read as interface adjustments, and they are not, because together they confirm that the synthesised answer rather than the ranked list is now the thing Google delivers. The user reads a response and then decides whether any onward click is necessary at all.

The traffic consequences are recorded. Chartbeat data covering thousands of sites shows that search referral traffic fell by roughly 60% for small publishers and 47% for mid-sized ones across two years, with large publishers losing 22%. The gap between those figures is the story. Businesses with a recognised name and a direct audience absorbed the change, and businesses that depended on being found absorbed the full force of it. Our quarterly digital audits find the same pattern across Chiang Mai, most visibly for operators whose enquiries once arrived through blog content and category pages.

In mid-May, Google released its first official guide to optimising for generative AI features. The central position is that optimising for AI search remains SEO, performed properly, rather than a separate discipline requiring separate tooling.

The guide is most useful for what it rules out. There is no special schema markup that unlocks AI visibility, and Google names llms.txt files, content chunking, and AI-specific rewriting as things site owners can ignore. Manufacturing brand mentions across unrelated websites is far weaker in effect than the agencies selling it suggest. What the documentation rewards consistently is content an AI system cannot assemble from anywhere else: original research, first-hand experience, subtopic depth, material that exists because a specific business did the work.

On 5 June, Google extended its long-standing advice on hiring SEO help with a new document on assessing third-party tools, services, and advice, naming generative engine optimisation and answer engine optimisation as service categories for the first time. Google states plainly that it does not evaluate or endorse third-party services, and it supplies vetting questions for owners to use directly. Does the provider cite official Google documentation. Is the AI optimisation advice consistent with what Google has published. Anyone in this city who has sat through a pitch promising guaranteed placement in AI answers now has a free instrument for testing it.

Two claims in the current coverage deserve more scepticism than they receive, and both cut against the urgency being sold around this subject.

The first is the idea that AI referrals are quietly replacing lost search traffic. They are not, at least not yet at any meaningful scale. Chatbot referrals grew sharply through 2025 and still account for less than 1% of publisher page views. The visitors who arrive from an AI recommendation do convert at a higher rate, because the comparison stage happened before they landed, and a higher conversion rate on a very small number is still a very small number.

The second is Google’s own position, which is that AI Overviews increase search usage overall and produce higher-quality clicks. Google has published data supporting this and has an obvious commercial interest in the conclusion. Both things are consistent with the publisher figures, because total search activity grows while the share of that activity reaching any individual small site falls.

The honest reading sits between the two. What has changed decisively is where the buying decision gets made. What has not changed is that traffic volume is no longer the number worth defending.

Dozens of Chiang Mai businesses compete for the same handful of commercial queries in every sector. Spa treatments, international schools, dental work, coworking, wedding venues, long-stay accommodation. In the ranked-list era, placing eighth in that field still produced enquiries, because visitors browsed the field and built their own shortlists.

That behaviour is ending, and the market structure changes with it. When an assistant returns three recommendations in conversational form, most users accept the three. There is no page two to venture onto. The recommendation is the shortlist, and the shortlist is the market.

The distance between being cited and not being cited is therefore not a matter of degree. A business that appears in AI answers accumulates advantage with every query in its category, and a business that does not appear is invisible to a growing share of the people actively looking to buy from it. Google’s new features create a few additional slots inside the answer through suggested angles and community perspectives, and every competitor in the category is contesting those same few slots.

Chiang Mai carries a specific disadvantage here. A large share of local business content is commodity content, produced cheaply, describing what any competent operator in the sector also offers. AI systems synthesise that material from a thousand interchangeable sources and cite none of them. The operators with genuine first-hand material, the vineyard that logs its own harvest data, the clinic that publishes treatment outcomes, the hotel that documents what guests actually ask for, hold an advantage they have not yet priced.

Run this test before you read any further

This takes 20 minutes and costs nothing.

