Company registrations in Thailand
Registering a company in Thailand offers several benefits compared to other countries in southeast asia. Baan Thai is your end-to-end business solution – from registering your firm to facilitating expat work permits to achieving and maintaining compliance.
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Thailand has a long history of attracting foreign investment and business ownership, and offers an excellent base of operations. This includes sophisticated infrastructure, a well educated workforce, lower expenses, tax incentives, world class healthcare and an attractive lifestyle for expat business owners and employees. But starting a business or creating a new regional base of operations can be challenging — let alone if you’re doing it in a foreign jurisdiction with a distinct and storied culture and language.
Starting a business in Thailand may seem daunting due to the myriad choices and legal requirements. There is lots of outdated information, and the government agencies in Thailand are imbued with a great deal of discretion. As a strategic business owner or executive you want to make informed decisions and lay the right foundation so the focus is on growing the business and not on structure or compliance.
To successfully register your company in Thailand and start operating smoothly, it pays dividends to have a seasoned expert by your side. With comprehensive knowledge of Thai law, daily interaction with government decision makers and decades of legal experience, Baan Thai immigration solutions is known for developing effective long-term strategies for clients wishing to establish a business in Thailand.
We understand how complex the process can seem. Our strategic-minded team of bilingual legal professionals provides hands-on assistance every step of the way. We take the uncertainty out of starting a business in Thailand and build confidence in your decision making by understanding your aspirations and providing the legal and practical options that best suit your goals. As creative problem solvers and vigorous advocates, we give you a front row seat in understanding how your business plan will be received, and then handle the processes to ensure your business is approved and compliant. Let us help you take advantage of the opportunities in the Thai market.
When starting a company in Thailand, you must first determine which business structure best fits your needs. Various factors will feed into your decision, including your partners, shareholders, nationality, available capital, industry, timeline and intended business activities.
The main business structures available are limited company, representative office, branch office, BOI certified company, BOI certified regional operating headquarters, and US Amity Treaty company. Here’s a breakdown of each of these, including their pros and cons.
A limited company is a separate legal entity with its own assets, liabilities and profits. Private limited companies in Thailand must be owned by at least three shareholders and managed by at least one director. The liability of the shareholders is limited to their capital contribution. A registered capital of at least 1 million baht is needed to set up a limited company — or 2 million for companies that require a non-B visa and work permit for a foreign employee. This is one of the most common routes to setting up a new business in Thailand.
Pros and cons of a limited company
A limited company is a separate legal entity from its members and directors, meaning your personal finances are safe and separate if anyone takes legal action against your business. Your financial liability is also limited to the value of your investment in the company.
This is a preferred route for many new business owners in Thailand as it is easy to establish, the capital requirement is low, and only one director is needed to operate the company. In certain industries, limited companies can be 100% foreign owned, and multiple work permits and visas can be granted if capital and labor department criteria are met.
On the downside, majority foreign-owned limited companies face various restrictions and must jump through extra hoops, including obtaining a Foreign Business License and raising an extra 1 million baht in capital.
A representative office is an entity set up by foreign companies to establish their presence in Thailand, promote their products or services, and gather information about the Thai market. It does not engage in commercial activities and is not allowed to generate profits.
Pros and cons of a representative office
On the plus side, representative offices do not have to apply for a Foreign Business License. They are low cost and low risk, as they do not engage in commercial activities. However, this is also the downside: representative offices are limited as they cannot generate profits or enter into contracts, and are dependent on their parent company.
Pros and cons of a branch office
BOI company (Board of Investment)
Pros and cons of a board of investment company
BOI companies receive tax incentives, easier visa and work permit procedures, and support in setting up their operations in Thailand. They can also be 100% foreign owned. However, this route is limited to certain industries, subject to higher scrutiny by the government, and faces restrictions on the transfer of ownership.
US Amity Treaty company
A Treaty of Amity company is a joint venture between a Thai and US company established under the Treaty of Amity and Economic Relations between Thailand and the United States. This type of venture operates as a limited company.
