How to Start a Business in Thailand

Starting a business in Thailand as a foreigner isn’t as simple as it sounds. The rules are strict regarding foreign ownership, and the risks are often unclear. If you’re a foreigner planning to start a business in Thailand, one mistake during the registration and startup process can set you back for months or shut your plans to open a business in Thailand down completely.

This guide walks you through the basics of how to start a business in Thailand. You’ll learn how businesses are set up, the kinds of companies you can open, and what to expect as a foreigner in Thailand. But don’t treat this like a DIY checklist; the process is complex, and everything is done in the Thai language. Use this guide to understand what you’re getting into and why expert legal assistance is essential.

Choosing the Right Kind of Business to Open in Thailand

Before you start anything, you need to choose the right business structure. Each type of business in Thailand has different rules for ownership, liability, and control. If you’re a foreigner looking to start a company in Thailand, this choice will have a significant impact on how you do business in Thailand.

Here are the main types of businesses you can register:

• Thai Limited Company
  Most foreigners choose this. It requires at least two shareholders and offers limited liability. It requires majority Thai ownership, but it’s easiest to start and you can still get a controlling share.
• Thai Partnership
  Two or more people share ownership and management. Although depending on the type, managing partners may face personal liability for the partnership’s obligations.
• Representative Office
  Used by overseas companies to handle non-revenue tasks like sourcing or research. It cannot generate income on behalf of the parent company, and all its funding needs to come from the head office.
• Branch Office
  This type of company lets a foreign company operate in Thailand under its own name. It can earn revenue but remains legally tied to its head office abroad, and additional licenses may be required to comply with the Foreign Business Act.
• Regional Office
  Supports other branches in the region with management and coordination. Like a representative office, it is not allowed to earn income in Thailand.

Certain international agreements might give you special rights depending on your nationality, which can enable you to fully own a business in Thailand:

• US-Thai Treaty of Amity
  If you’re a U.S. citizen, this treaty may let you own a majority of your Thai business.
• Thailand-Australia Free Trade Agreement (TAFTA)
  If you’re Australian, TAFTA works similarly to the US Treaty, but applies to fewer kinds of businesses.

Starting a Business in Thailand: Step by Step

Every step in the Thai business registration process requires precise documentation, approvals, and signatures. If you skip something or make a mistake, your registration will be denied. Here’s a general look at how businesses get set up in Thailand.

1. Choose your business structure
   Decide if you’re opening a limited company, branch, or another type. Foreign ownership rules apply.
2. Reserve your company name
   Submit your desired company name to the Department of Business Development (DBD). It must follow specific naming rules and include “Company Limited.”
3. Prepare your documents
   You’ll need a Memorandum of Association, shareholder details, and a statutory meeting to approve the setup.
4. Register the company at the DBD
   File all paperwork with the DBD. Until this is complete, your company doesn’t legally exist.
5. Apply for VAT registration
   If your revenue is expected to exceed 1.8 million THB annually or if you plan on sponsoring a working visa and work permit for expats, register for VAT.
6. Apply for a Foreign Business License (if required)
   If you want your business to be majority foreign-owned, it must be in an approved industry and you’ll need permission under the Foreign Business Act.
7. Apply for BOI promotion (optional)
   If your business qualifies, BOI benefits can give you perks and incentives such as tax breaks and allow 100% foreign ownership.

Things to Consider When Starting a Company in Thailand as a Foreigner

Setting up a company is only part of the process. As a foreigner, you’ll face extra requirements that locals don’t. Missing any of these can lead to your application getting rejected, your business getting shut down, or even get you into legal trouble.

1. Getting the right visa
   You can’t legally run a company in Thailand on a tourist visa. To work for or manage a company, you’ll need an appropriate visa, such as the Thai Business Visa. This must be arranged before applying for a work permit.
2. Getting a work permit
   You must have a Thai Work Permit to legally work in Thailand. Even as a company director, you’re not exempt. The company also needs to meet capital and employment requirements to support your permit.
3. Foreign ownership limits
   Thai law limits foreign ownership of many business activities. If you want to exceed the 49% cap, you’ll need approval under the Foreign Business Act or apply for BOI promotion.
4. Buying land for your business
   Foreigners generally can’t own land in Thailand. You may consider leasing property long-term or securing BOI promotion, which enables your company to own the land. Learn more about Thai land ownership rules here.
5. Understanding corporate tax
   Thailand’s corporate tax rules cover many different kinds of taxes, including income tax and VAT. Your company must also withhold taxes on employee salaries and issue yearly financial statements.

Why You Shouldn’t Start a Business in Thailand Without Legal Help

Thailand has unique business opportunities and lucrative markets, but the rules aren’t built for trial and error. Foreign ownership limits, licensing rules, and tax obligations can stop your company before it even starts. A single misstep could derail your business or result in legal consequences.

To ensure your company has a smooth start and can get to market fast, you need someone who understands the system by your side. Having the experienced corporate legal team at Siam Legal by your side ensures that your business will not only be fully compliant but also enjoy every advantage and incentive possible to maximize profits.

Siam Legal has helped thousands of foreigners start businesses legally and correctly. Partner with us and we’ll manage every part of the process, from filings to visas, so nothing slips through the cracks and the risk of delay is minimal.

Fixing mistakes later costs more than doing it right the first time. So, if you’re serious about doing business in Thailand, contact Siam Legal today before you register anything. 

How to Start a Business in Thailand: FAQ

How long does company registration take?

If you’re setting up a Thai Limited Company, it usually takes 3 to 5 weeks after preparing the paperwork. Companies applying for BOI promotion or requiring a Foreign Business License may take significantly longer to register. These can run up to 120 days, depending on approval stages.

How many shareholders do you need to open a Thai company?

You must have at least two shareholders to register a Thai Limited Company. These can be a mix of foreign and Thai nationals. If your business has foreign ownership over 49%, extra licensing is required under the Foreign Business Act.

Can your company own land in Thailand?

Foreigners cannot directly own land in Thailand. Your company may lease land or hold it through a Thai-majority structure. If you qualify for BOI promotion, you might receive permission to own land depending on the nature of your business. 

Do you need a Thai partner to open a business?

Not always. If your business is BOI-promoted or falls under a treaty like the US-Thailand Treaty of Amity, you don’t need a Thai partner. Otherwise, Thai law usually requires Thai nationals to hold at least 51% of shares in restricted businesses.

Can you own 100% of a business in Thailand as a foreigner?

Yes, but only if your company qualifies under a special agreement or gets BOI promotion. The US-Thai Treaty of Amity applies to Americans, and Australians may qualify under TAFTA. Without access to these options, your ownership is usually capped at 49% for most industries.

Are there industries that foreigners can’t open a business in?

Yes. Thai law restricts foreign ownership in sectors like media, agriculture, and certain services. To work in these, you’ll need a Foreign Business License or BOI approval. Some sectors are off-limits completely if they fall under list 1 of the Foreign Business Act.

Tags: business in thailand, company registration, doing business in thailand, how to open business in thailand, opening a business in thailand, partnership in thailand, start business in thailand, starting a business in thailand as a foreigner, Thai Company Limited

Category: Business in Thailand, Company Law, Company Registration