Foreigners who are taking into consideration establishing their business presence in the Thai market can choose to incorporate the company under several legal entities available for foreign nationals.
It is advisable to receive the assistance of the local specialists for this procedure, as the local legislation provides several stipulations related to the business activities which can be carried out by foreign businessmen. Our team of company registration specialists in Thailand can provide details on all of the relevant steps of the registration process.
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Legal entities available in Thailand
Investors who are interested in setting up a company in Thailand are allowed to establish the business under the following business forms:
- limited company- established by at least three shareholders in the case of the private company and at least 15 for the public limited company;
- partnership – managed by a minimum of two persons;
- joint venture – formed by a group of natural persons and/or legal entities;
- sole trader – a one-man business that has the highest level of liability; it is a business form without legal capacity.
| Quick Facts | |
|---|---|
| Main business forms in Thailand | Limited company; Branch; Representative Office; Partnerships; Sole trader. |
| Restrictions for foreign investors for any of the available forms | No |
| Most commonly used business form | The limited liability company |
| Limited company – main traits | Private or public. It is separate from its founder, has legal identity, it is subject to corporate laws and corporate taxation. |
| Partnership – main traits | Ordinary and limited partnerships are available for registration. The founders share the profits. |
| Sole trader – main traits | Incorporated by a single individual, subject to full liability. |
| Branch – main traits | It is an extension of a foreign parent company; it engages in the same business activities, it is not a separate business form. |
| Representative office – main traits | Only used for non-trading activities (marketing, promotion, networking, etc.) |
| Founder liability | According to business form |
| Minimum share capital | Mandatory only in some cases |
| Bank account | For all business forms |
| Residency requirements | Most business forms are incorporated with a Thai citizen or Thai resident partner. Our team can give you details. |
| Mandatory presence in Thailand | The company founder(s) need to perform some of the steps in person. Our team can give you details about the possibility to use a power of attorney. |
| Assistance for choosing the business form | Upon request |
| Assistance for those who have additional questions after choosing the business form | Yes |
For the purpose of company creation, the public and the private companies are the business forms that will be incorporated in Thailand by local or foreign investors. The corporations have legal capacity and are considered legal entities (they have a separate identity from that of their founder(s));
The private company is regulated by the stipulations of the Civil and Commercial Code, while the second one falls under the rules of the Public Company Act. Shareholders registering a limited company have the benefit of having limited liability for the business’s debts, but it is important to know that the directors may have unlimited liability if the statutory documents prescribe such a provision.
The local legislation stipulates several limitations imposed on foreign investors; for example, foreigners setting up a business are generally not allowed to fully own a company here, as they can have only 49% of the shares of the company; our Thai company formation agents can provide more details on this law.
Additionally, some foreign companies will need to obtain special approvals, along with a Foreign Business License, or the Foreign Business Certificate. The license/certificate must be obtained before the start of the business activities, in order for the company to be legally compliant.
In addition to the aforementioned forms of corporate presence, foreign investors in Thailand can also open a branch of a foreign company. This is not a separate business form, but an extension of a foreign-registered legal entity that is permitted to do business in Thailand, subject to receiving a foreign business license.
The two types of companies in Thailand, the private and the public limited companies, share similar characteristics and some of the same steps for incorporation. Below, our Thai company formation agents list the key registration steps.
Company registration in Thailand
After the investor has decided upon the legal entity under which he or she will carry out the business activities, the registration process can begin.
Our Thailand company formation agents list the essential steps below:
- Company name: it is important to know that the Thai incorporation process starts by proposing a company name at the Department of Business Development, operating under the Ministry of Commerce;
- Company office: a locally registered company will have a Thai address; if investors choose to, they can set up the company using a virtual office in Thailand;
- Bank account: the entrepreneur will have to establish a corporate bank account and receive a company seal. Further on, the business will have to receive approval on the statutory documents from the Partnerships and Companies Registration Office.
- Business license registration: the company is registered with the Department of Business Development and it obtains the business license for functioning;
- Other registrations: the business will also have to be registered with the relevant social contributions and tax authorities, including for the payment of the Value Added Tax (VAT).
For both the public and the limited company the founders will need to prepare the Memorandum of Association (the company’s constitutive document). For the private limited company, the registration of the business can generally take place the same day the Memorandum is registered (subject to conditions).
Investors who open a company in Thailand in the form of a public limited company will first need to register the Memorandum with the Thai Ministry of Commerce, followed by the public subscription of company shares. Once this is done, the shareholders (promoters) will convene a statutory meeting no later than six months from the registration date of the Memorandum. Only after this meeting and after the receipt of the share payment up to the number of subscribed shares (but no later than three months after the meeting) can the public company be registered with the authorities.
Trademark registration in Thailand can be a good option for limited liability companies.
We invite you to watch a comprehensive video about the available types of companies in Thailand you can choose from:
Post-registration ongoing compliance for Thai companies
Once they are registered, public and private companies need to follow a set of mandatory reporting requirements, as well as the Thai accounting principles.
Companies shall keep proper books of accounts, along with statutory records, and will use an accounting period of 12 months. All companies prepare annual financial statements and in most cases, these are audited by an independent auditor (with the exception of the partnership, in some cases).
Our accountants in Thailand can provide complete details about the tax payment and filing requirements, as well as the annual submission for companies.
In addition to observing the steps for company registration in Thailand, shareholders will also need to keep in mind that several registration fees are in place:
- the registration fee for the private limited company is 500 Baht per 100,000 Baht of registered capital;
- for the public limited company, the registration fee is 1,000 Baht per 1,000,000 Baht of registered capital;
- for the private company, at least 25% of the total shares need to be paid up by the shareholders at the time of the registration;
- special rules apply for foreign companies in terms of share capital, however, the minimum registered capital for a company that does not engage in activities stipulated in the Foreign Business Act is 2 million Baht.
If you need further information on the legal entities available in Thailand, please contact our team of Thai company formation representatives for consultations. In case you are interested in company formation services in other countries, we have a wide network of affiliates who can help you open an offshore company in Belize or incorporate a company in Slovakia.