It can be difficult but beneficial to launch a business in Thailand. Getting a company registered with the Department of Business Development (DBD), a division of the Ministry of Commerce, is one of the initial steps in establishing one up in Thailand. Even though the registration procedure might be difficult and time-consuming, it is manageable with the correct assistance. We will outline the steps for registering a corporation in Thailand in this post, along with details on the required paperwork, costs, and procedures. This guide will assist you in navigating the registration process and making sure that your business is legitimately registered and in compliance, whether you’re a local entrepreneur beginning a new firm or a foreign business owner trying to establish a branch office in Thailand.
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Company Registration Thailand; Everything You Should Know About It in 2023
The Thai Embassy has reported that company registrations in Thailand are on the rise due to the country’s recent economic growth. This growth has attracted investors seeking to take advantage of the country’s increasing market demands and maximize their return on investments. Many foreign investors are drawn to Thailand for its strong government incentives and support, high-quality infrastructure, and trained and cost-effective workforce. Additionally, the country’s well-defined policies promoting liberalization and free trade, social and political stability, and strategic location in Asia make it an ideal location for business.
When registering a company in Thailand, there are several options available, primarily dependent on organizational requirements. These options include Thai Registered Ordinary or Limited Partnership, Thai Representative Office, Thai Regional Office, and Thai Branch Office. However, the most popular and appealing option among foreign investors is the Thai Limited Company. This type of business entity is similar to a Limited Liability Company (LLC) in the United States or Private Limited (Pte. Ltd.) in Singapore and is owned by at least three shareholders and assisted by at least one director.
Foreign investors have the option of registering a Thai Limited Company with either Thai or foreign majority ownership. A Thai Limited Company with Thai majority ownership does not require a Foreign Business License (FBL), while a Thai Limited Company with foreign majority ownership is required to have an FBL before starting operations in Thailand.
Additionally, the US-Thai Treaty of Amity provides significant advantages for US corporate and individual investors to set up companies in Thailand. This Treaty of Amity allows US nationals to either enjoy the majority of shares or all shares of a Thai limited company or establish a Branch Office or Representative Office in Thailand without needing to apply for a Section 17 Foreign Business License. US nationals are also exempt from most restrictions of foreign investment under the Foreign Business Act of 1999.
Furthermore, the Board of Investment (BOI) provides investment incentives to foreign and local entrepreneurs who wish to engage in agency-promoted activities. Businesses that meet the set criteria by the BOI are eligible for BOI promotion.
Requirements for Company Registration Thailand
According to the Thailand Board of Investment (2015), the following requirements must be met for company registration in Thailand:
- The company must have at least 3 natural persons as promoters who are at least 21 years old and legally eligible to act on behalf of the company. Promoters must hold an equal share of the company, which can be transferred to others after registration.
- The company’s head office must be located in Thailand, and a copy of the house registration number and landlord’s Letter of Consent must be provided.
- Foreign businesses operating in non-restricted industries must have a minimum registered capitalization of 2 million baht and 3 million baht for those in restricted industries under the Foreign Business Act. These requirements do not apply to Thai-owned companies.
- A memorandum of association must be filed with the application and a statutory meeting must be convened.
- A Certification of Letter from a bank must be provided that certifies the adequate funds in the Thai shareholder’s personal bank account.
- All shareholders/initial promoters and directors must sign the application documents in Thailand.
Steps to Company Registration Thailand
According to the Department of Business Development (DBD), the following are the steps involved in registering a company in Thailand:
Register the company name: All Thai companies must reserve their proposed company name with the DBD prior to registration. The proposed name must end with the word “limited” and must comply with guidelines set by the Business Department. This step can be completed online on the DBD website and takes 1-3 days for approval.
Memorandum of Association: The company must register a Memorandum of Association with the Ministry of Commerce (MOC). At this stage, all shares must be paid, and cabinet approval must be received for engaging in foreign business. The memorandum must include the company name, location, promoters’ names, finances, and business objectives.
Statutory Meeting: A company must submit its by-laws and articles of incorporation, which must be drafted during a statutory meeting. During this meeting, the board of directors and auditor of the company must also be appointed.
Company Registration: The Thailand company registry and the Memorandum of Association must be lodged with the MOC on the same day, provided that the statutory meeting has already been convened. The registration application must be submitted within 90 days of the statutory meeting.
Income Tax and VAT registration: After registration, the company must obtain Tax ID cards and VAT certificates and submit them to the registrar of the DBD under the MOC. Copies of these documents must also be submitted to the Central Filing Office of the Revenue Department in Bangkok.
Bank Account of the Company: A newly registered Thai company can open a corporate bank account at any Thailand Commercial bank if it has registered with the DBD, received the Business Registration Certificate, and provided a Company Affidavit.
Thai Work Permit and Visa: If the director/s with signing authority over the company or a hired employee is a foreigner, work permits and visas are required. The company can sponsor one non-immigrant B visa and work permit for its foreign director and employee, regardless of its shareholding, but must comply with all requirements set by the Ministry of Labour and Immigration Bureau.
If you are planing to do business in Thailand, do not hesitate to book a free online consultation at Thaipan Legal.
Frequently Asked Questions - Registering a Company in Thailand
The main types of business entities in Thailand are limited companies (both private and public), partnerships, branch offices, representative offices, and regional offices.
The process of registering a company in Thailand involves several steps, including reserving the company name, preparing the necessary documents, submitting the application, and obtaining the required licenses and permits. It is recommended to consult with a lawyer or a company registration service provider to ensure compliance with all legal requirements.
To register a company in Thailand, you need to fulfill certain requirements, such as having at least three shareholders for a private limited company, having a registered office address in Thailand, and appointing at least one director who is a Thai resident.
References
Department of Business Development (2021). Guide for Company Limited Registration. Retrieved from https://www.dbd.go.th/dbdweb_en/download/it_file/28_companyincorporation_info.pdf
Thai Embassy (n.d.). Businesses in Thailand. Retrieved from https://www.thaiembassy.com/thailand-business/thailand-company-registration
U.S. Department of State (n.d.). 2021 Investment Climate Statements: Thailand. Retrieved from https://www.state.gov/reports/2021-investment-climate-statements/thailand
