Fast & Hassle Free
Setting up your own company in Thailand is as easy as 1-2-3 when you partner with a competent and reliable local professional firm. Let Reliance Consulting be your partner in ensuring a fuss-free Thailand company registration.
Whether you’re a local entrepreneur exploring your business options or a foreigner thinking of launching your next venture in Thailand, you will be delighted to know that the government has made it more accessible and convenient to start a company by reducing the necessary steps you need to do to register your business. Such ease in setting up became instrumental in the increase on new business registration in Thailand.
From launching a series of new government incentives to providing tax allowances and making it hassle-free to acquire work permits, both Thai and foreign nationals would find running a business in Thailand a breeze. A wide range of business structures can be explored by locals and *non-locals alike looking to establish a profitable venture in Thailand.
*subject to the terms and conditions of the Foreign Business Act (FBA)
BUSINESS STRUCTURE: SETTING UP A COMPANY IN THAILAND
Entrepreneurs are offered a range of business entities that they can choose from when thinking of starting a Thailand business. Each business structure has a different set of rules that need to be adhered to.
Reliance Consulting can help local and foreign nationals choose the appropriate business structure that suits their business. Choosing the right business entity depends on the nature of business.
If you’re a foreign business owner who wants to own 100% shares of your business, the following options are available to you:
The BOI (Board of Investment) is the official investment promotion agency in Thailand, providing both local and foreign investors the information and services they need to know about investing in the country. Investors can rely on the BOI to help them reduce the risks that come with investing in Thailand as well as minimise the costs associated with their investment and know the options available to improve acquisition of their return on investment.
A BOI company can be 100% fully owned by a foreign entrepreneur who may obtain the following incentives and exemptions:
- Corporate income tax exemption for up to 8 years
- Import duty exemption or reduction when importing machinery or raw materials
- Visa and work permit without the need to meet the four (4) Thai employee per permit requirement (processing of work permit takes four hours at the One-Stop Service Centre)
- Income tax and dividends exemption for juristic persons
- Double deduction on transportation, electricity, and water supply costs
- Allowed to bring foreign skilled workers and experts
- Protected against business nationalisation
- Allowed to own land
Requirements to operate a BOI Company
In order to successfully register as a BOI company, foreign business owners are required to meet the minimum capital investment and actively promote their business venture. They also have to meet the conditions required for promoting a business venture. Applying for BOI company can take six to nine months.
When you opt for a BOI company, Reliance Consulting can provide you with a complete BOI company registration package that includes planning, application for a BOI company, visa and work permit assistance, accounting services, and BOI company reporting and compliance until the duration of your contract with us.
Foreign Business License (FBL)
Foreign entrepreneurs who are engaged in a business that is restricted under the Foreign Business Act are required to have a Foreign Business License (FBL) prior to business operations. An FBL is required particularly if a company has a majority of shareholders who are foreign.
Under the Foreign Business Act of Thailand (B.E. 2542), three types of business activities fall under the category of restricted business and are subject to certain limitations:
List 1: Businesses that aren’t permitted to foreigners – the activities that fall under this list are strictly prohibited to foreigners
List 2: Businesses that are permitted to foreigners but are subject to conditions – the activities under this list are prohibited to foreigners unless the Cabinet provides permission to operate
List 3: Businesses that are not yet permitted to foreigners – the activities under this list are prohibited to foreigners unless the Director-General of the Commercial Registration Department (CRD) provides permission to operate
Foreigners may invest up to 49% in a company engaged in a restricted business provided that such business has a majority of shareholders who are Thai. When a foreigner holds more than 49% of the company shares, an FBL needs to be acquired.
Requirements to obtain an FBL
To acquire an FBL, foreigners need to fork over 2 million baht as minimum capital requirement for business activities under List 1 and 3 million baht for business activities that fall under Lists 2 and 3. Along with the minimum capital requirement, an application form needs to be accomplished and filed with the CRD, subject to the approval of the Cabinet or the Foreign Business Committee, depending on which List the business activity belongs to.
