Learn more about  Company Registration in Thailand

Thailand is the best place to establish a business for various reasons :

• Provides confidence to entrepreneurs and invites investors. Bangkok, one of the world’s most enticing cities, is the best in attracting foreign direct investment in the ASEAN region and creates jobs.
• Thailand is a critical entrance for companies to the AEC market, recognised as one of the greatest infrastructures in Southeast Asia.
• Foreign investment is highly welcomed and demanding.
• Thailand is well-established in promoting the safety and security of foreign investors.
• The standard rates of demise tax and business tax are minimal in contrast to Western Europe and the United States.
• Foreigners who want to establish a business in Thailand must create a company.
• It is mandatory to start a business to apply for a work permit and a non-B visa, allowing them to work and do business in Thailand. Many people from other countries, therefore, invest and establish a business in Thailand.

Obviously, the list is not exclusive, and there may be other benefits.

Foreigners are allowed to own only 49% of a Thailand company. On the other hand, the Foreign Affairs Act B.E. 2542 states that :

• A foreigner may own 100% of a company if all requirements of the FBA or the Board of Investment meeting.

• A foreigner may own 100% of the shares if the company’s purpose is limited to manufacturing goods not prohibited by the FBA.

• A foreigner may own 100% of the shares if the purpose of the business is limited to export trade.

• According to the Board of Investment, a foreigner may own 100% of the shares if the foreigner’s project benefits the country’s development.

• According to the Treaty of Friendship, a U.S. citizen can own 100% of the shares of a Thai company.

• Australian citizens are entitled to preferential treatment in certain types of companies.

To define respondents according to the law can conclude that the Foreign Corporation Act B.E. 2542 described as:

• Natural person with no Thai nationality under the Nationality Act B.E. 2508 
• Not a legal entity under Thai law.

There are any shares more than half the capital is held by foreigners and the number of partners or participants, shareholders, or members. Also included are unregistered limited liability company shares. For all general and limited partnerships. This definition applies to general partnerships as well as limited partnerships that have any foreign directors or partners.

While the private limited company offers foreigners a flexible structure with protected shareholders, company formation varies by location. In Thailand, registration moves swiftly when legal counsel facilitates the process. This entity permits non-Thai ownership of up to 49 percent, yet voting power could restrict to a foreign minority under a preferred stock constitution. Meanwhile, incorporation completes within three working days if the applicant supplies all data and a virtual or business address for the company entry.

There are different types of companies and other structures in Thailand:

Private limited company’s registration

In Thailand, the characteristics of a private limited company are diverse yet deliberately determined.

• A minimum of three promoters must establish the business entity to operate within the nation’s borders.
• Likewise, no fewer than three shareholders may incorporate under the designation.
• These equity-holding members could be either persons or other legally constituted organizations.
• Publicly advertising available shares is restricted.
• Moreover, proposing bond sales through published prospectuses is disallowed.
• The formally recorded Articles of Incorporation serve to delineate allowed company activities by defining the interrelations between investors, administration, and outside parties.
• A baseline registration charge of 5,500 Baht is assessed for both incorporating the company and ratifying the foundational legal text.
• Domestic ownership must comprise 51% of the equity or higher unless an exemption is granted by the Board of Investment or the Federal Bank to permit complete foreign possession.

Public limited company’s registration

While forming a public limited company shares some similarities with a private limited company establishment, there are also noteworthy distinctions. Whereas a private company restricts share availability, a public limited company openly offers shares on the market. Key aspects of establishing a public limited company entail:

• No fewer than 15 individuals are necessary to incorporate as founders.
• Shareholders must total at least 15 registered members upon formation.
• Provided shares are floated among public investors according to legal prospectus guidelines.
• Publicly floating bonds in adherence with prospectus regulations is also permitted.
• Incorporation registration charges (articles of association) range from 0.1% of registered capital up to a maximum of 25,000 Thai Baht.
• Fees for registration as a incorporated entity comprise 0.1% of registered capital, with the upper limit not exceeding 250,000 Baht.

 Registering a representative office in Thailand

A representative office is a very effective way to set up a company. Foreign companies can establish a representative office in Thailand to carry out limited non-profit activities.

