Company registration in Thailand can be complicated and difficult to do right and needs to be tailored to your situation. If you already are sure that is what you want then contact us today to discusses the options, process, fees to get it registered. There are 5 basic methods of business formation in Thailand.
- Thai Limited Company. The most popular form of Thailand company registration is a private limited company where the liability of the investors is limited to their shareholding.
A Thailand limited company requires a minimum of three promoters or shareholders who then file a memorandum of association, convene a statutory meeting and register the company. The Thai company then needs to be registered for tax. The company may be required to register for VAT (Value Added Tax), depending on the types of business and the level of income. It must also follow accounting procedures specified in the Civil and Commercial Code, the Revenue Code and the Accounting Act. Companies are required to audit their accounts and supply profit and loss statements to the Revenue Department yearly.
- Sole Proprietorships. Not recommended as the sole owner is exposed to unlimited liability of the business.
- Partnerships. Again partnerships are not recommended for foreigners wanting to do business in Thailand because of liability issues. A partnership can be registered and unregistered with the government and therefore can have differing legal aspects.
- Company set up under the BOI promotion.
- These are normally on the basis of large investment of money (10 mill plus), large numbers of Thais employed, and/or exceptionally strategic technologies used.
- Benefits of a BOI company:
- Fast work permit processing at BOI One Stop Service Center in Bangkok
- The ability to own land even if the company is owned by a majority of foreign shareholders
- Tax incentives
- up to 10 year visas & work permits
- 100% foreign ownership
- Registration through the Treaty of Amity (only for US citizens) a special agreement between the USA and the Thai Kingdom that allows American companies or entrepreneurs to maintain a majority of shareholding or full ownership of a company in Thailand.
- Branch Office . You may choose to operate your existing foreign company in Thailand as a Branch Office. Or you can choose to set up a representative office, which is a form of Branch Office but as a representative office you cannot earn income in Thailand.
LIMITED LIABILITY COMPANIES
The liability of the shareholders is limited to the registered capitalization of the company. This provides high level security and protection for shareholders and investors.
Having a Thai owned majority in your company does not necessarily mean that you lose control of the company. There are a number of measures which you can put into place to ensure that you stay in control of your company.
By using a tiered company share structure (preferred shares), control of the company can be maintained by adjusting share voting rights and dividend allocations.
You are appointed as the sole Managing Director
Sole signatory authority — the bylaws / Articles of Incorporation state that all decisions must be signed by this Managing Director
You split the stock between “ordinary” and “preference” shares whereby your “ordinary” shares each have 2 times (or more) the voting power of the “preference” shares (preferred for dividend payments, not for voting)
Set a quorum of shareholders at 65% so that the bylaws cannot be changed nor can the Managing Director’s sole authority and powers be changed.
A Limited company may engage in all business types business with the relative business licenses. Company shareholders, directors, objectives, name, address are all flexible.
It is possible for foreigners to own 100% of the shares of a company in Thailand if their activates fall under certain relaxed or unrestricted criteria. See foreign ownership options.
COMPANY or CORPORATE BANK ACCOUNT
A registered Thai company is eligible to apply for a corporate savings account, checking account and/or foreign currency account. Online banking functionality is available.
WORK PERMITS & VISAS
According the registered capital and other labor department criteria, a company may apply for multiple work permits to accommodate foreigner executives and staff.
If you wish to apply for a work permit based on your Thai company you will need to have a minimum of 2 million THB in registered capital, 4 Thai employees and pay social security for your Thai employees every month.
Social Security deductions are 10% of the employees salary, 5% is paid by the employer and 5% is paid by the employees.
Once you have setup a company you need to submit a balance sheet to the tax office every year even if the company hasn’t traded.
You must maintain a company address.
If you have an annual turnover of more than 1,800,000 THB then you must register for VAT within 30 days of reaching that amount of turnover.
Registering a Thai limited company can be complicated. However, we can take the stress out and make it easy for you so you can spend your valuable time and effort concentrating on the operation of the business.