Pros and cons of an Amity Treaty company
The steps to register a company in Thailand
Step 1: Review and choose a business structure that best suits your needs and goals
As outlined above, in Thailand, the main business structures available are limited company, representative office, branch office, BOI company, and US Amity Treaty company. Choose the one that best suits your needs and goals based on factors such as liability, ownership and industry.
Step 2: Register the company name at the Department of Business Development
Step 3: File the memorandum of association
Next, you must prepare and file the memorandum of association, which outlines the company’s purpose, capital structure and ownership.
Step 4: The statutory meeting
You must then hold a statutory meeting with the shareholders to approve the memorandum of association and appoint the directors.
Step 5: Register the company at the Ministry of Commerce
Following the statutory meeting, you must register the company at the Department of Business Development, Ministry of Commerce. This includes submitting the required documents, including the memorandum of association and statutory meeting minutes.
Step 6: Register for VAT and corporate income tax at the Revenue Department
Step 7: Open a company bank account
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Why incorporate in Thailand?
Thailand is the hub of ASEAN
Thailand is strategically located at the center of the Southeast Asia region, making it an ideal hub for businesses looking to expand in the ASEAN market. Its close proximity to key markets such as China, India and Australia also makes it a gateway for businesses looking to tap into the wider Asia-Pacific market.
Favorable Foreign Direct Investment policies through the BOI
Thailand’s Board of Investment (BOI) offers a range of investment incentives for foreign companies, including foreign ownership, expat staffing, tax reductions or exemptions, duty-free import privileges, and streamlined visa and work permit processes. These policies make it substantially easier for foreign companies to invest and operate in Thailand, and create a supportive business environment for businesses looking to establish a presence in the country.
Favorable corporate tax rate
Thailand has a corporate tax rate of 20%, which is lower than many other countries in the region. This low tax rate makes it an attractive destination for foreign investors looking to minimize their tax liabilities and maximize their returns. BOI businesses carrying out promoted activities under the Investment Promotion Act or establishing a Regional Operating Headquarters also enjoy promotional tax rates.
Growing infrastructure investments and economic growth plans
Is it possible to establish and run a 100% foreign-owned company in Thailand?
Yes, it is possible to establish and run a 100% foreign-owned company in Thailand, although there are restrictions for certain industries, such as retail and services.
How do I protect my intellectual property in Thailand?
You can protect your intellectual property in Thailand by registering trademarks, patents and copyrights with the Department of Intellectual Property. You can also take legal action to enforce your rights if necessary.
How can I stay compliant with labor laws in Thailand as a foreign business owner?
To stay compliant with labor laws in Thailand, you must adhere to minimum wage requirements, provide health and safety standards, and follow rules related to working hours, overtime and leave entitlements. You can seek the assistance of a local law firm or HR consultant to ensure compliance with labor laws.
How do I keep records and file taxes in Thailand?
To keep records and file taxes in Thailand, you must maintain accurate financial records, prepare and file tax returns, and pay taxes on time. You can seek the assistance of a local accounting firm to ensure that your tax obligations are met.
Which business structure is most commonly chosen by foreigners when setting up a business in Thailand?
The most commonly chosen business structure for foreigners in Thailand is a limited company, due to the limited liability it provides and the flexibility it offers for ownership and management structure.
What is the process of closing a company and how easy is it?
The process of closing a company in Thailand involves dissolving the company, settling its debts and distributing its assets. The ease of the process depends on various factors, such as the size of the company and the complexity of its financial situation.
Is there any specific industry or sector that is more challenging to register a company in Thailand?
Yes, certain industries, such as retail, services, farming and media, have more restrictions for foreign ownership and investment. These industries may require a local partner or a certain percentage of local ownership, making it more challenging to register a company in these sectors.
We are ready to answer your questions about registering a company in Thailand.
Our dedicated and experienced team is ready to help you as we have so many others. Contact us today for your free consultation.