Branch office’s registration

A branch office allows a company to operate legally in a foreign nation where its headquarters are located elsewhere. While establishing an affiliate branch permits firms incorporated abroad to conduct operations within Thailand’s marketplace, the parent company retains ultimate oversight of any activities conducted under its nameplate overseas. Conversely, the branch serves as an extension of the head office and acts upon its directives from afar. No explicit statutes govern how to inaugurate such auxiliary entities, affording the branch director autonomy to represent the parent firm as a proxy. However, registering a satellite location can grow quite intricate, necessitating approvals that may require prolonged waits given requisite adherence by subsidiaries to policies enumerated in the Foreign Business Act.

Setting up a regional offic

While multinational firms can set up regional hubs apart from their principal place of business, these satellite offices require minimal legal paperwork. To operate a regional division, a company must simply notify Thailand’s Department of Business Development of its formation. Financial reports are then submitted to the agency within five months of the fiscal year’s conclusion. Furthermore, all non-Thai personnel stationed at such locations must acquire employment authorization. Generating income is prohibited for regional workplaces. Additionally, foreigners receive tax documents forcing payment of levies on all remuneration received while residing in the country. Not only do supplementary branches enable closer contact with localized clients, their establishment involves relaxed registration demands compared to wholly foreign-owned subsidiaries.

There are several key steps to properly establish a company in Thailand under Thailand law. As such, when incorporating a new business entity, careful consideration of the following points is imperative to avoid complications both during and after formation:

First, reserving an acceptable company name with the Ministry of Commerce is essential. Once endorsement is granted, the reservation remains valid for 30 days wherein no other entity may utilize the name. The reservation is also renewable. Secondly, registration of the Memorandum of Association (MOA) necessitates a minimum of three promoters. The MOA registration charge is 500 baht and requires stipulation of the company name, location, sector, initial share structure with shares no less than 5 baht par value, and promoter particulars.

Next, potential shareholders must formally subscribe to and purchase the offered shares, with the lead promoter subscribing to at least one share. Upon complete share subscription, the promoter(s) must promptly convene the mandatory initial shareholders’ meeting. This assembly endorses promoter compensation and determines preferred share classes if applicable, adopts the standard company bylaws, and elects the inaugural board of directors and auditor.

Subsequently, the promoter(s) transfer control of the company to the newly elected directors who then require the shareholders deposit payment for their subscribed shares, with a minimum 25% of the share value in cash. Within three months of the shareholders’ meeting, the directors register the formal establishment of the company with the Ministry of Commerce while ensuring at least 25% of the registered capital is deposited in the business account. An expedited single day registration is possible if all necessary steps transpire in one appointment and all required individuals attend the initial meeting.

In Thailand, the following tax must be paid by a limited liability company: 

• Corporate income tax is at a rate of 20% of income, and the lower rate applies to small and medium-sized businesses.
• A tax of 10% on profits transferred outside Thailand.
• If the company’s annual income exceeds 1.8 million Baht, then the company must be registered in the VAT system.

While there are no strict minimum capital requirements, certain situations necessitate more capital on hand. For sole proprietorships with no foreign employees, three shares at 5 baht each is sufficient capitalization according to the letter of the law. However, those seeking to hire expatriate talent will find they must establish an operation far better funded. Employing foreigners obliges businesses to maintain a paid-in capital of 2 million Baht. On top of that, they must abide by labor code protections and allot no fewer than four Thai nationals for each non-national on staff. Separately, incorporation statutes outline a staggered schedule for raising capital over 3 years. A new company needs 25% of its total capital paid at incorporation, another 25% in the first year thereafter, an additional 25% in the second year, with the remaining quarter due by the third year of operation.

While Thai corporate entities traditionally utilize an official stamp for authentication, legal statutes do not mandate its employment. Directors routinely affix the seal to ratify contracts and agreements, imbuing negotiations with binding authority according to civil and commercial codes. However, neither framework requires possession of such a device. Some enterprises omit the seal entirely as permitted. As such, incorporation records must specify whether utilization will occur. Graphic depiction upon the seal faces constraints from Thai legislation as well, restricting visible elements to the sole name of the company. Imagery or insignia may supplement the mandatory labeling only when finalizing registration with the nation’s commerce authorities.

The second inventory includes corporate undertakings that outsiders are solely permitted to lead with the consent of the Minister: running radio and tv stations, genuine estate business, and distributing papers.

Cabinet approval is fundamental for the tasks that outsiders are permitted to contribute in. These incorporate producing weapons and ammunition, mining, and exchanging Thai old artifacts and works of art.