1. Write down the five questions a customer asks immediately before buying from you. Use their words, not your marketing words.
2. Put each one into Google AI Mode, ChatGPT, and Gemini. Add “in Chiang Mai” where it applies, and run the Thai-language version as well if you serve Thai customers.
3. Record every business named in each answer. That list is your real competitive set, and it will differ from the one in your head.
4. Check what is cited beside the answer. Where the citation goes to a booking platform or a listings site rather than to any business website, the businesses in that category have handed the customer relationship to a third party.
5. Repeat the same five queries in 90 days. The direction of travel matters more than any single result.

Read Google’s optimisation guide before commissioning anyone. It is short and written for non-specialists, and it now functions as the benchmark against which every AI visibility proposal is measured. A vendor whose recommendations contradict it is selling something else.

Move content strategy from volume to depth. One piece of original research on your own sector outperforms 20 posts assembled from the same sources your competitors used. This is the single change with the clearest return, and it is also the change most local businesses resist, because it requires the business to have something to say.

Change what the dashboard measures. Raw traffic describes a shrinking game. Track how often the business is named in AI answers for the queries that produce revenue, and track the conversion rate of visitors arriving from AI referrals. Fewer clicks are doing considerably more work, and a dashboard built for 2023 hides that entirely.

Budgets are already moving. PMG, one of the largest independent marketing agencies in the world, advises clients to pilot generative engine optimisation at 1.5 to two times their existing search spend, according to Matt Allfrey, its head of SEO for EMEA. A Semrush study published in June 2026, covering 481 marketing professionals, found more respondents planning to invest in AI search optimisation than in conventional SEO, at 38% against 36%. In the same survey, 85% said AI has already changed how they approach search.

The businesses that will hold the recommendations in Chiang Mai 18 months from now are making one decision this quarter, which is to publish something a competitor cannot copy and to stop measuring the wrong number. Everyone else is reading traffic reports and waiting for figures that are not coming back.

If you run the 20-minute test above and your business does not appear, the next question is why, and that usually comes down to whether an AI system can reach your pages at all. CMBN Media Services runs a digital audit that checks exactly that: crawlability, structure, and whether your information is readable and attributable to you. Most Chiang Mai sites we audit fail before content is even part of the conversation. Email gee@chiangmaibusiness.net with your URL and we will run it and send you the findings.

A single pet in a Thai household now generates more than six times the annual spending it did under an older model of ownership. That figure, rather than the rising number of animals, is reshaping the market.

The growth of Thailand’s pet market is usually explained by population. More households keep animals, so the market expands. That account is accurate and incomplete.

The stronger engine is spending per pet. Budgets once concentrated on food and basic care now extend to premium nutrition, preventive healthcare, services, and products that owners believe improve their animals’ quality of life.

The result is a market expanding several times faster than the broader economy. ttb analytics estimates it will reach approximately THB 92 billion in 2025, a rise of 13.2 per cent year on year, before passing THB 100 billion in 2026.

Market size is the smaller question. The larger one is where the new money flows, because the answer changes how we judge which businesses are growing, which are falling behind, and where the real opportunities sit.

Pet humanisation has become shorthand for the whole industry, but its economic meaning is precise. It describes a change in how owners see their animals, from something to be fed and kept alive to a member of the family that deserves the best available care. When that status changes, spending changes with it.

The figures ttb analytics uses to compare traditional ownership with humanisation show the scale of the difference. Average annual spending rises from approximately THB 7,910 per pet to THB 50,500 per pet, a gap of more than six times.

The size of the increase is not the whole point, because owners are not only spending more, they are reallocating what they spend. Under traditional ownership the budget sits on food, treats, basic accessories, and treatment once an animal falls ill, while grooming, pet hotels, preventive checks, and health monitoring occupy little or no space in the wallet.

Once a pet becomes a family member, the budget does not simply grow. It spreads into new categories, from premium nutrition and vaccinations to annual health checks, care services, products that reassure owners their pets are well, and, more recently, pet insurance. The shift is from spending that keeps a pet alive to spending that gives it a better life.

