How to Register a Company in Thailand
Under Thai laws, companies are classified as follows:
- Thai Partnership
- Thai Limited Company
Thai Partnership, is just like any other partnership which may either be ordinary or limited. A limited company in Thailand is one which is formed by dividing the capital into equal share, and the liability of the shareholders is limited to the amount of shares respectively held by them.
A Thai Limited Company, particularly a Private Thai Limited Company, is the most popular form of business structure in Thailand. Its key features are:
- It is owned by a minimum of three shareholders.
- The liability of each of the shareholders is limited to the par value of their shares.
- Shareholders’ participation in the company is limited as the directors are managing company affairs.
Steps on How to Register a Thai Company
Step 1: Registering the Company Name
The first step in setting up a company in Thailand is to reserve your company name. The name must not be the same name or resembles the name of any existing registered company in Thailand. The company name must end with the word “Limited”.
Tip: It is recommended to reserve three names in order of your preference to make sure that you have a better chance of success. The name of your company will be registered in Thai language even if the company name is in English. Do not choose a company name that is lengthy or difficult for non-English speakers as this may cause any complication in the future such as mistakes in drafting a check etc. The name of your business may be different from the name of your registered company.
The reservation of the company name can be done online at the Department of Business Development (DBD) website. The application for name reservation is normally approved within 1-3 days. Once the company name has been approved, it is only valid for 30 days and no extension is permitted.
Step 2: Filing the Memorandum of Association
After registration with the Ministry of Commerce (MOC), the company can register its memorandum of association. At this point, all shares must be paid. To engage in foreign businesses, cabinet approval must be sought first.
The memorandum of association includes:
- The name of the proposed company
- The proposed registered office of the company in Thailand
- The company objectives
- A declaration that the liability of the shareholders will be limited
- The amount of share capital with which the company purposes to be registered and the divisions thereof into shares;
- The names, addresses, occupations and signatures of the promoters and the number of shares subscribed to by each of the promoters
Step 3: The Statutory Meeting
The company must also submit its by-laws and articles of incorporation which must be drafted in a statutory meeting. It is also during the said meeting that the board of directors and auditors of the company are appointed. Other business to be conducted at the statutory meeting includes:
- The adoption of the regulations of the company, if any;
- The ratification of any contracts entered into and any expenses incurred by the promoters in promoting the company;
- The fixing of the amount, if any, to be paid to the promoters;
- The fixing of the number of preference shares, if any;
- The fixing of the number of ordinary shares or preference shares to be allotted as fully or partly paid-up;
- The appointment of the first directors and auditors and the fixing of their respective powers.
Step 4: Register the Company in Thailand
The company registration must be lodged on the same day that the Memorandum of Association is registered at the Ministry of Commerce provided that the Statutory Meeting has already been convened. The application for registration must be submitted no later than 90 days from the date of the statutory meeting.
It is during this stage of the registration process that company registration fees are paid.
Step 5: Registering for Value-Added Tax (VAT) and Income Tax
After the company registration and within 60 days of incorporation or the commencement of operations, you will need to apply for and obtain a company corporate tax ID card from the Revenue Department.
Value Added Tax (VAT) has been implemented in Thailand since 1992. It is an indirect tax imposed on the value-added of each stage of production and distribution. Any business entity that regularly supplies goods or provides services in Thailand and has an annual turnover exceeding 1.8 million baht must register for VAT in Thailand. In addition, should you wish to obtain a work permit then you will need to immediately register your company for VAT.
While registering a company in Thailand is a bit complicated, nonetheless, Thailand is a great place to invest. It is advised that a Thai corporate lawyer be consulted in deciding what kind of company to put up.
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Frequently Asked Questions
What is the minimum registered capital requirement for the company?
Minimum registered capitalization of 2 million THB for foreign businesses operating non-restricted and 3 million THB for restricted businesses under the Foreign Business Act. Thai-owned companies are not subject to such requirements (but will need to meet financial requirements to support a work permit for foreign staff).
How long does the registration process take and when can I start operating my business?
The duration for registration depends on the nature of your business and your promptness in providing the requested information. A company can be set up in 1 – 2 weeks but the application of foreign business license can take at least 6 months depending on the business activity.
What are the ongoing obligations to maintain the business?
Once the business is registered, you will be required to submit withholding tax and VAT filings with the Revenue Department and pay social security contributions for your employees with the Social Security Office on a monthly basis. You will also need to ensure that proper bookkeeping records are maintained in order for an auditor to sign off on the financial reports which must be submitted to the Revenue Department and Department of Business Development annually. There are other obligations such as filing the half-year report, making payment for the employee’s compensation, submitting relevant reports to the authorities such as for companies promoted by the Board of Investment, and so forth. In the case of a foreigner holding a work permit and non-immigrant visa, these must also be renewed prior to the expiration dates.
How to open a bank account for the business?
Relative to the registration of a business entity in Thailand, it is imperative to open a company’s bank account to support its transactions and operations. It is fairly straightforward to open a corporate bank account with a local bank for your business once registered. The bank will require a set of minutes of the board meeting to approve the opening of the corporate account with details of the signing authority and requirements, along with the business registration documents and identification documents of the shareholders, directors, and authorized signatories to the bank account. You will also be required to fill out several forms at the bank when opening the corporate account. Do note that some banks require foreign directors to be holding a work permit and non-immigrant visa before they will permit the use of certain services such as online banking on the corporate account.
Category: 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.