Added: Nyisha Doan - Date: 09.02.2022 08:51 - Views: 39889 - Clicks: 9178
Starting a business in Thailand can be a daunting prospect, but get it right and it can be a lucrative, enjoyable one. There's an abundance of opportunity in the industrial and service sectors and in import and export in general. But before you even consider this journey, you need to arm yourself with the basics of Thai business law and regulation.
There's a ton of incorrect information out there online, and indeed to be heard next to a mumbling expat at 2am on a barstool in a back alley of Bangkok. So here it is. Everything you need to know in one handy post, broken down in to 12 helpful sections. It is extremely important to know the penalties should you not adhere to the restrictions imposed. This includes Thai registered companies where half or more of the capital is held by non Thai individuals, foreign registered companies or Thai registered companies which are themselves majority foreign-owned.
There is no general prohibition against foreigners carrying out business in Thailand. However, foreigners cannot engage in the following:. You can read the full act here. Structure is what separates regional offices and their branch counterparts. The regional office will conduct its business in Thailand on behalf of its head office based outside of the Thai kingdom. Also worth noting, a foreign company must have at least one active branch office or affiliate in Asia. Regional offices are also restricted from earning income, purchasing, selling, and negotiating while based on Thai soil.
They are allowed to earn income. The Branch Office's liabilities arising from the action of the business in Thailand will not be limited within Thailand but extends to the head office overseas. A private limited company is formed through a process which le to the registration of a Memorandum of Association Articles of Incorporation and Articles of Association By-laws , as its constitutive documents. A minimum of 15 promoters is required for the formation and registration of the memorandum of association of a public limited company, and the promoters must hold their shares for a minimum of two years before they can be transferred.
The Board of Directors of a public limited company must have a minimum of five members; at least half of them Thai nationals. The registration fee for a public limited company. So, in short; avoid setting up a company in the name of your partner or someone you've only met a handful of times in a bid to quickly get started — this may come back to bite you. However, foreigners are allowed to control the company as a minority shareholder and are allowed to be appointed as the managing director of the company.
Simply put, a Thai majority company, as opposed to a registered foreign company, requires less capital and paperwork to setup and maintain. Another benefit from having Thai partners is that a Thai majority company is able to purchase land, should the need arise. Buying property while in a Thai partnership, as a foreign investor, is a fairly common practice in Thailand. Should you choose this route, maintaining regular compliance of the company would be paramount. Thai law requires balance sheets to be filed yearly and a company address must be maintained.
Also bear in mind that if a company is not earning an income, it faces being de-listed by the authorities. Under certain circumstances, the use of preferential voting rights and the requirement of a super majority of shares to votes may alter voting rights in favour of minority shareholders.
Even so, since the income of a limited company is normally disbursed through expenses, such as salaries and rent, there is no equity for them to claim in the rare event that a coup was to take place. As it currently stands, the minimum capital requirement for a Thai majority shareholder company limited is 2 million Baht, with a government set up fee of roughly 7, Baht. On the other hand, if the business is required to obtain a Foreign Business under FBA, the minimum capital requirement must be THB 3 million for each business activity.
Prior to , it was not possible for a foreign national to buy property or assets in Thailand. These laws have now thankfully been relaxed. A popular method is to be in partnership with a Thai national, in a Thai majority limited company. An agreement would then be put in place that would result in the Thai entity handing over complete power of attorney to the foreign partner, which would then provide them with the power to purchase assets.
The owners of the t venture would then be required to complete a tax return and pay administrative fees and tax each year. However, as mentioned earlier in this document, using nominee shareholders and creating t ventures for the sole purpose of owning property is illegal and highly punishable under Thai law. Acquiring a year lease on a property which is extendable to 60 years once obtained is another route you can go down. You don't need a business to do this though. For example, your partner could lease you land for 30 years to build a house on.
But it is false; though some of the methods are time-consuming and the outcomes may be un-predictable. Just as foreigners in Thailand can only engage in certain occupations and are required to have a Work Permit to be able to work, foreign companies can also operate merely in the selected and need an FBL. This way, the Thai government can control the influx of foreign businesses into the country and thus protect Thai nationals and their interests.
The Thailand Board of Investment BOI is a division of Thai government that promotes business start-ups and projects in areas that are deemed desirable for the economic outlook of Thailand. All you need to know about the BOI can be found here. Thai-US Treaty of Amity and Economic Relations is 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.
You can read about the full requirements here. This makes you legally eligible to conduct business activities in Thailand, and that includes prospecting to set up a company. You can apply for this particular visa at a Royal Thai Embassy or consulate in your home country. The visa fee is 2, Baht for single-entry with three-month validity and 5,B for multiple entries with one-year validity. Eligibility boils down to registered capital, as mentioned above.
Two million Baht will enable you to employ a foreign national, and a further 2 million Baht per person is required up to a maximum of 10 people. If your company is small, then the bank may not give you a checking when you first open your company . You may get only a savings , whereby you can only withdraw cash. Note that you won't get an ATM card with a company . You must go, or send someone, to the bank with a withdrawal slip, with the authorized ature e. The bank will write up individual bank cheques upon request. Bear in mind that loans from local banks are not easily obtained.
Getting a loan from your bank overseas may be easier, even though you will be transferring the money to Thailand. If you want a personal with an ATM card, check out this post for the full lowdown. Corporate Income Tax CIT is a direct tax levied on a juristic company or partnership carrying on business in Thailand, or not carrying on business in Thailand but deriving certain types of income from Thailand. Get the full rundown on corporate tax rules here. For personal income tax information, go here. I hope this post has helped you understand what setting up a Thai company entails.
But let me just finish by making something very clear:. Succeeding in business in Thailand is no walk in the park. Sure, business costs are lower, but with that comes red tape — in business, banking and legalities. And then there's the cultural boundaries of dealing with suppliers and employees. That said, there are thousands of foreign companies thriving in Thailand. And they all have one thing in common: They do things above board. They take time to learn the language, the culture, and pay that bit extra for the best legal advice.
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The Company Registration Guide in Thailand for Foreigners