Pet population growth alone therefore cannot explain the market. One animal today generates several times the economic value it did in the past, depending on whether its owner treats it as an animal in the household or as a member of the family, and once the status changes the money does not reach every business equally.

The additional money does not spread evenly across categories. Comparing traditional ownership with humanisation shows the extra THB 42,590 spent per pet each year following a distinct pattern.

Source: Author’s calculations based on average spending data presented by ttb analytics, drawing on information from Thailand’s Department of Business Development and ENLITE. These figures compare two groups of pet owners at a single point in time. The interpretation of where incremental spending flows is therefore inferred from differences between the groups rather than from longitudinal tracking of the same individuals.

Almost half of every additional baht still goes to food, but increasingly to higher-value products: premium nutrition, therapeutic diets, and food owners believe will improve their pets’ health.

More than 39 per cent of the new money flows into the two categories changing most. Healthcare spending rises almost sevenfold and moves from treating illness after it appears toward routine checks and prevention, while grooming and pet hotels, absent from the traditional budget, become a category in their own right.

Accessories take only 13.1 per cent of the additional spending, though they account for 19 per cent of the traditional budget. Owners are not spending less on accessories, since the absolute figure still rises almost fivefold. As the wallet grows, accessories capture a smaller share of the new money than other categories do.

The new money chooses its destination. When incremental spending concentrates in certain categories, not every business grows at the same rate, and the statement that Thailand’s pet market is growing is accurate but no longer sufficient. The question is which businesses are capturing the new money and which are being left behind. That is the subject of the next article.

Thailand’s pet market is not only growing. It is changing in nature.

Historically most of the market’s value came from everyday necessities: food, treats, bowls, leashes, toys, and basic accessories. Owners bought products to keep their animals fed, safe, and alive.

As pets move toward the centre of the family, expectations rise with them. The question is no longer whether a pet has enough to eat. It becomes whether the food supports long-term health, whether illness can be caught before symptoms appear, who provides care when the owner is away, and how an owner knows the animal is genuinely well.

Spending is moving away from physical goods alone and toward care, outcomes, and assurance. Pet food no longer sells nutrition alone but the confidence that the owner chose correctly. A health check does not only sell a blood test but the chance to catch a problem before it becomes serious. Grooming and pet hotels do not sell convenience but peace of mind when owners cannot look after their pets themselves.

Thailand’s pet industry is moving from a pet product market to a pet care market, from one measured by the number of products sold to one defined by the quality and continuity of care across an animal’s life.

Products are not becoming irrelevant. Food still captures the largest share of new spending and accessory spending still rises in absolute terms. Products are now expected to do more, and they must support health, solve a specific problem, connect to a service, or at least reassure owners that their spending contributes to a better life for the animal.

The change in how Thai households spend does not stop at the household. It runs into one of the country’s fastest-growing industrial sectors.

Thailand is one of the world’s largest pet food exporters, ranked second behind Germany, and the Department of International Trade Promotion expects exports to approach USD 3 billion in 2026, worth roughly THB 105 billion. Much of that value comes from premium wet cat food made from tuna, the same premiumisation that owners are paying for at home. Industry figures presented at Pet Fair Southeast Asia 2025 now describe pet food as a new S-curve for Thai manufacturing and target USD 5 billion in exports by 2030.

The domestic and export sides share a base. The premium nutrition capturing nearly half of every additional baht at home comes from companies that also supply export markets, which gives the trend a manufacturing foundation rather than a purely consumer one. Household expectations and export standards rise together, and each pulls the other upward.

The drivers behind pet humanisation are demographic. An ageing population, smaller households, and a falling birth rate move animals toward the centre of family life. Chiang Mai carries these conditions in concentrated form, with a large share of older residents, long-stay foreign residents, and single-person households, and industry research already names the city among the places where demand for premium pet products is strongest.

That is why the care market is visible on the ground here. The growth shows up in the veterinary clinics, grooming and boarding services, and pet-friendly cafes that have opened across the city. For owners, the question is no longer whether these services exist but which provider to trust with an animal they treat as family.