Approval depends on a variety of criteria that mostly hinges on the impact of the kind of business being proposed. It may depend on the advantages and disadvantages of such business to the safety and security of the nation, how it may contribute to the nation’s economic and social development, the size of the business, and the local employment it may require, amongst many others. Application for an FBL may take about six to nine months to complete.
When you need to obtain an FBL, Reliance Consulting can help you secure one. You can consult us if you need expert advice on the type of business you should operate to successfully obtain an FBL. We can help you explore the Thai business landscape to know which business may provide more benefits, whilst protecting and promoting the interests of the country. We can also provide valuable advice on the kind of unique business you should put up to obtain such license, granted that it doesn’t compete directly with any existing Thai business and engages in dealings that involve members of affiliated companies. Together, we can effectively work on getting that FBL faster, whilst strictly complying with rules and regulations.
Company Registration under the US Treaty of Amity
Americans and American corporations may have 100% full ownership of a foreign company subject to the limitations under the Treaty of Amity. The treaty is an exclusive agreement entered into by Thailand and the US that provides US citizens and US companies with the same rights as Thai national or Thai-owned companies.
Approval of company ownership under this treaty, however, is subject to a number of restrictions. US investors are not allowed to be involved in the following industries:
- Banking that involves depository functions
- Fiduciary functions
- Domestic trade that involves agricultural products of the indigenous kind
- Ownership or exploitation of land and other natural resources
Requirements to operate an Amity Company
If you’re a US citizen or US corporation looking to register a company in Thailand under the Treaty of Amity, you must meet the following requirements:
- The company must have American citizens holding the majority of shares or must be registered in the USA with American citizens holding the majority of company shares
- At least 50% of the company’s directors are American citizens
A minimum capital investment is also required, as stipulated under the Foreign Business Act (FBA). The minimum capital requirement is 2 million baht, as long as the business does not belong to any of the business activities that are restricted by the FBA. If the amity company belongs to any of the business activities that are restricted by the FBA, the minimum capital investment is pegged at 3 million baht. Applying for an amity company can take four to six weeks.
When you need to apply for an amity company, Reliance Consulting can assist you in accomplishing and filing the necessary documents to ensure approval. We can also advise you on what other documents you need to obtain to complete your registration, such as an FBA, which is needed for any foreign owner operating a business that is restricted by the FBA. We can walk you through the rules and regulations that govern individuals and corporations looking to operate a business under the Treaty of Amity.
Foreigners are granted 100% full ownership of a branch office, which is regarded as an extension of a foreign headquarters and provided that it uses the same name as its parent company.
Ownership is granted to foreign entrepreneurs as a branch office, under Thai law, is not recognised as a legal business entity that is defined as having directors or shareholders. A branch office, though, may be subjected to tax, if the income it earns is from sources generated within Thailand. Liabilities are also not limited to the Thai branch office but to the overseas head office as well.
Requirements to operate a Branch Office
If you’re looking to set up a branch office in Thailand, you need to meet the minimum capital investment of 3 million baht for each business category. You also need to bring this investment into Thailand in required intervals until the end of the third year of business operations.
In order for your application to be approved, this largely depends not only on the capital investment but also on the size of your business, how the parent company has performed over the years, the uniqueness of the product or service, and if there isn’t a local competitor to go head to head with. Applying for a branch office may take six to nine months to complete.
When you need to apply for a branch office, Reliance Consulting can be your partner to ensure that you efficiently go through the process of application without any error or omission in meeting the requirements. We can assist you in the steps you need to take to secure the approval of the special committee responsible for overseeing the company’s benefits for Thailand (if the branch office provides some sort of technology transfer, for example, that can benefit the country) and effectively complete your application despite the complex process, timeline, and setup cost involved.
