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How to register a company in Thailand
How to register a company in Thailand?
If you have real intentions of doing business in Thailand, then setting up a company and doing legitimate business in Thailand is fairly straightforward and elementary, especially compared to many other countries. It has a freewheeling market economy, which is somewhat flexible. The Thai legal system as regards company and tax matters is largely systematic with steadfast patterns, after the USA and European countries such as Switzerland and France. A range of new government incentives, tax allowances for easier access to work permits for non-Thai nationals precipitated this upgrade to happen. Foreign owned business now plays a vital role in Thailand’s growing economy.
Over the past 8-10 years, registration of new businesses by foreigners has increased dramatically in Thailand. This surge in registration shows growing demand for Thai market. Thailand offers eclectic business structures, many of which are also available to foreigners. Under normal circumstances, you will need to establish a registered Thai company in order to carry out business in Thailand, and you will therefore need to understand your options commensurate to the types of company you can register.
|Here are the prevalent company registration options in Thailand:
Thai Limited Company
Because of its malleable features, the Limited Company is the most appealing form of business organization among foreigners doing business in Thailand. A private limited company may be totally owned by a foreigner; however, the participation is generally permitted up to a maximum of 49 percent.
- The accountability of the shareholders are limited to any amount left unpaid on shares
- There is a separation between owners and management, which gives efficacious control of the company to the managerial body.
|The incorporation of a Private Limited Company requires a few fundamentals:
|§ A minimum number of three Thai nominees.
§ At least one director
§ An auditor
§ A memorandum of association
§ A statutory meeting
§ Registration of the incorporation papers
§ Obtain an income Tax registration I.D. number.
Not only that the business must also comply with accounting procedures as set out in the Civil and Commercial code, the revenue code and the Accounts act.
Companies are also required to deduct employee taxes from their salary, and pay national insurance (for want of a better term) which must be paid for a minimum of four employees.
Limited Company Registration Procedure in Thailand
|Book Your Proposed Company Name||The guidelines of the Business Development Office in the Ministry of Commerce must be observed in the name reservation process.|
|File a Memorandum of Association||The Memorandum of Association of the Thai limited company has to be filed with the relevant Thai authorities.|
|Summon a Statutory Meeting||A statutory meeting must be convened to make all the appointments.|
|Company Registration||After having registered with the Thai government, the establishment of the company is possible.|
|VAT or SBT Registration||A Limited Company may have to register for the Value Added Tax or Specific Business Tax if the business activity demands that.
The cost of registration is 5,500 baht per million baht of capital (applicable for a private limited company).
- At least two partners are required for setting up a Thai partnership, but may be more if required.
- Unlimited liability is shared among all partners involved. If any partner abets other partner in any wrongdoing regarding taxes, debts or other liabilities, he will be equally responsible.
Registering a Thai Partnership is not obligatory, but the partners can register if they wish as defined by section 1064 of the regulations. Without the consent of all partners, no one can become a member of the Thai partnership. For obvious reasons, this type of contract is not generally encouraged.
Limited Thai Partnership:
There are two options when building such a partnership. The first option is where only one of the partners holds sole limited liability, and the other is where liability is shared equally by all.
Unlike an Ordinary Thai partnership, Limited Partnerships need to be registered.
Thai Representative Office:
When a foreign company wants to run business within Thailand, a representative office may be set up through which a Thai Business License may be acquired.
A Thai Representative Office enables a company to involve in an “international trading business” without incurring Thai Tax Liability. These offices are permitted to source goods for the parent company, check on the quality of the sourced goods, and report to the parent company on market trends. Representative offices are forbidden from generating revenue.
They are required to apply for a tax ID card and file income returns whether or not they generate taxable income. There is a 2,000 THB application fee for Representative Office registration with an additional 20,000 – 250,000 THB (0.5% of registered capital) fee if the application is approved.
Thai Branch Office
A branch office makes it feasible for you if you want multinational businesses to expand into Thailand. A Thai branch office is not a separate business entity, so the parent company will be liable for the branch’s debts and other liabilities.
No specific registration is needed, but the Thai branch will have to abide by the usual rules and regulations by registering for the VAT, getting a foreign business license and applying for corporate tax ID.
100% Foreign Ownership Option is open for a few type of company only.
- US Treaty of Amity Company Registration
- BOI – Board of Investment Company
- Foreign Business License
- Thailand Hotel Management Company
- Thailand Export Company
- Thailand Manufacturing Company
- Representative office, Regional Operating Headquarters & Branch Office
A LAWYER IS STRONGLY RECOMMENDED!
Starting business in Thailand may take you several weeks to complete the process. This is mainly due to the registration procedures and the required documents and forms being in their native language, Thai. It implies that you need someone you can trust and who is able to communicate in Thai on your behalf to be able to successfully review and complete your company registration process.
If you want to do business in Thailand and need legal assistance in registering your company Siam Legal can give you a one stop service for your convenience. They can help you to set up a company while getting you a Thai work permit and Thai visa at the same time. Not only that they can give you relevant pieces of advice on doing business in Thailand efficiently and their Thai lawyers or foreign lawyers provide you with guidance when registering your limited company in Thailand.
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Klontoey District, Bangkok 10110
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