This is a larger story than a rise in pet ownership. The market grows because the relationship between people and animals is changing, and when that relationship changes the household budget changes with it. That shift is already reorganising the industry at home and feeding an export sector the state now treats as strategic. It will reshape the businesses responsible for medical care, treatment, and animal-health products first.

Most business owners in Chiang Mai file human trafficking under causes rather than operations. It belongs to the NGO sector, to donation boxes and awareness weeks, to a category of problem that sits somewhere outside the working day.

The 2026 theme makes that filing harder to justify. The United Nations Office on Drugs and Crime has named it Trapped Behind the Scam, and the subject is people recruited through job offers, moved across borders, held inside compounds and forced to run online fraud against strangers.

Read that description again as an employer rather than a citizen. Recruitment. Contracts. Documents. Wages. Bank transfers. Border movement. Every mechanism in this crime is a business mechanism, operated badly and deliberately. Which means the countermeasures are business mechanisms too, and a good many of them sit inside the ordinary running of a company.

The Shape of the Problem

The UN Human Rights Office estimates at least 300,000 people are working inside scam operations across Southeast Asia, with victims identified from 66 countries as of March 2025. An earlier assessment counted at least 120,000 people held in Myanmar and around 100,000 in Cambodia.

The industry generates enough revenue to be measured against national economies. Figures released this week by the International Organization for Migration put the combined annual losses from scam offences across East Asia, Southeast Asia, Australia and New Zealand at somewhere between 88 and 114 billion US dollars for 2025 alone. Researchers at EOS Collective, who documented the industry in the book Scam: Inside Southeast Asia’s Cybercrime Compounds, describe an economy that relocates rather than shrinks each time a crackdown lands.

Thailand is not a distant observer of this. The February 2025 operation on the Myanmar border saw around 7,000 people released and moved into Thai territory, with International Justice Mission and other agencies supporting victim identification at the border and in Bangkok. In June 2026, the Civil Society Network for Human Trafficking Victim Assistance estimated more than 5,300 people remained held at four locations near the border, and the nationalities on that list included Thai citizens alongside Brazilians, Kenyans, Malaysians, Filipinos, Russians, Rwandans, Ugandans and Zimbabweans.

Thailand has been ranked Tier 2 in the United States Department of State Trafficking in Persons Report for four consecutive years, a placement the Royal Thai Government has formally acknowledged, and the government has publicly set Tier 1 as its target. In 2025 Thai authorities recorded 279 trafficking cases and 438 identified victims. Analysts at the Kyoto Review of Southeast Asia argue the national response still runs behind the pace of the criminality.

Where Chiang Mai Sits

Northern Thailand is a recruitment ground and a transit route. That is the uncomfortable local fact.

The recruitment happens in plain sight. In January, the Minister of Labour issued a public warning about rising numbers of Thai nationals deceived into travelling abroad for what is advertised as online work with high income and no required skills. In practice they arrive to find their passports taken and their days spent running fraud. Thai PBS Verify has repeatedly traced the Facebook pages behind these adverts, several administered entirely from outside Thailand.

In May, the Ministry of Labour and the Anti-Trafficking in Persons Division moved against a ring that took between 130,000 and 150,000 baht each from more than a hundred Thai job seekers on the promise of farm work in Australia and New Zealand. The company was not licensed. The office was empty.

The people most exposed to this are the same people your business competes for: young, mobile, digitally capable, looking for better money than the local market offers. Hill tribe communities, stateless residents and migrant workers from Myanmar and Laos sit at higher risk again, because irregular status removes the option of asking anyone official for help. UN human rights experts have named poverty, poor working conditions and the shortage of regular migration pathways as the drivers that push people into reach.

Three Ways This Touches a Local Business

As an employer. Your recruitment practices either widen or narrow the gap that traffickers operate in. Fee-charging brokers, held documents, withheld wages and verbal contracts are the exact conditions that make a worker vulnerable to a better offer from a worse employer. UNODC has published key indicators of trafficking for forced criminality that are worth reading once, even outside a compliance role.