A 100% full ownership can be granted to a foreigner who wants to operate a representative office, as this is recognised as an extension of a foreign headquarters and does not have any local directors or shareholders.
Ownership of a representative office is subject to a few limitations. For starters, it must not be involved in profit seeking or profit making, must not be making any sales offers, and must not do business with any locals in Thailand. On the other hand, it can operate based solely on the following activities:
- Providing a report on Thailand’s business movement
- Extending advice on the products being sold to customers or distributors
- Providing information on new products or services
- Inspection and control of the quality and quantity of purchased or ordered goods that are being manufactured in Thailand
- Sourcing of goods and services within Thailand
On top of these limitations, the representative office is required under the law to submit its entire operating expenditure from its overseas headquarters, which should total at least 2 million baht. A “principle manager” should also be appointed by the headquarters to oversee day-to-day operations, which can be a local or foreign national. When a foreigner is appointed to this position, it is required by law that the individual be a resident of the country and has met all the requirements to legally work in Thailand.
Requirements to operate a Representative Office
Foreigners who want to put up a representative office in Thailand are required to submit corporate registration requirements, which include the registration certificate, articles of association, financial statements, and passports of the shareholders. All of these should be supplied by the headquarters and notarised on the same location as the head office.
Application forms are required to be signed by the representative manager appointed by the head office. The forms should also be signed in person in Thailand if the appointed representative manager is foreign. All application forms must also be translated in Thai as issued by the Ministry of Commerce. Application for representative office can take three days from the day of document submission. Registration and representative license may be issued within 15 to 20 working days as long as all necessary documents are completed and submitted.
When you need to apply for a representative office, Reliance Consulting can help you in handling and submission of all required documents. We can give valuable advice as well on the next steps you need to take once approval to operate has been granted, such as finding an office to lease, opening a local bank account, hiring of local employees, and receiving remittance from your headquarters. We can also assist you when working on closing your representative office, which may be completed within two months once the office has fulfilled its purpose.
Thai Limited Company
Foreign nationals may opt to operate a limited company in Thailand, provided that the company is formed with Thai nationals.
The most popular business structure in Thailand, a limited company works like a limited liability company (LLC), which is defined as having limited liability. When a company has limited liability, this means shareholder liability is confined solely on the amount left unpaid on their shares and the owner and the management are treated as separate from one another.
On top of these characteristics, a limited company is preferred by most business owners because of the following reasons:
- There is complete control on business operations as management can utilise a tiered corporate share structure and control may be maintained by adjusting share voting rights and dividend allocations.
- There is flexibility in terms of engaging in whatever business types, as long as these have secured relative business licenses. Flexibility also extends on the company’s name, address, objectives, as well as its directors and shareholders.
- Corporate savings, checking, and foreign currency accounts may be acquired, as well as take advantage of internet banking.
- Multiple work permits may be secured for foreign executives and members of the staff. Visa application is hassle-free as well, as long as the company meets the required capital and criteria of the labour department.
Requirements to operate a Thai limited Company
The good news is that the Thai government has made it fuss-free to set up a limited company for foreigners. As long as the company is formed with Thai nationals and majority of the shareholders are all Thai, business registration can take only three working days. If majority of the shareholders are foreign-owned, foreigners are required by law to secure an FBL.
Incorporating a Thai private limited company also requires the following:
- Registered incorporation papers
- At least one director
- A minimum of three promoters
- An auditor
- Articles of Association
- Memorandum of Association
- A statutory meeting
When you want to set up a Thai limited company, Reliance Consulting can assist you from beginning to end with just eight easy steps:
- Securing a company name: We can reserve a company name for you with just a copy of your director’s passport.
- Company registration: We can handle registration of your company, provided you submit necessary documents such as copies of the passports of at least three of your directors, their addresses, your company address (which we can also provide during registration), and the business activities your company will be involved in.
- Opening a corporate bank account: We can help you find a bank and branch that best fit your business, as well as make recommendations for the type of bank account and the signatory to complete this.
