Company Registration or Incorporation in Thailand for foreign nationals wanting to start a business.
Thailand offers great business potential for foreign investors to invest due to its strategic and dynamic location, its steady economic growth, strong export capability, abundance of natural resources, and a dynamic consumer market make the kingdom of Thailand a great choice for foreigners to conduct business. The Foreign Business Act (FBA) governs the formation of foreign companies, Thailand company registration, and business operations of foreigners.
A number of business structures are available to foreign nationals, including the most popular which is a Thai Limited Company. The process to register a company in Thailand depends largely on the company structure you select. Incorporation usually takes between 1 to 2 weeks for a simple Thai Limited Liability Company to as much as 90 days for a more complex BOI Company.
Obtaining a foreign business license, registering a business, understanding the Thai civil and commercial code, and opening a company in Thailand can be a difficult, daunting and challenging situation for those who are unfamiliar with Thai law and its legalities.
This is where we at Anglosiam Laegal International can help. We have a wide-ranging practice and extensive Company and Commercial experience in handling complex corporate matters for international clients, we have been setting up a companies in Thailand since 2006.
One of the most common types of company structures used by foreign nationals in Thailand is a Thai Limited Company. This type of business structure is simple and the business itself can engage in a wide range of activities or services within the kingdom.
This type of company has its registered capital divided into equal shares and the liability of each shareholder is limited to the amount on the shares held.
When registering a Thai Limited Company, its company owners (Investors) together with third parties have to provide a clear picture and understanding of the business to the Department of Business Development (DBD)
Registering a limited company will allow examination of the company profile and status, financial state, shareholders list, directors, and more. This once verified makes the company more credible to Banks, Investors, shareholders etc.
A Thai company is a separate legal entity in its own right. Many companies have been going for decades, some for a shorter period of time. The company will continue to operate and will need to fulfill all of its legal obligations until such times as it is dissolved by its owners. A good accountant will assist with these matters. That is why we have our own in-house Accountants. Remember the day to day management is the responsibility of the company directors.
In order to set up a Thai Limited Company the following Information and steps will be required.
STEP 1: COMPANY NAME RESERVATION
The name reservation guidelines provided by the Department of Business Development (DBD) in the Ministry of Commerce, should be observed in reserving any company name. We usually ask our clients to provide at least 2-3 company names we can reserve in case it is already taken or the name cannot be used.
STEP 2: IDENTIFYING THE SHAREHOLDERS, AND DIRECTORS
In order to set up a Thai Limited Company, you will need to have at least three (3) shareholders, and one (1) director in order to register and set up the company.
Where the company is set up with only Thai shareholders no financial statements are required to be shown. However, where there is a mix of Thai and Foreign shareholders a Thai bank statement for the Thai shareholders will be required to prove that they have an amount equal to or greater than the cost of the shares they hold.
Identification documents for all parties are required together with proof of address for Thai Nationals. The status, occupation and contact details for all parties will also be required.
STEP 3: FILING OF MEMORANDUM OF ASSOCIATION
A Memorandum of Association (MOA) must be filed with the (DBD) in the Ministry of Commerce. This must include the name of the company that has been reserved, the province where the company will be located for example Isaan,Chon Buri etc. Its business objectives, the registered capital, the names of the shareholders and directors.
Should you plan to hire a foreign national within the company then a minimum registered capital of Two Million Thai Baht (2,000,000THB) is required per foreigner in order to have granted a Non-Immigrant “B” Visa and a Work Permit.
STEP 4: CONVENE A STATUTORY MEETING
A legality is to convene a meeting to make all appointments. Once the share structure for the company has been identified, agreed and defined, the Memorandum of Association and the Articles of Association are approved, the directors will be elected and appointed as is an auditor.
STEP 5: REGISTRATION
The Company Directors (one or more) must submit an application to establish the company within 3-months of the date of the Statutory Meeting above, together with the relevant Governmental fees of baht 5500 per 1 million of registered capital.