As a handler of money. Thailand’s Royal Decree on Measures for the Prevention and Suppression of Technology Crimes (No. 2), in force since April 2025, brings businesses inside a shared liability framework for financial fraud. Corporate penalties apply unless a company can demonstrate compliance with applicable standards. Mule account offences carry substantially increased fines and prison terms, and the Bank of Thailand has been tightening account controls alongside new limits on bank accounts and SIM cards. Your staff are being recruited as mules through the same social media channels that recruit for the compounds.

As a public-facing operator. Hotels, guesthouses, transport operators, tour companies, cafés and shops see people in transit. Front-line staff are often the only people outside a criminal network who observe something wrong and are in a position to act.

How Local Business Owners Can Actually Help

None of what follows requires a CSR budget. Most of it is administration.

1. Adopt the employer pays principle. Workers should never pay to get a job with you. No agency fees, no deposits, no recruitment costs deducted from wages. Debt at the point of hire is the single most reliable predictor of exploitation, and the Issara Institute has spent years documenting how first-mile recruitment debt travels through Thai supply chains.

2. Verify any agency you use. Only agencies licensed by the Department of Employment may legally place workers, and licence status is checkable at doe.go.th/ipd before money changes hands. Apply the same check to any agency approaching you with labour.

3. Never hold identity documents. Keep copies, return originals. Passports, work permits and ID cards belong with the worker. Retaining them is a recognised trafficking indicator and it costs you nothing to stop.

4. Contract in the worker’s language. A written contract in Thai, Burmese or Shan, with hours, wages, deductions and rest days stated plainly, and a copy the worker keeps. Verbal agreements protect no one.

5. Pay in full, on time, into an account the worker controls. Traceable payment protects both sides. Deductions should be itemised and lawful.

6. Brief your staff on mule recruitment. Anyone offering your employees money to open a bank account, lend a bank account, rent out a SIM card or receive transfers on behalf of a third party is recruiting them into a criminal offence. Say this out loud in a team meeting once a quarter. It takes four minutes.

7. Teach your front-line team what to notice. Someone travelling with a group who does not hold their own documents. Someone whose bookings, transport and payment are all controlled by a third party. Someone unable to say where they are going or who arranged it. Someone whose companion answers every question for them. Nobody is asking your staff to intervene physically. They need to know the numbers.

8. Put the numbers where staff can see them. Ministry of Social Development and Human Security social assistance line: 1300. Anti-Trafficking in Persons Division helpline: 1191. Ministry of Labour: 1506, press 2 for the Department of Employment, for verifying any job or agency. Printed on a card by the till or in the staff room, these cost nothing and remove the paralysis of not knowing who to call.

9. Audit one tier down. Ask your main suppliers how they recruit and how they pay. You do not need a certification scheme to ask a question. IOM Thailand runs a corporate programme, CREST, and supports the IRIS ethical recruitment certification for businesses that want a formal framework.

10. Hire returnees. People coming back from compounds arrive indebted, stigmatised and frequently treated as offenders rather than victims, a pattern documented in joint research by Blue Dragon Children’s Foundation and EOS Collective. They are also, very often, multilingual, computer literate and highly employable. A job is the intervention that prevents re-recruitment. Local organisations can broker introductions.

11. Use whatever platform you have. A supplier code of conduct. A line in your staff handbook. A noticeboard. A social post on 30 July, using the materials in the UNODC campaign pack. Businesses are trusted differently than campaigns are.

12. Support the organisations already doing this locally. Chiang Mai has real depth here. Urban Light works with young men and boys at risk of exploitation. ZOE International runs prevention and aftercare in the province. Rise Foundation Asia and Asia Freedom Network work regionally on survivor care, trauma recovery and policy. Freedom Collaborative coordinates a Thailand anti-trafficking community of local civil society organisations.

