Set Up a Company in Thailand

The Thai Limited Company is the most popular and appealing form of business organization among foreigners doing business in Thailand due to its flexibility. This type of business entity is most utilized in Thailand. This entity is similar to that of a Limited Liability Company (LLC) in the United States or Private Limited (Pte. Ltd.) in Singapore.

You can set up a Thai Limited Company with only a few thousand Baht. However, the average declared capital is 1M THB.

Even if the foreigner funded the business, the foreigner needs to secure a work permit if he intends to personally engage in the business. A company can obtain the relevant visa and work permit for its foreign director or foreign employee, provided it has been accordingly set-up. The company must employ a minimum number of Thai nationals for each foreigner employed.

A Thai limited company has to consist of 1 or more directors and a minimum of 3 shareholders. They can either be Thai or foreigner.

In Thai Limited Company shareholding, Thais must own the majority company shares. This means that foreign ownership of the company cannot be more than 49%.

Foreigners can hold 100% ownership of businesses in non-restricted categories, such as exporting businesses and certain types of manufacturing businesses. Other methods to obtain 100% non-Thai control are through application for an alien business license, Board of Investment (BOI) Promotion or registration through the Treaty of Amity for Americans.

Every company registered in Thailand are required to pay corporate income tax on the profits they have earned from doing business within and outside Thailand. These companies include juristic companies and partnerships (including registered partnerships, limited partnerships, or unincorporated joint ventures). Branch offices, which are considered extensions of an overseas headquarters, are also subject to corporate income tax on revenues they have earned within Thailand.

Companies are required to pay corporate income tax, which is imposed for doing business in Thailand or for generating income from business activities conducted in Thailand.

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  Value added tax (VAT) is imposed for businesses involved in goods and services, either supplied in or imported into Thailand.
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  Some types of businesses, such as those in banking and finance, real estate, or life insurance, are required to pay a special business tax, as these businesses aren’t covered by the VAT system.
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  Those in the business of importing and exporting goods specified in the Customs Tariff statute (such as rice, leather, and rubber) are imposed with a customs duty tax.
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  Stamp duty tax, on the other hand, is imposed on articles or instruments that are under the Stamp Duty Schedule of the Revenue Code, which may include bills of exchange, promissory notes, and letters of credit.
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  Municipal tax is also included when paying specific business tax and VAT.

Extension of work permit for BOI-supported businesses requires the following documents:

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  Accomplished form (The Information For Work Permit Issuance According to Section 12 of the Working of Aliens Act, B.E. 2551);
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  Passport copy or Alien Identification Card/Alien’s Certificate of Permanent Residence;
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  Department of Business Development-issued Company’s Affidavit/Certificate of Incorporation; and
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  Letters from the BOI and IEAT certifying applicant’s work approval.

The work permit allows the employee to work under the location of the registered company, not specifying definite area. For example, the location of the head office and the branch office are in Bangkok and Chiang Mai respectively, the employee can work in Bangkok and Chiang Mai.

BOI license is not reserved for Thai company only. In the case that the foreign juristic company can meet the criteria set by BOI, the juristic person is also entitled to receive the license.

Under US Amity Treaty, American or American company has the right to obtain protection to operate almost every kinds of the businesses except as follow:

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  Transportation
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  Logistics
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  Taking care of property for the benefit of others
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  Banking about the money deposit
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  The exploitation of land or other natural resources
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  Internal trade on local agricultural products.

At least 1 local director is needed when applying for the Foreign Business License.

Starting a business in Thailand may become complicated due to language barriers. All the legal documents are in Thai script. Completing these forms without the knowledge of its contents as well as the Thai Law can lead to serious complications. This may then have a vast effect on you and your business. Furthermore, it may also take several days to weeks to complete the entire process. Therefore, it is essential to look for trusted lawyers and advisors with legal qualifications and practical experiences. They can give you an extensive guide and advice on how to structure your company.