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French companies in Thailand and institutions: a decisive relationship for success?
Setting up a French company in Thailand is never an improvised process. Local institutions play a central role in this dynamic. Far from being mere administrative intermediaries, they are the guarantors of the legal, fiscal, and economic framework in which French companies can develop. A French company in Thailand must understand these mechanisms in order to access the many advantages offered, notably by the Board of Investment (BOI), the Department of Business Development (DBD), and the tax authorities.
This legal context is based in particular on the provisions of the Thai Civil and Commercial Code, Article 1096 of which stipulates that a limited liability company comes into existence upon registration with the Registrar. Article 5 of the Foreign Business Act B.E. 2542 (1999) defines the activities that are prohibited or restricted for foreign investors. Finally, the Investment Promotion Act B.E. 2520 of 1977, particularly Articles 16 to 31, provides a framework for tax incentives and the rights of companies promoted by the BOI. The bilateral tax treaty between France and Thailand, concluded on December 27, 1974, prevents double taxation and enhances legal certainty for companies.
This article analyzes how a French company in Thailand can use the legal framework and institutional support to establish itself on a long-term basis and benefit from preferential treatment.
Table of Contents
Registering a French company with the relevant authorities
The role of the Department of Business Development
Any French company operating in Thailand must first register with the Department of Business Development (DBD). This step includes reserving the name, filing the Memorandum of Association, drawing up the articles of association, and final registration. The DBD verifies the shareholding structure, share capital, corporate purpose, and compliance conditions. This procedure is governed by Articles 1096 to 1111 of the Thai Civil and Commercial Code.
Cases requiring a Foreign Business License
If more than 49% of the company is owned by foreign interests, it is considered a “foreign company” within the meaning of Article 4 of the Foreign Business Act B.E. 2542. In this case, it must apply for a Foreign Business License (FBL), unless it is promoted by the BOI. A French company in Thailand, an institution subject to the FBA, must therefore justify the activity it wishes to carry out and meet the eligibility conditions set by the authorities, in particular the criteria mentioned in Articles 8 and 9 of the law.
BOI support for the development of French companies in Thailand
The Board of Investment is a key institution for any French company in Thailand wishing to develop in promoted sectors. The BOI offers tax incentives, including a corporate tax exemption for 3 to 13 years (Article 31 of the Investment Promotion Act), exemption from customs duties on machinery (Article 28), and foreign ownership without capital restrictions (Article 27).
In addition to tax breaks, the BOI facilitates the obtaining of visas and work permits for foreigners (Article 24), allows full ownership of the company, and exempts the company from obtaining an FBL (Article 37). A French company in Thailand can thus operate legally in sectors that are normally prohibited.
French companies in Thailand: Tax obligations and bilateral agreement
Declaration and local taxation
A French company in Thailand is subject to corporate income tax at a rate of 20% under Article 65 of the Thai Revenue Code. It must register with the Revenue Department within 60 days of commencing commercial activity (Article 3) and keep accounts in Thai in accordance with Article 69. Financial statements must be certified by a certified accountant and filed annually with the DBD.
The company is also required to file monthly VAT returns, in accordance with Articles 77/1 to 91 of the Thai Revenue Code, and to pay withholding taxes in accordance with Article 50. Contributions to the social security fund, as mandated by the Social Security Act B.E. 2533, are mandatory once a company employs staff. Failure to comply with these rules exposes the company to penalties and late payment interest. The French company in Thailand is liable to tax penalties, late payment interest, and even criminal penalties in the event of fraud or wilful omission. (20%) in accordance with the Thai Revenue Code. It must register with the Revenue Department within 60 days of starting its activity (Article 3 of the Code). It must also produce annual accounts and complete monthly VAT returns (Articles 77/1 et seq.), withholding tax returns, and social security contributions.
Protection offered by the Franco-Thai tax treaty
The Franco-Thai tax treaty, signed in 1974 and entered into force in 1975, provides for several mechanisms to avoid double taxation. Article 23 allows French companies to benefit from a tax credit in France equivalent to the tax paid in Thailand. Article 24 prohibits any tax discrimination against French companies established in Thailand.