The Business Case, Stated Plainly

Fair recruitment reduces turnover. Written contracts reduce disputes. Traceable payroll reduces fraud exposure. Trained staff reduce liability. Clean supplier relationships reduce the risk of finding your company name attached to somebody else’s investigation.

There is also a market argument. Thailand’s tier ranking affects how international buyers, tour operators and partners assess risk in this country. Every business that tightens its own practices moves that number in the right direction, and benefits from it when it moves.

Nothing on the list above is a gesture. It is the difference between a workforce that has real options and a workforce that does not, and the recruiters running these compounds depend entirely on the second condition.

Key Numbers for Thai Businesses

1300: Social assistance and trafficking referral, Ministry of Social Development and Human Security
1191: Anti-Trafficking in Persons Division helpline
1506 (press 2): Department of Employment, to verify jobs and recruitment agencies

doe.go.th/ipd: Check that a recruitment agency is licensed

Sources and Further Reading

United Nations, World Day Against Trafficking in Persons

UNODC, Trapped Behind the Scam campaign 2026

OHCHR, report on abuses against people trafficked into scam centres, February 2026

UN News, coverage of the OHCHR scam centre findings

IOM, Trapped Behind the Scam statement and Regional Strategy 2026 to 2030

UNODC Global Report on Trafficking in Persons 2024

UNODC, explainer on trafficking for forced criminality

US Department of State, 2025 Trafficking in Persons Report, Thailand

Royal Thai Government, 2025 Country Report on Anti-Human Trafficking Efforts

Kyoto Review of Southeast Asia, Thailand’s anti-scam efforts

East Asia Forum, Southeast Asia’s whack-a-mole scam economy

Issara Institute, ethical recruitment resources for employers

IOM Thailand, ethical recruitment and supply chain management

The smoke itself is not new. Farmers across northern Thailand, Myanmar and Laos burn crop residue and forest floor litter between February and April, a practice tied to maize contracting cycles, mushroom foraging and land clearance that predates any tourism economy. What has changed is that researchers have now identified a specific concentration of fine particulate matter at which Chiang Mai begins to lose visitors, and that figure belongs in every operator’s planning calendar.

The number that turns haze into economics

The threshold is 36.835 micrograms of PM2.5 per cubic metre of air. Chiang Mai University economists reached that figure using kink regression on quarterly data from 2012 to 2018, a finding carried in the GeoJournal tourism study, whose own panel analysis across seven Thai provinces independently confirmed that rising particulate matter reduces international tourist numbers. Below that concentration, higher PM2.5 tracks alongside rising visitor numbers, because pollution climbs steadily through the dry season that overlaps Chiang Mai’s busiest tourism months. Above it, the relationship inverts, and each further increase in PM2.5 cuts the number of tourists arriving in the province. The threshold sits at Chiang Mai’s own quarterly average, which means the city spends part of every year on the wrong side of its own tipping point.

PM2.5 refers to airborne particles smaller than 2.5 micrometres, fine enough to pass from the lungs into the bloodstream. The World Health Organization sets its annual guideline at five micrograms per cubic metre. During peak burning weeks, Chiang Mai’s readings routinely run above 150, and the city has topped the global pollution rankings on multiple mornings in recent seasons.

The estimate rests on pre-pandemic arrivals data, so the threshold describes visitor behaviour before COVID reshaped booking patterns and app-checking habits. The direction of the effect holds across the wider Thai research, and the exact tipping point warrants fresh calculation on post-reopening numbers. The nonlinear shape matters as much as the figure itself, because haze does not shave a fixed percentage off arrivals every day it lingers. It behaves more like a switch, tolerated up to a point and punished sharply beyond it, which is how travellers making discretionary decisions behave.

Inside the guest room

The damage does not stop at the hotel entrance. An indoor air study of homes in Bangkok and Chiang Mai measured PM2.5 inside Chiang Mai homes at a mean of 106.80 micrograms per cubic metre during haze episodes, against 5.52 micrograms in non-haze periods. Indoor air in the north swings by a factor of roughly 19 between seasons, a range far wider than anything the same research team recorded in Bangkok.

