Thailand has made remarkable progress in social and economic development over the last four decades. As the second largest economy in Southeast Asia, Thailand features an expanding middle class, a rising demand for consumer goods as well as a thriving business community.
Today, Thailand is one of the region’s fastest growing economies and offers strong prospects for investors in a variety of sectors. Here is a quick guide on getting started in Thailand.
Decide on your business
Possible business ideas include buying or manufacturing handcrafted goods in Thailand and exporting them for sale, or importing foreign food products or items for sale in Thailand. This is because Thailand is one of the main transportation hubs of Asia, with transportation connectivity with countries throughout the region via air, road, rail and sea.
You may also like to set up a travel office to serve customers locally, or buy or rent land near popular tourist destinations where you can set up a hotel, resort or guesthouse. With digital marketing and a network of domestic and international travel agents appointed, you will be able to draw customers from all around the world. As eating and socializing are important parts of the Thai culture, other ideas include a bar or restaurant where you can serve delicious food to both locals and tourists.
Choose your business structure
Before registering a business in Thailand, consider which company structure best suits your needs. Here are some possible options:
If you are prepared to own and operate the company 100%, you may consider registering a sole proprietorship. However, some industries such as banking and finance prohibit sole proprietorships from operating in them. In addition, foreigners from some countries are barred from setting up sole trader businesses in Thailand. Other nationalities may also find some business areas restricted to them. Check with a corporate services provider on the type of company you should be registering for, as well as whether you make an eligible applicant for some of these business structures.
There are three common types of partnerships in Thailand: unregistered, registered or limited. In unregistered partnerships, all partners are jointly liable for all debts and obligations of the partnership as the partnership is not considered a legal entity. Registered partnerships are legal entities with legal rights and responsibilities that are distinct from their individual partners.
In limited partnerships, the liability of each individual partner is generally restricted to the amount of capital invested in that partnership. In unlimited liability partnerships, however, partners will be liable no matter the amount of capital that was invested in the partnership.
Even though registering a partnership is somewhat easier as compared to registering other business structures, partnerships (whether unregistered, registered, or limited) are not eligible for work permits for foreigners. If you register a partnership, you will not be able to open a corporate bank account under the company’s name.
Company (public or limited)
There are two types of companies: public or limited.
A private limited company is formed by registering a Memorandum of Association and Articles of Association as its constitutive documents. A minimum of three shareholders is required at all times and shareholders enjoy limited liability. While private limited companies may be wholly owned by foreigners, some activities restrict foreign participation to a maximum of 49 per cent of all shares. Therefore, the maximum share structure for some activities is 51 per cent Thai ownership and 49 per cent foreign ownership.
If you are registering a public limited company, you will be able to apply to have your securities listed on the Stock Exchange of Thailand (SET) and offer shares, debentures and warrants to the public. The board of your public limited company must have a minimum of five members, with at least half of them being Thai nationals. Shares must have a face value of at least five baht each and be fully paid up.
A joint venture is formed when a group of people enters into an agreement in order to carry on a business together. Although it is not yet recognized as a legal entity in Thailand, income from this business structure is still subject to corporate tax.
Register your company
To register a company, you will have to first select and reserve a company name, which will be valid for 30 days. Your company name should not be identical or similar to an existing name, whether in terms of spelling or pronunciation. You will next have to pay at least 25 per cent of you initial investment capital into a corporate bank account.
You will also need to prepare the following documents:
- Articles of Association
- Memorandum of Association
- Application form and list of shareholders
- New director form signed by each director
- Declaration of Business Operation form
- Company name reservation
- Details of the offices and branches of your business
The total registration process takes about seven days for a private company and up to 30 days for a public company.
Engage a Corporate Services Provider
Foreigners who intend to establish a business presence in Thailand are advised to engage the services of a professional corporate services provider. Outsourcing responsibilities to a reliable corporate services provider is a cost-effective strategy that ensures that your business remains compliant while freeing up your time for more lead-generating tasks. A corporate services provider will also be able to provide corporate secretarial services and update your company’s governance procedures. It will also liaise with the Thai company registrar on any issues pertaining to your company’s incorporation, or any administrative documents.
At Reliance Consulting, we offer a complete suite of solutions, from company registration and corporate secretarial services to outsourced accounting, audit, tax and other professional corporate services. To set up your local entity in Thailand or find out more, give us a call at +66 (0) 20 263 637 or email us at firstname.lastname@example.org to get started today.