Register a company in Thailand: essential insights for all investors

What types of company can be registered in Thailand?

Investors can select from several corporate entities in Thailand, each with unique advantages and lawful implications. The most common forms include the Thai Limited Company, Branch Office, Representative Office, and various partnerships. The optimal structure depends on the nature of business activities, desired ownership arrangement, and strategic goals of the investor.

• Thai Limited Company: The Thai Limited Company is the most popular structure for investors, providing restricted liability protection. This entity can be either majority Thai-owned or majority foreign-owned, with certain business activities necessitating a Foreign Business License.

• Branch Office: A branch office serving as an extension of a foreign corporation is permitted to generate earnings within Thailand. However, the parent company retains accountability for its activities.

• Representative Office: This entity is constrained to non-profit making undertakings, for example market exploration and liaison work, and cannot engage in commercial operations.

• Partnerships: Thai law acknowledges both regular and constrained unions, with differing consequences for liability and foreign participation.

Why is the Thai Limited Company the most renowned and the investors favored one?

The Thai Limited Company is the most widely opted for business structure owing to its adaptability and investor protection. It allows overseas investors to hold up to 49% of the shares, with the remaining 51% held by Thai nationals. However, under certain conditions, such as Board of Investment (BOI) promotion, it is possible to achieve majority or even 100% foreign ownership.

• Ownership Flexibility: The Thai Limited Company allows for structuring that meets both legal requirements and business objectives, including issuing preference shares to retain control.

• Ease of Operation: The legal framework for Thai Limited Companies is well-established, offering predictability and ease of compliance.

• Access to Incentives: Companies that receive BOI promotion benefit from tax exemptions, simplified visa processes, and the ability to own land, making it an appealing option for long-term investment.

There still are some conditions to register a Thai Limited Company in Thailand: 

• At least three shareholders are mandatory. 
• Each shareholder’s liability is confined to the amount of their respective shareholdings. 
• The directors hold the responsibility for overseeing and managing all aspects of the company’s operations.

How to register a company in Thailand in 2024?

Registering a company in Thailand offers both online and in-person options, though following legal details precisely remains paramount. The digital registration process permits completing steps remotely at government offices, submitting virtual documents and signatures instead of physical ones. An alternative, the in-person registration maintains largely consistent steps and necessities, save submitting documentation and endorsements physically rather than digitally.

Steps to register a company in Thailand:

• Company Name Reservation: Submit preferred company names to the DBD for approval, a process that usually takes 1-3 business days.

• Memorandum of Association (MOA): Draft and submit the MOA, detailing the company’s name, objectives, registered address, and information about the promoters.

• Statutory Meeting: Hold a meeting to approve the Articles of Association, elect directors, and appoint auditors, followed by submitting the minutes online.

• Company Registration: Complete the registration application through the DBD’s online portal, with a typical processing time of 3-5 business days.

• Tax and VAT Registration: Register for corporate income tax and VAT (if applicable) through the Revenue Department’s portal.

• Social Security Registration: Register employees with the Social Security Office within 30 days of hiring the first employee.

• Bank Account: Open a corporate bank account, usually requiring an in-person visit to the bank with the company’s registration documents.

The Role of BOI and FBL in facilitating business operations:

The BOI and FBL play pivotal roles in facilitating business operations in Thailand, especially for foreign investors. They provide avenues for non-nationals to engage in activities possibly otherwise restricted.

• BOI Promotion: The BOI proffers enticements like complete foreign possession, tax vacations, and import duty exemptions to companies in specified industries.

• Foreign Business License (FBL): For ventures not eligible for BOI backing, an FBL allows overseas majority-held corporations to function in limited sectors.

Conclusion

Registering a company in Thailand in 2024 presents substantial opportunities for both local and foreign investors. The Thai Limited Company remains the most flexible and popular option, furnishing the necessary protections and incentives for success in the Thai market. By comprehending the registration process and leveraging tools like the BOI and FBL, foreign investors can establish a strong foothold in Thailand.