Company Registration in Thailand involves navigating legal, regulatory, and procedural requirements overseen by the Department of Business Development (DBD) under the Ministry of Commerce. Foreign investors must adhere to specific rules, including restrictions under the Foreign Business Act (FBA), while leveraging incentives for promoted industries. Here’s a detailed breakdown of the company registration process.
1. Types of Business Structures
1.1 Limited Company (Most Common)
- Private Limited Company:
- Requires at least 3 shareholders and a minimum registered capital of 1 million THB for most activities.
- Shareholders may be Thai nationals, foreigners, or a combination.
- Public Limited Company:
- Requires at least 15 promoters and a capital of 5 million THB to list on the Stock Exchange of Thailand (SET).
1.2 Partnership
- Ordinary Partnership: Partners share unlimited liability.
- Registered Ordinary Partnership: Becomes a legal entity upon registration.
- Limited Partnership: General partners bear unlimited liability, while limited partners are liable only for their contributions.
1.3 Branch Office
- For foreign companies operating in Thailand.
- Limited to activities permitted under the FBA.
1.4 Representative Office
- Cannot generate revenue and is limited to non-commercial activities, such as market research.
2. Key Steps in Company Registration
Step 1: Reserve a Company Name
- Submit a name reservation application to the DBD.
- The name must comply with DBD guidelines, avoiding duplication or restricted terms.
Step 2: Draft the Memorandum of Association (MOA)
- The MOA must include:
- Company name.
- Registered capital and number of shares.
- Objectives aligned with the FBA and relevant laws.
- Office location and promoter details.
Step 3: Hold a Statutory Meeting
- Approve the articles of association, appoint directors, and confirm the capital structure.
Step 4: Register the Company
- File incorporation documents, including the MOA and articles of association, with the DBD.
- Payment of registration fees is required (approximately 5,500 THB per 1 million THB of registered capital).
Step 5: Tax and VAT Registration
- Obtain a corporate tax ID from the Revenue Department.
- Register for VAT if annual revenue exceeds 1.8 million THB.
3. Foreign Ownership and Restrictions
3.1 Foreign Business Act (FBA)
- Foreigners may own up to 49% in restricted sectors, unless:
- The company is BOI-promoted.
- A Foreign Business License (FBL) is obtained.
3.2 BOI Promotion
- Offers incentives, including:
- 100% foreign ownership.
- Tax holidays and streamlined visa and work permit processes.
3.3 U.S.-Thailand Treaty of Amity
- Allows American businesses to own 100% of companies in most sectors, excluding areas such as agriculture and land trading.
4. Additional Considerations
4.1 Employment and Work Permits
- Foreign employees must obtain work permits, with companies adhering to Thai-to-foreigner employment ratios (e.g., 4:1 for standard companies).
4.2 Financial Reporting
- Submit annual financial statements audited by a certified Thai accountant.
4.3 Licenses and Permits
- Certain industries, such as manufacturing, restaurants, and tourism, require additional licenses.
Conclusion
Company registration in Thailand involves a multi-step process requiring compliance with local laws and regulations. With opportunities for foreign investment in targeted industries, Thailand remains an attractive destination for entrepreneurs. Engaging legal and financial experts ensures smooth navigation through the complexities, enabling businesses to establish a strong foundation for success.