Foreign shareholding companies must follow guideline of private limited company registration in Thailand. Cost, professional fees and process to register a Thai company shall be discussed on step by step.
We will discuss of the following:
- Proposed name registration
- Memorandum and Article of Association
- Limited company registration
- Post registration duties
- Income tax and VAT
- Cost of registering a limited company
- Bank account open
- Social Security
- Advantages and disadvantages to setup a company
- Tips of Thailand company registration
- Business ideas
As name is an identity of a company that must be meaningful and generally 3 names are proposed in Thailand. Limited name is added in end of the Thai company name.
A registered name is valid for thirty days only and never extend unless re- apply. Apply for proposed name registration here.
Memorandum and Article of Association
A consultant will prepare draft MoA with necessary information and documents received from shareholders. There is minimum three shareholders are required to incorporate a limited company in Thailand.
An agreement must make between the partners (local and foreign) before prepare MoA as guideline and commence business in Thailand. Financial understanding (secret but open), responsibilities and limitation for the local partner must write in agreement.
A registered name shall be available in the first of MoA before objectives. Let the shareholders decide objectives of the company to fruitful writing in legal terms by the lawyer. As objectives are decorated by the clauses those are business activities.
A form where detail information of shareholders are written on including present and permeant address. Put said information in MoA correctly and check once again before company registration as an adviser.
Shareholding proposition, value of each share, total share capital and holding position of a company must be available in MoA.
Registered address, contact number and email must be available in MoA. All information shall be checked by the consultant and process them to register a limited company in Thailand.
Director (s) shall decide the amount of paid up capital as equity investment as process of register a limited company.
Thai company registration
A limited company registration in Thailand can start from the day of completion of statutory meeting. Thai company registration procedure must complete with next 90 days from the date of statutory date.
Lodge all documents to ministry of commerce by the expert and wait for a week to receive certified copies.
Before application, expert or consultant shall follow either money is injected or not for purchasing shares of the capital?
Information as MoA, detail of the directors shall be available at the time of application that the consultant will ensure.
Post registration responsibilities
All limited company in Thailand must prepare financial statement (FS) every month and submit to Department of Business Development (DBD). At least one auditor must appoint to audit the accounts and close it within 4 months from closing date.
If any company fail to meet the compliance is Baht 50K financial penalty must be imposed.
Directors of the company must call for annual general meeting within notice period of 14 days to the shareholders to attend. In case of failure to call for meeting on time is penalty amount in Baht 10K imposed as Thailand law.
Issuance share certificate to the shareholders and book of register must maintain to avoid penalty of Baht 20K.
Income tax and VAT
Any company must apply for Corporate Income Tax ID within 60 days of incorporation or commence business.
If a company has business turn over 1 point eight millions must apply for business tax or VAT, within thirty days from crossing milestone.
Company Registration Fee & Cost in Thailand
Government fee is Baht 7000 if paid up capital 1 million to register a limited company. Furthermore, if majority shares of the company is hold by local and 1 foreign employee is hired will be charged Baht 12000 for capital Baht 2 millions.
In case of majority share of the company is hold by the foreigner is recommended to pull up capital Baht 3 millions. Company registration fees is Baht 35000 when paid up is 3 M in Thailand.
Professional fee including Income Tax & VAT license is Baht 30000-100000. Breakdown of Thai limited company registration fees:
- Company stamp: Fee Baht 500
- Tax identification: free of charge
- VAT registration: free of charge.
- The government fee solely depends on the amount of capital, for the first Baht 1 million is Baht 6,500 and will add Baht 6,000 for every capital increase of Baht 1 million.
- Total company registration cost varies as government fee is not constant. But it is somewhere around Baht 24000 or Baht 30000.
- 7% VAT also implies a service fee. (Baht 1190)
- Subtotal with VAT thus equals to around Baht 25000 to Baht 31000
All of them included are company registration costs in Thailand apart from consultancy fees. Remember, the cost of applying visa and work permit is not included in the estimation.
Bank account open
A board meeting resolution, incorporation and MoA documents are required to open corporate account.
Government bank of Thailand and SCB are preferred banks for foreign shareholding companies to open the account.
When a company hire one or more employees must register in Special Security (as like EPF) within thirty days of hiring 1st employee.
Noted that, 6 months imprisonment of Baht 20k financial penalty if no application is made within 30 days in Thailand.
Current contribution rate is five percent whereas minimum wage is Bath 1650 and maximum wage is 15000.
Advantages and disadvantages to setup a company
Advantages of setting up a company in Thailand are:
- Ease steps to obtain work permit of foreign employees
- Government fee is reasonable that makes comfortable to setup a company.
- Local partner is available if there is good understanding
- Limited company is allowed to register if foreigner hold majority of the shares
- 100% foreign ownership is allowed through BOI approval
- Contribution rate of employee is 5 percent
Disadvantages of establishing a company are:
- It is practise to register a local Thai company (majority shares are hold by local)
- Statutory maintenance is strict and FS must submit every month !
- Salary package is higher than other countries
- Tourism, hotel and retail business setup is bit difficult in tourist places as foreigner.
Tips of Thailand company registration
- First of all, check either you have local partner or not in Thailand.
- As foreign director, speak with consultant either is possible to get a reliable local partner under financial terms and conditions.
- Speak with consultant regarding hiring foreign employees and what are the conditions of Thailand company registration.
- Contact the team of S & F Consulting Firm as displayed number over WhatsApp if any inquiry.
- As HQ of S & F Consulting Firm Limited is located in Malaysia and centralise operational flexibility, all are requested to contact in Malaysian contact number.
Business ideas to register a company
We have been receiving inquiries from foreign entrepreneurs how to register a company and how can we help to setup business in Thailand ? Some inquiries to setup business as new investors and some others like to expand same business to overseas (Thailand).
Know them before start of a company registration:
- Legal procedure: Incorporation, licensing, bank account, work permit & agreement.
- Costing: Business setup, product and service commence, rental, hiring staffs, promotion and so on.
- Work permit: Foreign shareholding company prefer to hire foreign employee as own guys to look after business operation.
- Location: Before setup a new company must confirm a location of the business if nature of business is directly targeting to Thailand people.
- Research in market: Yes, as foreign investor must know the market, opportunity and make smart plans to success in Thailand.
- Know the competitors: This is one of the most important point to know your competitors to setup price of goods and services and potential.
- Setup price: As you are going to do business in Thailand must fix the price of goods and services as promoter. Price comparison is effected in business unless reasonable.
- Branding: No way to let the clients know about your service and goods that you are. Be continue promotion in on and off line to meet the success.
- Mission: Every company has a mission to follow reaching a target business area. Review the mission in every quarter or 6 months either business missile has been working properly or not.
- Setup a Vision: From the inception of company registration to 10-12 years plans where investors want him to be there is vision. The path of visionary is dark, white, colour and red but never give up to be success in business.
- Accounting and audit
- Income Tax Submission and Filing
- Company Registration
- Company Secretarial
- Virtual office rent
If you like to register a private limited company may contact us.