A Guide For Company Registration in Thailand
Thailand has become a good place to start a company for many years. They can boast of a better government that supports the workforce by giving them incentives and quality infrastructure, to begin with. Such political stability also attracts more local and foreign investors in a short period which can guarantee a high return.
Opening a business in Thailand is not that simple. There are policies that you must follow to better contribute to the country’s economic growth. The majority of the companies practice free trade and other strategies to reach out to the market. But, first of all, learn how to register a Thai business throughout this post.
Types of Thai Companies
There are business types that exist in Thailand that you should know, such as:
1. Limited Company
If you are a foreigner in Thailand and longing for flexibility in running a business, registering with a limited company is a good choice. It is so-called the Limited Liability Company or LLC which is similar in the U.S. and Singapore.
A limited company is composed of a director and not less than three shareholders. Major duties are performed by the director while the shareholders are responsible for fiduciary works. Shareholders have limitations on participating in huge firm affairs.
2. Thai Majority Limited Company
This is under the category of a limited company wherein the majority of the shareholders are Thai nationals. As a result, it won’t require a Foreign Business License and can avoid tons of restrictions in operating the business.
3. Foreign-Owned Limited Company
This type of Thai company had over 49% of foreign nationals who operate the business. Thailand mandates a foreign-owned company to obtain a business license to get started.
What is The US-Thai Treaty of Amity?
Doing a firm in Thailand can be risky for foreign nationals, thus the Treaty of Amity was made for added protection. It benefits the US investors in two ways, including:
- It permits US nationals to have the right over majority shares of a limited company in Thailand.
- US nationals can establish a representative office in the country without obtaining Foreign Business License.
- It gives US nationals the freedom to engage in a certain business and be exempted from most restrictions, like Thai nationals.
Overall, US nationals running a business in Thailand are well-benefited by the treaty of amity. The next thing that you should know is the steps to register a company in Thailand.
Step-By-Step Company Registration in Thailand
Thailand has to offer plenty of incentives for local and foreign business owners. The board of investment will provide criteria for a company to be eligible for more privileges. Hence, investing in the activities promoted by BOI can speed up the growth of your business.
Here are the steps to begin with:
1. Directors and Shareholders
Thai limited companies must involve at least three persons to function well. The business will require three shareholders to execute a better operation. They all must be at legal ages and are capable of running a business. Those individuals hold an equal share that can only be transferred to others after registration.
2. Finding Location
Second, spot a head office and register the place with the number and a letter of consent if it is rented. Make sure to consider your target audiences in picking a location for long-term benefits.
Form a capital of at least 2 million for non-restricted foreign companies to ensure getting a permit. While restricted foreign businesses will need at least 3 million according to the Foreign Business Act. This shows whether the company has enough funds or is lacking. Additionally, it must be certified by the bank for better assurance.
4. Company Name
Thinking of company names is hard, so better secure your spot online through the DBD website. Putting the word “limited” at the end of the company name is necessary, as mentioned in the Thai Civil and Commercial Code. Wait for the approval within three days.
5. File Necessary Documents
When everything is settled, you can start filing a memorandum of association. This includes paying all the shares to easily engage with other foreign businesses.
6. Statutory Meeting
Electing the board directors and other staff is the next step so that you can submit the articles of incorporation and legal documents. All the documents must be signed by the engaging parties.
7. Company Registration in Thailand
The company must apply to register the business in Thailand 90 days after the statutory meeting.
8. Value Added Tax and Income Tax
When the company is registered, file the other important documents like VAT certificates to the designated departments.
9. Open a Corporate Bank Account
After getting the permit to operate the business, it is essential to open a bank account. There are many commercial banks around Thailand to help you out.
10. Other Documents
Foreign nationals are mandated to have a work permit. The company itself may sponsor non-immigrant employees a permit or visa as long as it meets the requirements of the Immigration Bureau and Ministry of Labour.
Thailand company registration is a long journey but is worth your time. There are many reasons why entrepreneurs choose Thailand, and one is its massive economic growth. No one can deny the fact that Thai companies continue to evolve. Follow the above steps if you plan to do business in Thailand.