Business online in Thailand

What legal structures are available for a business online in Thailand? 

 To launch a business online in Thailand, foreign investors generally have three primary options available: 

• Registering a Thai limited company;
• Opening a branch office;
• Establishing a representative office. 

Most online ventures opt to organize as a Thai limited company. Under the Civil and Commercial Code, this structure allows flexibility and access to the domestic marketplace. A Thai limited company necessitates a minimum of three shareholders and one director. While foreigners can hold up to 49% of shares, the majority foreign ownership restriction outlined in the 1999 Foreign Business Act applies, unless specifically promoted by the Board of Investment or exempted through a Foreign Business License.

What are the registration requirements for a business online in Thailand? 

Registration of the company with the Department of Business Development 

 The initial step in founding a business online in Thailand involves registering the company with the Department of Business Development, which falls under the Ministry of Commerce. This process includes reserving a company name, submitting the memorandum of association, convening the statutory meeting, and applying for registration. Upon approval, the company receives its registration number and can open a corporate bank account.

Obtention of the Taxpayer Identification number 

Online businesses must also register for a taxpayer identification number with the Revenue Department. If annual revenue exceeds 1.8 million THB, the company must register for Value Added Tax (VAT). E-commerce operators may also need to comply with the Electronic Transactions Act B.E. 2544 (2001) and the Royal Decree on Digital Platform Services B.E. 2565 (2022), both of which require registration with the Electronic Transactions Development Agency (ETDA) for certain platforms. While registration requirements exist, starting an online business can open many opportunities for commercial activities in Thailand.

What types of activities are permitted through online business in Thailand?

A business online in Thailand can engage in various commercial activities. These include selling goods via e-commerce platforms, offering digital services, running online marketplaces, providing digital content, or offering cloud-based solutions.. Determining the proper legal classification for different services is crucial because it affects the potential to obtain benefits from Thailand’s Board of Investment (BOI).

For instance, software development or creation of digital content may qualify a business to receive support through BOI Announcement No. Sor. 2/2557. Any activities involving personal data handling necessitates compliance with Thailand’s Personal Data Protection Act B.E. 2562 since enforcement is managed by the Personal Data Protection Committee. Meanwhile, e-payment services, online financial tools, crypto-related ventures require separate permits from the Bank of Thailand or Securities and Exchange Commission.

What are the tax obligations? 

Much like physical companies located in Thailand, online businesses are responsible for standard tax obligations. A 20% corporate income tax applies to net profits. Ongoing submissions including withholding tax and VAT (if relevant) go to the Revenue Department monthly. Social security contributions must also be paid for any employees. Careful attention to all regulatory and tax requirements helps online entrepreneurs maximize opportunities while meeting their financial responsibilities.

Online businesses that sell goods or services to Thai customers must issue tax invoices and collect VAT if applicable. The e-Tax system simplifies online filing and digital signatures. In some instances, foreign digital service providers earning income from Thai customers without a local presence are still compelled to register for VAT under the “VAT on e-Service” regulation introduced in 2021.

Does a business online in Thailand necessitate specific licenses or permits?  

Indeed, depending on the nature of activities, additional permits may be mandated. For example, two fundamental licenses are typically required to lawfully operate a business online in Thailand:

• The E-Commerce Business Notification – Any corporation conducting commercial activities online must notify the Department of Business Development (DBD) and acquire an e-commerce business registration certificate. This applies whether sales transpire through a website, social media, or third-party platforms like Lazada or Shopee. The corporation must divulge its domain name, platform type, and product or service classification. This certificate allows the corporation to operate online in accordance with the Electronic Transactions Act B.E. 2544 (2001).
• Commercial Registration Certificate – While the e-commerce notification asserts a company’s online presence, acquisition of a general commercial registration from the DBD formally establishes a business as lawfully engaged in commerce within the nation. It is a mandatory first step for both procuring a taxpayer identification number and applying for VAT enrollment. Particularly pertinent for B2C models or when interacting with Thai customers directly, this certification sanctions a firm’s commercial dealings and helps facilitate various trading functions.

These licenses must be renewed if business details change, and they must be displayed prominently on the company’s website in clear view. Businesses peddling food, cosmetics, or health products online are obligated to register with the Food and Drug Administration (FDA) and abide by their regulations. Financial or lending platforms may necessitate licenses from the Bank of Thailand or Securities and Exchange Commission (SEC) approval before launching operations.

Failure to procure required licenses can incur administrative penalties and legal consequences. It is prudent to consult with legal counsel to ensure all regulatory requirements are satisfied prior to initiating operations to avoid potential issues down the road.