A private limited company is an ideal structure for most foreign businesses and entrepreneurs. You can set it up either in partnership with a Thai national or opt for foreign ownership (up to 100%). A limited company in Thailand is one of the most popular business structures, especially for foreigners intending to start a business in Thailand.
What is a Limited Company in Thailand?
A limited company is a Thai equivalent of the Limited Liability Company (LLC). Moreover, it is usually the preferred first step to setting up a new business in Thailand. All such companies have directors, shareholders (both Thai and foreign in many cases), promoters, and “limited liability”. In this case, limited liability means that the shareholder in a Thai company can only ever lose only the capital they invested.
Moreover, the rights and obligations of all parties are set down in writing in the company’s Articles of Association. Therefore, everyone has a clear understanding of their legal standing within a company. However, it is unlike some joint ventures where some duties and privileges can drift into a complex grey area. With a limited company in Thailand, all legal entitlements and responsibilities are clear and available for reference in requirement.
Here’s what you need to start a Limited Company in Thailand.
- Three (or more) shareholders
- One (or more) director
- 2M THB in capital per foreign employee
- A registered corporate address in Thailand
Benefits of a Limited Company in Thailand
Limited Liability
The liability of the shareholders is limited to the registered capitalization of the company. However, this provides high-level security and protection for shareholders and investors.
Full Control
By utilizing a systematic corporate share structure, control of the company is possible by adjusting share voting rights and dividend allocations.
Flexible Options
A limited company may engage in all business types business with relative business licenses. Company shareholders, directors, objectives, names, addresses are all flexible.
Foreign Ownership
It is possible for foreigners to own 100% of the shares of a company in Thailand. However, it is possible if their activates fall under business criteria without restrictions of the Foreign Business Act.
Corporate Bank Account
A registered Thai company is eligible to apply for a corporate savings account, checking account, and/or foreign currency account. Online banking functionality is available.
Work Permit & Visa
According to the registered capital and other labor department criteria, a company may apply for multiple work permits to accommodate foreign executives and staff members.
Ways to set up a Limited Company in Thailand as a foreigner
Thai Company
- Majority Thai
- Foreign business license not mandatory
- 2M+ THB in registered capital*
- No restrictions in its activities (if lawful)
- 1:4 foreign to Thai employee ratio
A limited company that is majority-owned by a Thai national generally doesn’t encounter restrictions. Additionally, it can engage in any business activity and doesn’t face capital requirements (unless it employs foreigners). Consequently, it is beneficial to form a business partnership with a Thai national, in order to meet the legal definition of a “Thai company”.
Foreign Company
- Majority foreign (> 49% up to 100%)
- A foreign business license (FBL) mandatory
- 3M+ THB in registered capital
- Restrictions in activities as per the FBA
- 1:4 foreign to Thai employee ratio
However, if a limited company is majority-owned by a foreigner, it is considered a foreign company. Therefore, it must obtain an FBL before engaging in business activities unless promoted by BOI or registered under Treaty Amity. Moreover, such a company now faces stricter government restrictions and its scope of business has restrictions of the FBA.
Thai limited companies are the most common form of business registration in Thailand. We are a full-service Thai law firm. Let our Thai lawyers or any of our foreign lawyers provide you with guidance when registering your limited company in Thailand. Therefore, mail us at [email protected] for further assistance.