Article 25 also provides for an amicable procedure to resolve disputes relating to the interpretation of the agreement. A French company in Thailand that is registered for tax purposes must therefore accurately document the income concerned and keep withholding certificates to justify its tax credit entitlements. A French company in Thailand must retain Thai withholding certificates (PND 54, PND 1, etc.) to claim its tax credit rights. A preliminary analysis of the classification of income and the right to exemption, in accordance with Articles 7 (industrial and commercial profits) and 10 to 12 (passive income), is strongly recommended. The agreement, in particular Articles 23 (tax credit) and 24 (non-discrimination), provides for mechanisms to eliminate double taxation. A French company in Thailand – a registered institution – can thus obtain a tax credit or exemption on locally taxed income.
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Franco-Thai institutions supporting French companies in Thailand
Support from the French Embassy and Business France
The French Embassy in Thailand, through its Economic Department and Business France, actively supports all French companies in Thailand with market analysis, prospecting, and assistance with setting up operations. These services promote better integration into the local economic fabric.
The strategic role of the FTCC
The French-Thai Chamber of Commerce (FTCC) acts as a local relay for French companies. It facilitates access to professional networks, organizes economic events, and offers tailored legal services. A French company in Thailand has access to a dynamic and responsive business community.
The complementary role of the Bangkok Chamber of Commerce and Industry
In addition to the FTCC, some French companies in Thailand choose to join the Bangkok Chamber of Commerce and Industry (BCCT), which brings together a large network of international economic players. Although historically Anglo-Saxon, the BCCT offers inter-chamber events and useful resources for French companies wishing to expand their network and access up-to-date economic information.
Other institutions and local representatives
Other structures can also play a key role in supporting French companies in Thailand, such as established institutions. The embassy’s regional customs attaché service, for example, can provide detailed information on customs duties and applicable import and export regulations. The Agency for French Education Abroad (AEFE) also facilitates the integration of expatriate executives’ families by guaranteeing access to French-language schooling.
Local representatives, such as the French Foreign Trade Advisors (CCEF) or sector-specific business clubs, offer valuable support on specific issues, from land access to connecting with Thai suppliers. A will thus benefit from an environment conducive to its development, within a structured institutional network.
Ensuring the ongoing compliance of your French company in Thailand
After the set-up phase, a French company in Thailand must maintain its legal and tax compliance over time. Compliance with annual accounting obligations is governed by Articles 1135 to 1206 of the Thai Civil and Commercial Code, which require the keeping of accounting records, the preparation of balance sheets, and the conduct of statutory audits. Similarly, Article 3 Section 7 of the Thai Revenue Code requires the renewal of tax registrations and the submission of monthly returns (VAT, WHT, etc.).
The articles of association must also be updated in the event of a change in shareholding or registered office, in accordance with Article 1152 of the Civil and Commercial Code. Any major changes must be notified to the competent authorities and, in some cases, require new authorization under the Foreign Business Act.
Anticipating inspections by immigration authorities, tax authorities, or the BOI requires rigorous internal management, particularly regarding contracts, corporate records, fund movements, and data protection obligations. A French company in Thailand will benefit from implementing appropriate legal governance, with the support of a competent law firm.
Why choose Benoit & Partners to support your French company in Thailand
Benoit & Partners is a Franco-Thai law firm recognized for its in-depth expertise in supporting French companies seeking to establish or expand their businesses in Thailand.
The firm is involved in all stages of the project: legal feasibility studies, investment structuring, obtaining the necessary licenses, support before the BOI, tax optimization, compliance with the Foreign Business Act, drafting partnership agreements, and assistance in labor, tax, and commercial litigation.
Thanks to its in-depth knowledge of local administrative practices and the actual processing times of institutions (DBD, Revenue Department, Land Office, Immigration Bureau), Benoit & Partners ensures its clients’ procedures are efficient and anticipates legal risks.
The firm’s teams are also accustomed to working on sensitive cases involving international structuring, cross-border taxation, real estate law, and commercial litigation. This multidisciplinary approach enables a French company in Thailand to benefit from comprehensive, strategic support.
Conclusion
The success of a French company in Thailand depends on a thorough understanding of the legal framework and active collaboration with local institutions. From the incorporation of the company to the development of its activities, each step requires a compliant, strategic, and supported approach. Using the BOI provides access to considerable tax advantages, including a 13-year tax exemption in certain cases (Section 31 of the Investment Promotion Act). The FTCC, the Embassy, the DBD, the BOI, and the tax authorities form a coherent ecosystem dedicated to economic development. By working with a competent Franco-Thai law firm, a French company in Thailand benefits from lasting legal security and a solid foothold in the ASEAN region.