How to Start a Business in Thailand
If you want to start a business in Thailand, you can set up your business in a number of ways. If you have an international business, you may wish to set up a Thai branch office, Thai representative office or Thai regional office to take advantage of local business opportunities and possible tax advantages.
Sole Proprietorship in Thailand
Although foreigners are generally prohibited from conducting business in Thailand as a sole proprietor, US citizens who register with the Thai Department of Business Development under the US – Thailand Amity Treaty are allowed to run a sole proprietorship in most industries. Siam Legal provides the legal services you need to register a sole proprietorship under the Amity Treaty.
Thai Partnerships
Thai Partnerships can be registered with the Commercial Registration Office. The registration fee is assessed as 1% of registered capital and ranges from 1,000 – 5,000 THB.
Ordinary Partnership
Ordinary partnerships in Thailand establish a business with a minimum of two owners. Ordinary partnerships are not required to register with the Commercial Registration Office, but often do if they wish to be taxed as a juristic person. Registered ordinary partnerships are required to issue an annual financial statement and pay corporate income taxes. Otherwise, income must be reported on the partner’s individual tax returns.
Thai Limited Liabilty Partnership (LLP)
A Thai LLP is a partnership with two types of partners. General Partners are allowed to manage the business, and are fully liable for the partnerships financial obligations. Limited Partners are not allowed to manage the business, but their liability is limited to the amount of capital they contributed to the LLP. Thai LLPs must be registered at the Commercial Registration Office and are taxed as corporate entities (juristic persons). LLPs must make a financial statement every 12 months.
Thai Limited Companies
Limited Companies are the basic Thai corporate structure. They are governed by the Thai Civil and Commercial Code. Private Limited Companies are not eligible for public stock offerings but may be converted to Public Limited Companies if they wish to offer stock publicly. Every Private Limited Company must register their Memorandum of Association (similar to Articles of Incorporation) and Articles of Association (similar to by-laws).
Thai law requires at least 3 shareholders at all times. Shareholder liability is limited to the unpaid amount of their shares’ par value. All shares must be subscribed to at the time of incorporation, but only 25% of shares must be paid up. The minimum share price is 5 THB. Some shares may have preferential voting power, but every share must have at least one vote. If foreigners own more than 49% of the shares, the company is subject to the restrictions of the Alien Business Act.
Limited companies must follow strict financial requirements. Annual financial statements must be certified by an auditor, approved by the shareholders, and filed with the Commercial Registration Department and the Revenue Department. Small limited companies may be exempt from this requirement.
A company must have three promoters before it can be registered. Each promoter must have at least one share in the company and be at least twenty years of age, but do not have to be Thai citizens. Siam Legal provides the legal services you need to register a private limited company and apply for a tax ID card from the Revenue Department, and a Value Added Tax Certificate if needed.
Category: Business in Thailand, Company Law, Company Registration
About the Author (Author Profile)
Siam Legal is an international law firm with experienced lawyers, attorneys, and solicitors both in Thailand law and international law. This Thailand law firm offers comprehensive legal services in Thailand to both local and foreign clients for Litigation such as civil & criminal cases, labor disputes, commercial cases, divorce, adoption, extradition, fraud, and drug cases. Other legal expertise of the law firm varied in cases involving corporate law such as company registration & Thailand BOI, family law, property law, and private investigation.