- Registration of VAT: We can assist in accomplishing the documents needed for VAT registration such as a copy of the lease agreement and other documentation that must be secured from the building owner of your office.
- Registration of Social Security Fund (SSF): We can handle registration of your Thai staff to the SSF, as long as you provide us with copies of their identification cards, photos, salaries, and respective positions in the company.
- Application for visa: We can come up with a customised package to help you secure this.
- Application for work permit: We can assist in securing a work permit for you, provided you give us copies of your medical certificate (certified by a Thai doctor), education certificates, photos, salary details, and your position in the company.
- Extension of visa: We can help extend your 90-day visa, provided you make available the required documents from your company, which may also include your VAT details and registration of your local employees to the SSF.
Thai Holding Company
Foreigners may own a holding company in Thailand, provided that there is a genuine Thai partner to be involved in the business venture. This local partner will be a shareholder that must invest his own capital.
It is prohibited under Thailand’s company laws to have a local Thai partner who hasn’t invested his own capital and holds company shares owned by somebody else. It is thus important to partner with genuine shareholder to operate your business under this structure.
Requirements to operate a Thai Holding Company
There is no need to find a wealthy Thai investor to set up a holding company in Thailand. All you need is a local person you can trust, who can fork over 51% of the registered capital of 100,000 baht.
You can set up a second company to hold majority of the company shares than offer shares from the operating company. This second company, being an investor, has a substantially lower capital than the operating company as its purpose of existence is to hold the operating company’s majority of shares. What you need then is a Thai investor who can finance the holding company’s capital that is much lower than the 51% of the usual 1 million baht required from regular investors. Applying for a holding company can take five to seven days to complete.
If you’re eyeing to set up a Thai holding company, Reliance Consulting can help you set up a second company to act as the holding company. We can assist in seeking a credible Thai investor to provide the 51% of the lowered capital. We can also help handle the loan requirements that you need to secure from your head office for financing the purchase of the operating company’s majority of shares. On the strength of the loan and a pledge agreement, the purchased shares will be entered into as collateral for the loan acquired.
As a result of this arrangement, both the operating and holding companies will be recognised as Thai companies who will be allowed to be involved in any business activity. This is because 51% of the operating company will be held by the holding company, whilst 49% will be held by foreign owner. This 51% is to be held by the true local investor, whilst 49% is to be held by the foreign owner.
Let Reliance Consulting be the local partner you can depend on to ensure a successful company incorporation in Thailand. Contact us for a free consultation.
Other Business Structures
Foreigners may also be granted 100% full ownership when they start the following business structures:
- Export Company: This can be owned 100% by a foreigner, provided that the revenue is generated from the Thai goods that are exported outside the country.
- Hotel Management Company: As long as the company has been registered as hotel management, foreign nationals may own this type of company with 100% full ownership.
- Manufacturing Company: Foreigners who set up a company engaged in manufacturing goods in Thailand and are being exported can be granted 100% full ownership, provided that all the revenues from such come from outside the country.
YOUR RELIABLE PARTNER FOR STARTING A BUSINESS IN THAILAND
Having a local firm to assist in forming a company in Thailand is a wise move for today’s entrepreneurs. As Thai rules and regulations on company incorporation are quite complicated, local and foreign nationals are encouraged to partner with a professional firm specialising in forming a company to ensure compliance with Thailand’s strict business registration laws.
Reliance Consulting, with its unparalleled expertise and experience in incorporating a company, can be your trusted partner in setting up a business in Thailand. Whether you’re eyeing to set up a new company or want to know the next step to complete a registration under the Board of Investment (BOI), Reliance Consulting is the firm to rely on to ensure that all your requirements will be completed with ease and efficiency in adherence to the laws of the land.
Reliance Consulting is:
FAQS ON COMPANY REGISTRATION
Who can start a company in Thailand?
