How to set up and operate an Investment Company in Thailand ?

What is legally considered an investment company in Thailand? 

An investment company in Thailand is generally understood as a juristic person established to manage financial assets, equity holdings, or commercial interests on behalf of its shareholders or clients. It may act as a holding company, a private equity vehicle, a venture capital firm, or a real estate investment entity.

However, the specific term “investment company” is not strictly defined under Thai legislation. Instead, its legal structure typically complies with a privately-held limited company, overseen by the Civil and Commercial Code. This type of company can be applied to invest in diverse forms of enterprises or properties. In some scenarios, the organization may evolve into a publicly-traded limited company, particularly if aiming to raise capital from the public marketplace or list on the Stock Exchange of Thailand.

To legally engage in investment activities, the company needs to state such goals in its founding registration documents and articles of governance. Contingent on the nature of investment operations, the company could also require approval from regulatory bodies for financial matters like the Securities and Exchange Commission.

Therefore, while a foreign-controlled investment company situated in Thailand can serve as a powerful instrument for accumulating wealth and broadening business ventures, it must perform strictly inside the parameters permitted under Thai legislation.

How can a foreigner own an investment company in Thailand? 

Foreign ownership presents one of the most critical factors to analyze when constituting an investment company in Thailand. As indicated in Section 4 of the Foreign Business Act, a foreigner incorporates any juristic person registered in Thailand where outsiders hold 50% or more of the shares or manage the bulk of voting legal rights.

Under the FBA, distinct commercial exercises are limited to Thai nationals unless a Foreign Business Permit (FBL) is obtained. Regrettably, “investment” is not explicitly specified among the restricted occupations, yet the essence of the investment must be inspected thoroughly. For instance, if the investment company acts as a holding company that derives income from dividends or capital increases, this may not fall under a restricted group. However, if the company offers monetary consultatory services or oversees client finances, those exercises might be restricted or governed individually under the Securities and Exchange Act B.E. 2535 (1992).

Therefore, foreign investors seeking full ownership of an investment company in Thailand must evaluate whether their proposed action falls within limited sectors. If it does, they may either apply for a Foreign Business Permit or consider structuring the company to comply with the 49% foreign ownership rule, unless exempted under BOI advancement or through a treaty, for example the U.S.-Thailand Treaty of Amity.

What are the steps to establish an investment company in Thailand? 

The creation of an investment firm in Thailand follows the standard process of business registration with the Department of Business Development under the Ministry of Commerce. The basic steps are as follows:

Firstly, the promoters must reserve the company name. This typically takes one to three working days. The name cannot resemble existing registered entities and should comply with DBD guidelines. Lengthier names capturing key aspects are also considered.

Secondly, the company must prepare and submit its Memorandum of Association, which outlines critical information for example company name, registered capital, objectives, and shareholder details. In the case of an investment company in Thailand, the objectives should unambiguously indicate the entity will invest in other businesses or assets using a variety of sentence structures.

Thirdly, a statutory meeting must be held to approve the articles of association and appoint directors and an auditor using varied terminology. Then, the company registration application must be submitted to the DBD, alongside all required documents.

Finally, after incorporation, the company must register for a taxpayer identification number with the Revenue Department and, if applicable, register for VAT within 30 days of reaching the income threshold or starting business operations, whichever comes first.

It is also advisable that any investment company in Thailand immediately open a corporate bank account after registration and ensure compliance with anti-money laundering regulations, particularly if it manages third party funds, to diversify risk.

What licenses or approvals are required for investment activities? 

Not all investment companies in Thailand require a license. If the company merely invests its own funds, holds shares, or owns property without managing third-party assets or offering financial services, it may operate without specific regulatory approval.

However, once the company engages in regulated investment activities—such as fund management, securities brokerage, or investment advisory services—it must be licensed by the Securities and Exchange Commission (SEC) under the Securities and Exchange Act.

For example, a company that manages funds on behalf of third parties needs to apply for a Fund Management License, and it must comply with stringent capital adequacy, internal control, and reporting requirements. Similarly, investment advisory services require a license and must adhere to SEC standards regarding qualifications and fiduciary duties.

Even without engaging in regulated investment activity, a foreign-owned investment company in Thailand may need to obtain a Foreign Business License, depending on its structure and revenue source.

What are the tax obligations? 

Every investment company in Thailand is subject to the Revenue Code and must fulfill its tax obligations based on the type and volume of income earned.

Corporate income tax (CIT) applies at the standard rate of 20% on net profits. If the company qualifies as a small and medium enterprise (SME), lower tax rates may apply to the first tranches of income. However, investment companies with large portfolios typically exceed the SME threshold.

Additionally, an investment company must withhold tax on dividends received and may also pay withholding tax on dividends it distributes to its shareholders. The applicable rate varies depending on the tax residency of the shareholder and the existence of a Double Taxation Agreement (DTA) between Thailand and the shareholder’s country of residence.

If the investment company engages in the sale of securities or property, capital gains tax will apply. In Thailand, capital gains are treated as ordinary income for corporate entities, and thus subject to CIT.

Moreover, investment companies must also comply with transfer pricing regulations if they transact with related parties, as per the Revenue Department Notification on Transfer Pricing B.E. 2562 (2019).