For accommodation providers, that finding redefines the product. A guest who retreats indoors during a bad air week has not escaped the problem unless the building itself is sealed and filtered, and most of Chiang Mai’s charming older guesthouses are neither. An indoor reading below the outdoor level is small comfort when the outdoor air sits at 150 and the room still carries a heavy share of it. Properties that invest in filtration, publish indoor readings and treat clean air as a listed amenity are selling something the destination cannot otherwise supply in March.

The health ledger behind the booking data

Visitors read no research papers before they rebook, yet they breathe the same air that residents do, and repeat visits follow the experience rather than the marketing, an experience the medical literature documents in detail. A student respiratory study of 406 university students in Chiang Mai found 32 per cent reporting respiratory allergies, with quality of life scores falling across respiratory, sleep and emotional measures during the high PM2.5 season. A separate outpatient visits study worked through 216,000 hospital visits in Chiang Mai between 2011 and 2014, linking respiratory caseloads to particulate concentrations. Travellers experience the same air and adjust their plans accordingly.

What the smoke costs a second city

Chiang Mai carries more weight in this conversation than its size suggests. The Thailand Economic Monitor for July 2024 records that Bangkok’s urban agglomeration holds a population 29 times larger than Chiang Mai, the country’s next largest city, and argues that unlocking secondary cities is central to Thailand’s growth model. National tourism strategy leans on the same logic, pushing visitors and revenue beyond the capital and the beach corridors. A secondary city cannot carry that role while its worst air of the year settles over March and April, months the tourism calendar needs working hard.

Policy has started to acknowledge the stakes. Thailand’s updated National Adaptation Plan names tourism as one of only six priority sectors for climate resilience, a designation recorded in the Thailand climate report from the World Bank. Tourism accounts for 8.8 per cent of greenhouse gas emissions worldwide according to a Nature Communications study, so the sector sits within the climate agenda as both affected party and contributor. Chiang Mai faces the question at close range, because the air that clouds its dry season crosses borders and farming calendars that reach well beyond the province.

What travellers are telling the market

Demand-side data points in one direction. A DASTA presentation to the Stock Exchange of Thailand, citing Expedia Group research, reported that 95 per cent of Asia-Pacific travellers want sustainable options when booking, the highest share of any world region. The Booking.com sustainability report for 2025 adds the resident view, finding that only 16 per cent of locals worldwide believe capping visitor numbers is the answer to tourism pressure, while their leading demands are investment in transport at 38 per cent, waste management at 37 per cent and environmental conservation at 32 per cent. Chiang Mai’s residents and Chiang Mai’s guests want the same purchase, and it is cleaner air rather than fewer people.

The operator’s response

Two things have to happen at once, and confusing them is how the haze debate stalls every year. The source of the smoke has to be addressed, through the slow, cross-border work of changing how land is cleared across the region, and until that lands the businesses that depend on Chiang Mai’s first quarter have to run their year around a problem they did not create and cannot individually fix. Planning around the season is not a substitute for solving it, because it is what keeps operators solvent long enough for the solution to arrive.

The threshold number gives them a planning constant the debate has lacked. Operators who treat the burning season as a known, quantified feature of the market rather than an annual surprise hold three advantages. They price and staff the affected weeks realistically instead of discounting in panic, they invest in the one product attribute the season rewards through verified indoor air quality and say so on the booking page, and they publish honest seasonal guidance, because a guest steered toward November leaves better reviews than a guest ambushed in March, and trust compounds across visits in a way a single booking never does.

The smoke settles over March and April, the tail of the high season and the Songkran weeks that rank among the busiest of the year. A destination does not get to lose commercially important months to smoke indefinitely, and that is the case for fixing the source, made in the language of revenue rather than grievance. In the meantime, the businesses that build their year around the number, rather than hoping each burning season will be different, are the ones that will still be trading when the air finally clears.