Locals and foreigners alike can set up their own business in Thailand. More and more entrepreneurs are encouraged to establish a company in the Land of Smiles due to the abundance of local talent, sufficient infrastructure, attractive incentives, and the strong support of the government. Starting a company in Thailand is quite straightforward but entails knowing in great detail the rules and regulations that govern company incorporation to avoid being penalised for error or omission. This means knowing the documents that should be completed before filing, the fees involved, and keeping in mind the Thai business laws and regulations that should be complied with to ensure an efficient company formation.
What are the steps for company incorporation in Thailand?
The Thai government has reduced the number of steps that should be followed to make company incorporation easier and more convenient for new entrepreneurs. The first thing you need to do is research and study the business landscape to know the right niche where you can succeed as an entrepreneur. Next is to seek a Thai partner you can trust, which is particularly important if you’re a foreign national setting up a business in the country. This is because foreigners are prohibited from having 100% ownership of the Thailand business but depending on the business structure you choose, full ownership could still be possible. The next step is to choose the appropriate business entity, reserve your company name, prepare the essential documents for company registration (which include the list of shareholders, share capital proof of payment, and meeting notes, amongst others), company registration with the Department of Business Development, VAT registration, and getting the necessary business licenses to operate your business. Final steps include getting the appropriate visas and work permits for your directors and staff, securing an office space, and finally, opening a corporate bank account.
What are the documents required for company registration in Thailand?
The Department of Business Development of the Ministry of Commerce requires every business registration to submit the following documents:
- Application form for company registration;
- List of shareholders;
- Proof of payment of share capital;
- Meeting notes;
- Memorandum of Association signed by the shareholders and contains their personal information, company address, business activities, and registered capital;
- Documents for Tax and VAT registration;
- Documents for securing proper business license;
- Documents for opening a corporate bank account; and
- Documents for visa and work permit application.
Documents and forms to be submitted must be written in Thai.
How many shareholders are required under Thai law?
Under a private limited company, which is the most preferred type of business entity in Thailand, a minimum of three shareholders is required, which may be composed of either Thai nationals or foreigners. The shareholders under a private limited company must be non-juristic (real persons) and own shares in the company.
Thailand company registration for foreigners, what are your choices?
Foreign nationals have a number of options available to them when they register for a company in Thailand. Aside from a private limited company, they may opt for a Board of Investment (BOI) company, open a business that requires a Foreign Business License (FBL), register a company under the US Treaty of Amity, open a branch or representative company, put up a Thai holding company, or set up either an export, hotel management, or manufacturing company.
What is the maximum number of shares a foreigner can own in a Thai limited company?
Thai law restricts company ownership of foreigners to only 49% of all shares. The remaining 51% of shares should be held by Thai shareholders.
How can I open a bank account in Thailand?
Once registered, a company must pass a resolution granting authorisation of opening a corporate bank account. An applicant must then prepare the following documents as required by the bank:
- Certificate of company registration;
- Memorandum of Association;
- List of shareholders;
- Company by-laws;
- A copy of the BOJ 3 form, which provides a record of the company registration details, or a copy of the BOJ 4 form, in case there were amendments to the company registration details;
- Tax identification card; and
- Passports and Thai identification cards of the authorised director, shareholders, and the person authorised to open the bank account.
Foreign companies who are opening a bank account in Thailand are required to submit the same documents that should be certified by the company registrar of the government agency in which the company was registered and must also be notarised by the Thai embassy. For companies (either local or foreign) with foreigners as majority shareholders, a Foreign Business License (FBL) may be required as proof that the foreign national has been granted permission to engage in a Thailand business. Work permits may also be required for signatories who are foreign nationals. The presence of the directors of the company is also required when opening a Thailand corporate bank account
How long does it take to register a company in Thailand?