STEP 6: CORPORATE INCOME TAX REGISTRATION
All registered companies in Thailand must be registered for tax purposes. All Businesses liable to pay Corporate Income Tax (CIT) must obtain a Tax I.D card together with a registration number for the company. These are obtained from the Thailand Revenue Department and must be completed within 60 days of incorporation or the start of business operations. Any Business operators liable for Value Added Tax (VAT) must also in addition register for a VAT I.D within 30 days of the date they reach 600,000 THB in sales.
STEP 7: OPENING A COMPANY BANK ACCOUNT
Registered Companies in Thailand can open a corporate bank account. They can also make use of internet banking.
It is Important to agree to open a company bank account with a well-established bank based in the locality of where the company is to operate from. You should decide what type of account is required, who from the company will deal and sign for banking and other matters. Before opening a bank account, a statutory meeting needs to be held in the previous 7 days.
Number of Promoters and Shareholders
Shareholders are required to perform the registration process to set up a private limited company. There can be no less than 3 shareholders. There is however no upper limit. It is worthy of note that the maximum shareholding of a foreign national is limited to 49% with Thai shareholders owning 51% (unless a relevant treaty is utilised) It is therefor Important to have a lawyer set up the company with preferential voting rights to safeguard your interests and to remain in control.
Effects of Registration
As soon as the company is registered it will receive a 13-digit reference number. The company will be legally recognised as a separate business entity, which is independent of its shareholders. This is known as a “juristic person” or “separate legal entity”. The company has its own rights, liabilities and duties which are different from those of its shareholders. Thus, agreements or commitments made between the company and any other third parties merely bind the company. Shareholders are not held responsible to third parties. For example, a company creditor is not able to sue shareholders for debt repayment.
Memorandum of Association
This is one of the most important documents used within the company Incorporation process. It will specify the name and address of the company. Its business objectives the company capital. The number of shares and their value. Names of at least 3 company shareholders
Articles of Association
This document is again important and specifies agreements or policies with regards company shareholders and their relationship, shareholders’ rights and the company standard operating policies (SOP) for carrying out business activities. It will also include information with regards to shares and shareholders, directors, meetings, reserves, dividends and so forth.
The Thai Company is legally required to prepare its financial statement each month and at least one auditor shall audit the statements every year.
A shareholder’s meeting must be called in order to approve the financial statement within 4 months from the Company’s financial year-end (31st December yearly) and must then submit the financial statement to the (DBD) within 1 month from the date of when the financial statements were approved.
For example. The year ends on the 31st of December. A meeting must be called to approve the financial documents by the end of the following April thereafter by the end of May the statements must be submitted to the DBD, late submissions attract financial penalties monthly and can lead to court action.
The director must prepare a list of all shareholders at the time of the annual shareholders’ meeting and a list of those no longer shareholders from the date of the last shareholders’ meeting and submit the lists to the DBD, within 14 days of the date of that meeting.
The annual shareholders meeting must be held within 6 months from the Company’s registration date. Subsequent company meetings must be held at least every 12 months. There are many other administrative obligations such as the preparation of Share certificates for shareholders. A shareholders registration book must also be prepared and kept.
Since 2006 Anglosiam Laegal has been advising foreign clients, individuals or companies, on how to open bank accounts that best suit their needs. Leading banks are those such as but not limited to Bangkok bank,Siam Commercial bank, Kasokorn Thai, Krung Thai etc.
Anglosiam Laegal, is here to ensure that our clients get the very best advice. We want to protect your needs and assets together with your legal responsibilities and duties. Ask us for more information with regards to our accounting services.
At Anglosiam Laegal International, Due to our incorporation in 2006 we have extensive experience and expertise to help you with your Company Incorporation in Thailand.
We have the knowledge and experience and the business solutions for your company Incorporation and to keep it legal, regulated and compliant.
Over the years we have had set up and Incorporated hundreds of companies in every province in Thailand, many of which we still work with today.
Our Corporate lawyers at Anglosiam Laegal will guide you through the Thai company Incorporation process from start to finish. They will ensure the company complies with legalities within the registration process and beyond.