9 Types of Business Entities in Thailand

1. Thai Limited Liability Company

Typically, it is governed by the Civil and Commercial Code, requiring at least 3 shareholders and 1 promoter. A Thai Limited Liability company can be fully foreign owned. In the majority of the cases, minimum 51% of the shares are held by the Thai citizens as several business activities are limited to the companies that are foreign-owned. At least 25% of the share capital must be paid up while registering the company.

2. Thai BOI Company

Investors, foreigners mainly, forming a business in Thailand can obtain promotion status from the BOI. Companies getting BOI approval are exempted from the requirement to have a foreign business license plus they are benefited from tax incentives that include a CIT holiday for up to 8 years, reduced customs duties on the imported raw material and tools. Also, they are permitted to bring skilled foreign employees in Thailand.

3. Amity Treaty LLC

This type of business entity can be 100% foreign owned, provided you are an American citizen. That means all the three shareholders can be US nationals. During the time of company formation, the initial shareholders should be ‘natural persons,’ as the company cannot be one of the founding shareholders. Amity approval enables companies to engage in almost all business activities that a Thai national is allowed to.

4. Thai Public Limited Company

Regularized by the Public Company Act, a Thai Public Limited Company requires at least 15 shareholders and 5 directors, amongst whom at least half of them must be Thai residents.

5. Branch Office

Any multinational can open a branch office in Thailand in order to complete a project that lasts for a maximum of 5 years. Also, a renewal of the license can be obtained, provided that the working capital need is met in Thailand. Most foreign investors prefer opening a branch office as they want to get a foreign business license that is renewable in every 5 years, derive VAT registration number, a commercial registration certificate and a taxpayer identification number.

Income derived from branch office activities is subjected to normal CIT in Thailand. But the company will not be taxed on income that is earned outside the country and is not related to the activities.

6. Representative Office

A Thai representative office can be 100% foreign owned, but it is not allowed to get involved in direct sales in Thailand. This type of business entity can only get engaged in promoting the parent company’s business, finding sources to buy goods and services in Thailand, control the quality as well as the quantity of goods purchased and market research. However, a representative office is not subjected to corporate tax, but must obtain a CIT identification number, submit audited financial statements and submit income tax returns.

7. Regional Operating Headquarter

Any foreign company can set up a regional office in Thailand in order to own or have a control over the subsidiaries in Asia. Activities that this entity is permitted to undertake typically include training and personal development in the Asian offices, marketing control and sales promotion planning, product development, research and development and consulting and management of operations throughout Asia.

In fact, a government-approved Regional Operating Headquarter gets a corporation tax rate of 10% on income that is received from the subsidiaries that include interest, management fees, royalties and intellectual property. Also, dividends from the overseas subsidiaries are exempted from tax in Thailand. Moreover, ROH employees pay income tax at a flat 15% rate. In order to enjoy all these benefits, an entity makes application for a foreign business license and investment promotion from the BOI.

8. Thailand Foundation

Foreigners can form a private and charitable foundation in Thailand. However, half of the amount should be paid in cash, whereas the other half can just be a contribution in kind.  According to Thailand regulations, the Thai foundation can be registered with minimum one owner and a Board of Directors comprising of at least one Thai resident. The majority of the foundations are handling a portfolio of assets while using the derived income for financing the projects related to the purpose of their creation. Any Thai charitable foundation is eligible to a CIT rate of 1%.

9. Thailand Limited Partnership

This entity requires one limited partner plus one general partner for registration. Even though 100% foreign ownership is possible, it is because of the restrictions on the foreign participation in a few business activities under the Foreign Business Act, Thai partners are required. A partnership in Thailand can be considered foreign if 50% shareholders are foreign nationals or the managing partner is alien.

If you want to open any of these business entities in Thailand, we are there for assistance. You can give us a call or write to us with your business requirement and budget. We will give you the ideal solution.