The process depends on the type of business entity you will register as a company. Registering as a BOI company typically takes three to six months. Opening a business that requires a Foreign Business License (FBL) also takes about three to six months to complete. Setting up a business under the US Treaty of Amity can take at least four to six weeks, whilst applying for a holding company can take five to seven days. Business registration for branch offices and representative offices may take two to three months to complete. The quickest way to register a company in Thailand is to apply as a Thai limited company, which typically takes three working days, provided that the company is formed with Thai nationals with majority of its shareholders being Thais as well.
I want to incorporate a Thailand company. Are resident directors mandatory?
Whilst it is not mandatory to have resident directors when incorporating a company in Thailand, it is recommended, under the Thailand Foreign Business Act, to have at least one individual of any nationality to be appointed as director as long as this person is a Thailand resident. Having a Thai resident director is useful for when a company needs to interact with local agencies or institutions that require a Thai resident to sign documents in person.
As a foreigner, is it difficult incorporating in Thailand?
Company incorporation in Thailand is quite easy and straightforward, as long as you complete all the documents required and know the legal procedures and the government agencies responsible for handling business registrations. For foreigners, though, it may be challenging to deal with all the legalities involved, particularly the differences in culture, tradition, and language that must be taken into consideration when setting up a company in such a traditional country. It is therefore recommended that foreign nationals partner with a local professional firm with English-speaking Thai staff who knows the ins and outs of company incorporation in Thailand and can communicate on your behalf.
Should I incorporate a Thailand LLC, branch office, or representative office?
Local or foreign entrepreneurs may choose to register as a limited liability company (LLC) or limited company, a branch, or representative office, depending on the type of business they intend to operate. Most business owners prefer to register as a private limited company, as this acts as a standalone company under Thai law, with the company’s shareholders restricted only to the amount of unpaid shares, should there be any, each of them holds. Another advantage of registering as a limited company is that company directors are allowed to apply for work permits.
A branch or representative office, on the other hand, is not recognised as a legal business entity that has local directors or shareholders but an extension of their foreign headquarters. Their liabilities extend to their overseas head office, not only to their Thai branch. They aren’t allowed to do business with any locals in Thailand and must not be involved in profit-seeking or profit-making activities.
Is there a Thai authority that can guide me on Thailand business incorporation options?
The Department of Business Development, which is under the Ministry of Commerce, is the Thai authority on business incorporation-related matters in Thailand. All business structures should be registered under this department. This department also specifies the required documents and qualifications that should be followed when incorporating a company in Thailand.
Is Sole-proprietorship needed to register?
The business, of which a single person is an investor and a sole proprietor, can be registered or not. Except for the businesses under the Commercial Registration Act 1956, the business owner must apply for a commercial registration within 30 days from the commencement date of the business.
Can the company be founded by 100% foreign shareholders?
The company can be founded by 100% foreign shareholders to run some kinds of businesses. Under the Foreign Business Act, foreigners are prohibited from engaging in some businesses. However, they are allowed to run some businesses upon receipt of a license or certificate, as the case may be.
How maximum or minimum numbers of shareholders to register a company?
Each business must have a minimum of 3 shareholders, maximum is not specified.
Who have to go to the bank to open a bank account?
Can they assign others to go to open the account?
The authorized persons according to the company affidavit and the company shareholders who has at least 25% shares are required to go to the bank for bank account opening. However, in the case that the authorized persons or the shareholders are not available to go to the bank, they can.
Should the company register VAT?
According to the law, the business having the revenue over 1.8 million Baht per year, the company must have VAT registration. However, the company which just started or whose income does not meet 1.8 million Baht should consider as following:
- If the business is not eligible for VAT exemption, and the business is having income over 1.8 million per year in the future, a VAT registration is a good choice so that the company can accumulate the input VAT from the start of business which will be used to deduct from the income tax.
Is Thai shareholder acting as an employee needed to register and pay for the social security fund?
Shareholders are exempt from employee registration and pay the security fund with Social Security Office although the shareholders will have the employment contract and get the salary from the company.