Steps for Company Registration in Thailand
Thailand is amongst one of the most attractive countries in the region for foreigners to set up a business due to its strategic location in Southeast Asia, the growing economy, and the system that supports foreign investment. If you are an entrepreneur who wishes to grow your business in the Kingdom of Thailand, here is the overview of the necessary steps for company registration to get started on your journey.
Before going through the steps, it is recommended for foreigners to explore the list of restricted business activities that are reserved for Thai nationals stated in the Foreign Business Act 1999. Additionally, if your business falls under certain criteria, you will be able to apply for incentives from the Thailand Board of Investment (BOI), such as years of corporate income tax exemption and 100% foreign ownership.
There are 2 cases of company registration in Thailand with foreigners as shareholders.
- A company with foreigners holding a maximum of 49% of the shares. In this case, the company is considered a Thai company and can perform any type of business activities under Thai law.
- A company with foreigners holding 100% or over 49% of the shares. In this case, the company is considered a foreign company and must apply for a Foreign Business License or BOI incentive program which are both more complex and take a longer time to process.
The most common incorporation is the Thai private limited company. To form this type of company, there must be at least 3 shareholders and the company must be registered as a juristic person. As the name implies, the shareholders’ liabilities are “limited” meaning the shareholders are only liable for the unpaid amount of the shares registered. Hence, this type of company has advantages in terms of establishing credibility and fundraising compared to other types of incorporation.
Here are the steps to register a private limited company in Thailand.
Step 1: Reserve the Company Name
The first step is to reserve a company name that must be distinct from other companies registered in the system. The promoters (founders) can reserve up to 3 alternative names in which the most appropriate name based on the regulation will be considered and approved by the registrar. The promoters can either submit the name reservation form at the Department of Business Development (DBD) or reserve online via DBD’s website (https://www.dbd.go.th/dbdweb_en/).
The approval process can take up to 1-3 business days. Once approved, the reserved name is only valid for 30 days without extension.
Step 2: File a Memorandum of Association (MOA)
The Memorandum of Association declares the intention of the promoters to form a company and must include the following information:
- Approved company name
- Location of headquarter (the province where the headquarter is located)
- Objectives of the company
- Capital to be registered, number of shares, and their par value
- Name, address, age, occupation, and number of shares of each of the 3 shareholders
- Name, address, and age of 2 witnesses
The fee for MOA registration is 50 Baht per 100,000 Baht of registered capital with a minimum fee of 500 Baht and a maximum fee of 25,000 Baht.
Step 3: Organize a Statutory Meeting and Purchasing of Shares
The Statutory Meeting is called to determine the following:
- Approval of the Articles of Association (company’s regulations)
- Appointment of the company’s Board of Directors and the fixing of their authorities
- Appointment of an auditor to audit and certify the company’s financial statements
- Approval of the amount to be paid to the promoters, if any
- Arrangement of the number of ordinary shares and preference shares (if any) to be allocated as fully or partly paid-up and the amount to be considered as paid-up
The shareholders and promoters can be different persons and each shareholder must hold at least 1 share. The number of shares is unlimited; however, each share must be of equal value and worth at least 5 Baht per share. Once the share structure is defined, the share certificates must be issued under the shareholders’ names.
After the meeting is held with the majority of the voters supporting the resolutions, the promoters must transfer all business to the appointed Directors. The Directors shall then call for at least 25% of the share value to be paid up.
Step 4: Company Registration
Within 3 months after the Statutory Meeting, the application for the company registration must be submitted to the DBD Office.
For a private limited company, the registration fee is 500 Baht per 100,000 Baht of registered capital with a minimum fee of 5,000 Baht and a maximum fee of 250,000 Baht.
Once registered, the company registration certificate and the company affidavit will be issued. These certificates prove the company’s status as a registered juristic person under Thai law and can perform activities according to the objectives submitted.
Step 5: Tax Registration
The company can simply use the juristic person registration number issued by DBD as its Tax ID. In terms of VAT, the registration is only compulsory once the company’s turnover exceeds 1.8 million Baht and shall be registered within 30 days from the date the threshold is surpassed.
Important Points to Note
- In case there is a foreign shareholder or a foreign authorized Director, all of the Thai shareholders shall submit at least one of these documents:
- Bank statements or copies of bank books disclosing at least 6 months of transactions
- Letters issued by the bank certifying the financial status of the shareholders
- Copies of the evidence of the source of funds
- In case the registered capital is over 5 million Baht, an additional document issued by the bank is required to certify that the company’s Director has received the paid-up capital.
- To prove the existence of the headquarter, the registration documents must also include a map, copy of house registration, permission from the owner to use the location (if the owner is a juristic person, there must also be a copy of the company affidavit and a copy of the authorized Director’s ID.)
- For a company that plans to apply for work permits for its employees, the minimum registered capital would be 2 million Baht per one foreign employee.
To save time and lessen your worry, we are here to assist you in every step. Contact us for more information.
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.