As a foreigner, if you are planning to register a company in Thailand, you must have professional guidance before proceeding. It should start from the basic regulations of company registration in Thailand. Henceforth, you must know that various legal and authoritative regulations vary significantly for foreigners starting a business in Thailand.
You may have read various articles that suggest the information that you must have to register your company in Thailand. But in this article, we will be serving something very different. It is because this article does not originate from theoretical knowledge and concepts. But, it outlines our practical experience in the domain for more than a decade.
For your better understanding, we have given this article a FAQ (Frequently Asked Questions) form. Simply scroll to find the answers to the questions to help you make your decision to register your company in Thailand.
How to decide the type of company I should register in Thailand?
The process of company registration in Thailand stringently depends on various factors. Primary determinants are the type of business you want to do, and your investment potential. Most importantly, the industry you want to start your business in is one of the major determinants. This is because various government agencies offer privileges and hold schemes for businesses in their specific or target industries.
For example, suppose you plan to start a manufacturing or industrial company. In this case, you can avail benefits from the Industrial Estate Authority of Thailand (IEAT). Additionally, privileges from the Board of Investment (BOI) of Thailand are active for businesses in more than 20 industries. The benefits from such organizations cover a great range of tax and non-tax benefits. Such benefits ease the registration and continuity of businesses in Thailand both for Thai and foreign investors.
If you are a Thai business aspirant, starting small as a sole proprietorship firm is always wise. However, if your business model, investment capacity, and liability patterns compel you to a higher level, you may go for a Limited Liability Company or LLC structure.
For foreign investors, there are various types of business structures available. However, in most cases, you must have a Thai partner as one of the co-owners of the company. If you already own a company and want its presence in Thailand, you can go for a Branch or Representative office. To start from scratch, opt for a private or public limited company in Thailand. Note that you will need Thai partners in both of these cases. But, if your business gets eligible for IEAT or BOI Thailand promotions, this mandate fades away. A Foreign Business License in Thailand also facilitates a foreign investor to hold the majority of shares.
What are the restrictions for foreigners in registering a company in Thailand?
The primary restriction for foreign investors is that they cannot start a sole proprietorship business in Thailand. Therefore, this calls for the primary requirement of having a Thai shareholder in the business. Additionally, there are restrictions laid by the Foreign Business Act of Thailand that prevent foreign investors from doing business in certain specific industries.
However, such restrictions never prevent a foreigner from doing business in those industries. All they have to do is apply for a foreign business license along with a Thai shareholder. Henceforth, they have the equivalent rights as that of a Thai citizen to register and operate any business in Thailand.
What is the Capital Requirement for Company Registration in Thailand?
The capital requirement for Company Registration in Thailand, the major governing factors are as follows:
- Type of company you want to register in Thailand – LLP, LLC, Joint Venture, Branch Office, or Representative Office.
- Number of partners or shareholders in the business.
- Number of foreign employees you want to bring to Thailand.
- Your Nationality! It is because if there exists any double-tax or bilateral trade treaty between your nation and Thailand, you may get some investment benefits.
Based on these primary pointers, you can calculate the capital requirement for Company Registration in Thailand. To reach the exact figures, you must consult with a corporate law firm with special expertise in Thai accounting and tax standards and protocols.
Please note that the Capital Requirement for Company Registration is not the same as the cost to register a company in Thailand.
Capital Requirement is the funds that you need to be ready with as per the regulatory and authority norms. Furthermore, it depends upon the type of business you want to do in Thailand. On the other hand, the cost of registering your company in Thailand involves the expenses behind the capital requirement along with the cost of leasing or purchasing business premises, license fees, consultation and travel expenses, etc. We can help you identify the difference in these figures. Simply email us at [email protected] with your company registration plans in Thailand.
How to expand existing business in Thailand?
If you already own a business in your native country or anywhere in the world, you can easily expand its branches in Thailand. There are various methods to do so. The easiest forms that enable a foreign investor to have 100% foreign ownership in their business in Thailand are as follows:
The first option is opening a Representative Office in Thailand. It grants 100% foreign ownership and the cost of incorporation of such a company is lesser than other business forms. However, there is a restriction! You cannot conduct any financial transactions like selling products or services through a representative office.
Secondly, you can start a branch office in Thailand. Through a branch office, you can execute trading activities. However, there is an initial permission to operate for 5 years that is subject to extension, under the discretion of the Department of Business Development in Thailand.
Other methods of introducing your business in Thailand are through a Regional Office, or by online promotions.
How much time it takes to register a company in Thailand?
Again this depends on the type of company structure you are planning to register in Thailand. A simple limited company registration can be completed within 5-7 working days, whereas, a higher form of business structure can take up to 60 days to register.
Furthermore, registration of non-profits, foundations, or associations can take more than a year to complete and start functioning in Thailand. Additionally, this tenure also depends upon the level of your readiness with funds and regulatory compliance at the time of registering your company in Thailand.
What are the most important factors to keep in mind during Company Registration in Thailand?
You are a business aspirant, therefore, explaining to you to be careful about documentation, truthfulness or other similar stuff won’t make any sense. That’s what we believe in owning to the faith in your potential.
As a leading corporate law firm in Thailand, we take it to be our pleasure to guide you through the mistakes that we have seen many foreign investors make. So with the wish that you don’t repeat the same, we are listing the same as follows:
- Never think of opting for a Nominee Shareholding structure for your business in Thailand. It is strictly forbidden as per Section 35 of the Foreign Business Act and can attract imprisonment of up to 3 years and/or a penalty of up to 1 million Thai Baht.
- Never think of concealing or falsifying your identity for company registration in Thailand as this can lead to grave legal and administrative sentences.
- During the running of your business in Thailand, if your foreign business license gets suspended or revoked for any reason, stop using it immediately. Otherwise, you will be sentenced to imprisonment and a penalty worth up to 1 million Thai Baht.
- If you hold a valid foreign business license for a particular business, but participate in a business activity under another license permitted to carry different trade, it is illegal. You may attract a penalty of up to 1 million Thai Baht and imprisonment of up to 3 years.
- A penalty of up to 1 million Thai Baht and imprisonment of up to 3 years is applicable if you plan to operate a business in Thailand without a proper foreign business license.
- In many cases, there are various business operations or activities that are open only to Thai nationals. However, you may be involved in those businesses with prior approval from the Director-General or Ministry of Commerce. Without this approval, starting or operating any such business is a big offense in Thailand attracting penalties and imprisonment.
Therefore, we always advise our clients to follow Thai regulations and protocols while registering and operating a business in Thailand. There are various advantages of doing business in Thailand, and the kingdom welcomes foreign investors with open arms, but, the laws are pretty stringent here.
To access all solutions under one roof, reach out to us. Along with holding an identity as a leading corporate law firm in Thailand, we have professionals holding expertise in accounting, taxation, and payroll services for foreign investors in Thailand.
Email us your business plan at [email protected] and our team will get in touch with you within a working day.