Additionally, remote organizations associated with auxiliary recording exercises should hold no less than 40% of their capital by Thai minority stakeholders. No less than two-fifths of the administrators must be Thai; in any case, the 40 percent prerequisite might be diminished to 25% with an preclusion from the office.

In the third list, outsiders are strictly banned from joining the organization unless endorsed by the secretary and concurred to by the Foreign Business Council (FBC).

This incorporates associations in the development, promoting, and the travel industry enterprises. All tasks not remembered for these three lists (lists 1, 2, and 3) are open to outsiders (this incorporates, for instance, exporting, exchanging, assembling, and offering related items). Be that as it may, exercises not remembered for the lists may require extra allows. For instance, a work grant is important for showing exercises.

The Foreign Affairs Committee (FBC) is a 19-part administrative body chosen by administrations and business affiliations. The FBC will endorse an application on the off chance that it decides that the sort of activity planned does not conflict with the Thai economy. The endorsement will be conceded free of charge and liable to the reservations and confinements featured in the activity endorsement declaration.

General venture criteria for exercises secured by the FBA. Foreigners who want to contribute in exercises secured by the FBA might do as such by:

• Acquiring an allow from the Thai administration.
• Contributing no less than 100 million Baht empowers the unfamiliar national to work as a retailer, wholesaler, or circulator.
• Under an arrangement between Thailand and the unfamiliar national’s local country.
• Bolstered by the Venture Promotion Act and the Board of Investment Promotion Act.

While corporate boards uniformly establish procedures according to prevailing legislation and articles of incorporation, variability exists in practice. The elected directors, including non-national executives, jointly steward strategic guidance and monitor operational oversight. Moreover, accountable to shareholders, the directors periodically select from among their ranks a presiding chair to lead discussions and preserve order.

Whether titled “Chairman” or otherwise, this appointed leader holds but a single ballot when votes convene, though supplementary influence may derive from stake in company ownership. Directors too sign correspondence and commitments as stipulated in founding documents, sometimes solo but often jointly as determined prudent. Though standardized frameworks apply, flexibility also permits optimization to changing conditions through established processes of democratic governance.

Under Thai civil and commercial law, there are three types of shareholder meetings:

Statutory General Meeting

To form a Thai company, shareholders must hold a mandatory shareholders’ meeting to elect the company’s directors. The shareholders’ meeting is a compulsory procedure for starting a company.

Ordinary General Meeting 

Thai companies must hold an annual general meeting of shareholders once a year. The agenda for this AGM includes:

• Modification or extension of the term of office of directors
• Shareholders’ opinion, consideration, and approval of the conduct of business.
• Acceptance of the company’s balance sheet and financial statements for the current fiscal year.
• Support of the distribution of dividends.
• Other necessary matters.

Extraordinary General Meeting

In addition to the Ordinary General Meeting of Shareholders, a Thai company may hold an Extraordinary General Meeting of Shareholders. The purpose of this general meeting is to change the company’s structure by Thai law.

1. When you want to form a limited company in Thailand, does it have to be registered by a Thai partner?

While a Thai partner is not strictly mandated for incorporation of a limited liability company, omitting local involvement brings regulatory limitations. Certain industries and professions requiring licensing may be barred without Thai participation controlling over half of shares. Alternately, procuring a foreign business license allows unfettered management but includes application hurdles. Much commercial activity can transpire under the banner of a joint venture where the Thai colleague maintains a slender majority.

2. What are the company obligations after registration?

Thai companies have relevant business and accounting obligations that must be carefully followed:

Any alterations to the company framework such as modifications to the company name, shareholdings, capital, or location needs rapid disclosure. Registered Thai corporations have monthly responsibilities such as bookkeeping, remittance of withholding taxes and value-added tax returns in addition to annual audits and reports. A nuanced comprehension of compliance duties is paramount for the thriving registration of an organization in Thailand.

3. What are the requirements to obtain a work permit in Thailand

To obtain a work permit for a limited liability company in Thailand, several stringent requirements must be satisfied. At a minimum, an investment of two million Baht is obligatory to establish the business legally. Additionally, the enterprise must retain no less than four Thai nationals on the payroll. This stipulation applies solely to a single work permit; supplementary applications mandate matching the original financial commitment and workforce proportions. As an example, two permits would necessitate four million Baht invested and eight local employees. There is one exception: If the applicant themselves has a Thai spouse, the required personal funds drop to one million Baht. Once a company has been registered, acquiring the necessary work authorization is an important subsequent phase for foreign involvement in Thailand’s economy.