Often, figuring out how to set up a subsidiary is the most difficult aspect of an expansion. You must take into account all of Thailand’s subsidiary laws. Henceforth, choose the finest business structure for your organization, and schedule time and money for the incorporation procedure. Konrad Legal is your best option to set up subsidiary in Thailand more quickly without going through any hefty procedure.
Set up Subsidiary in Thailand – Process
A Thailand subsidiary’s formation can be challenging. Due to this, you must first be aware of a number of Thai-specific business issues. The Foreign Business Act imposes limitations on foreigners and identifies a number of industries that call for particular authorizations. Therefore, you must know the minimal requirements, conditions, and free trade and economic cooperation agreements between your nation and Thailand.
Thailand has a large number of provinces, therefore you need to carefully decide where to locate your company. There are frequently different rules, fee schedules, and approval standards in each province. You may be unfamiliar with the region-specific requirements. In that case, consult an expert to determine which province is the most suitable for your sector.
Partnerships, limited companies, joint ventures, representative offices, branch offices, international headquarters, and joint ventures are the seven business structures that Thailand offers to organizations wanting to incorporate. Although each has particular benefits and drawbacks, the majority of firms opt to incorporate as limited companies.
The following is the establishment procedure for a Thai subsidiary:
- Prepare the Memorandum of Association involving at least three promoters.
- Transfer control of the company to the directors from the promoters.
- Obtain equity from the sponsors and subscribers.
- Create a registration request for the company’s location.
- Send the form to the Registrar.
Subsidiary Laws in Thailand
Thailand’s private limited liability company rules are extensive. There must be a Board of Directors to set up and run a Subsidiary in Thailand. You have to decide the number of directors at the shareholders’ meeting. While some directors may be foreigners, at least two-fifths of the board must be Thai citizens.
There are no restrictions on the minimum or maximum share capital for a limited liability business. Only 49% of the share capital may come from foreign participation if your commercial activities have restrictions under the Foreign Business Act. However, if your business is gets a Foreign Business License, this proportion of foreign ownership may vary.
Your company’s directors must schedule an annual general meeting within four months of the end of the fiscal year. Note that, this is in order to obtain shareholder approval for the audited financial statements. Within one month of the meeting, the directors must file the final audited financial report and the shareholder list.
Benefits of a Subsidiary in Thailand
After you set up a subsidiary in Thailand, you will have all the legal right to do business in the kingdom. Moreover, a limited liability company incorporation, in particular, comes with a number of extra advantages. Your subsidiary will be free to establish its own culture based on Thai culture, independent of the rules of the parent firm. Additionally, since the subsidiary would be responsible for assuming these risks, the parent firm won’t have to worry about any lawsuits or losses the subsidiary suffers.
At Konrad Legal, we want to accelerate and simplify your expansion. We are a practical substitute for opening a Thailand subsidiary. Reach out to us for the best and most convenient process of setting up a subsidiary in Thailand. Email us your details at [email protected] to book a round of free consultation with us.
