Thai Limited Company Incorporation.
Let Isaan lawyers International set up and have Incorporated your Thai Limited Company.
Thailand offers great business potential for foreign investors and Expats alike 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 Thai Limited Company and business structures are available to Expats, foreign nationals, and Thai, including the most popular which is the incorporation of 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.
The 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 Isaan lawyers International can help and assist from start to finish.
We have a commercial 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 Thai 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 limited 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: THAI LIMITED COMPANY NAME RESERVATION
The name reservation guidelines provided by the Department of Business Development (DBD) and or by the Ministry of Commerce should be observed in reserving any Thai Limited 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 FOR THE THAI LIMITED COMPANY
In order to set up a Thai Limited Company, you will need to have at least two (2) shareholders, and one (1) director in order to register and set up the company. The requirement was previously for three shareholders but this law changed for all companies incorporating after the 7th of February 2023.
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/expat 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. This will be examined and can be investigated further to identify the source of the assets.
Identification documents for all parties are required, such as passports, ID cards etc together with proof of address for Thai Nationals, house book or tabien baan. The status, occupation and contact details for all parties will also be required.
STEP 3: THAI LIMITED COMPANY 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 proposed Thai limited company that has been reserved, the province where the company will be located for example Isaan, Pattaya, Bangkok etc. Its company business objectives, the registered capital it is to have, together with the names of the shareholders and directors.
If you plan to hire a foreign national or expat within the Thai limited 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. You will also require to have the required number of Thai staff registered and having SSO benefits within the company. If you are married to a Thai you require 2 employees, if you are not married to a Thai you will require four employees for a overseas work permit.
STEP 4: CONVENE A STATUTORY MEETING
You are legally required to convene a meeting to make all appointments such as directors etc. Once the share structure for the Thai limited company has been identified, agreed upon 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: THAI LIMITED COMPANY 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 1,000,000 of registered capital.
STEP 6: CORPORATE INCOME TAX REGISTRATION FOR A THAI LIMITED COMPANY
All registered Thai Limited 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 thai limited companies that are liable for Value Added Tax (VAT) must in addition register for a VAT I.D within 30 days of the date they reach 600,000 THB or more in sales.
STEP 7: OPENING A COMPANY BANK ACCOUNT FOR YOUR THAI LIMITED COMPANY
Registered Thai Limited Companies in Thailand can open a corporate bank account. They can also make use of internet banking. The company documents will be required by the bank for account opening purposes as will the company stamp and directors identification documents.
It is Important to agree to open a company bank account for your Thai Limited Company with a well-established bank based in the locality of where the company is to operate from.
Before opening a bank account, a statutory meeting needs to be held in the previous 7 days.
Number of Promoters and Shareholders
registered shareholders are required to perform the registration process to set up a private limited company. There can be no less than 2 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 such as the treaty of Amity for US citizens) It is most Important to have an experienced law firm set up the Thai limited company with preferential voting rights to safeguard your interests and to remain in control.
Effects of Registration
As soon as the Thai limited 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. The 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 Thai Limited company Incorporation process. It will specify the name and address of the Thai limited company. The business objectives the company. The capital it holds. The number of shares and their value. Names of at least 2 company shareholders, again the minimum requirement of shareholders used to be a minimum of three but changed to two on the 7th of february 2023.
Articles of Association
This is another important document which specifies agreements or policies with regards to the Thai limited company shareholders and their relationship, shareholders’ rights and the Thai limited 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.
Reporting Requirements for Thai Limited Companies
The Thai limited Company is legally required to prepare its financial statement each month and at least one auditor shall audit the statements every year. This takes place around spring each year. At Isaan lawyers International we have inhouse accountants to assist with these matter for the Thai limited company you set up.
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 clarity and by way of an example. The company 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 of around 2000 baht per month and can lead to court action.
The Thai limited company 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 Thai limited Company registration date. Subsequent company meetings must be held at least every 12 months.
Since 2006 Isaan lawyers International have 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.
Isaan lawyers international, 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 Isaan lawyers 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 Isaan lawyers International will guide you through the Thai Limited company Incorporation process from start to finish. They will ensure the company complies with legalities within the registration process and beyond.
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