Company Registration in Thailand

Company Registration in Thailand is a structured process overseen by the Department of Business Development (DBD) under the Ministry of Commerce. The country’s regulations aim to facilitate both local and foreign investments while ensuring compliance with legal requirements. Here’s a detailed breakdown of the company registration process, from choosing the right business structure to obtaining the necessary licenses.

1. Types of Business Structures in Thailand

1.1 Private Limited Company

• Most Common Structure: Ideal for small- to medium-sized businesses.
• Key Features:
  • Requires at least three shareholders.
  • Liability of shareholders is limited to their share contributions.
  • Minimum capital requirement varies based on business type (e.g., 2 million THB for businesses under the Foreign Business Act).

1.2 Public Limited Company

• Designed for Larger Businesses: Suitable for companies aiming to list on the Stock Exchange of Thailand (SET).
• Key Features:
  • Requires a minimum of 15 promoters.
  • Capital must be at least 5 million THB.

1.3 Partnership

• Ordinary Partnership: Partners share unlimited liability.
• Limited Partnership: At least one partner has unlimited liability, while others have limited liability based on their contributions.

1.4 Branch Office

• Allows foreign companies to operate in Thailand but is restricted to approved business activities.
• Requires registration with the Ministry of Commerce.

1.5 Representative Office

• Used for non-revenue-generating activities such as market research or liaison services.

2. Steps for Registering a Private Limited Company

Step 1: Name Reservation

• Submit three preferred company names to the DBD for approval.
• Names must not conflict with existing businesses and must comply with DBD naming rules.

Step 2: Draft the Memorandum of Association (MOA)

• Key details include:
  • Company name.
  • Objectives aligned with the law.
  • Registered office location.
  • Details of shareholders and shareholding proportions.

Step 3: Convene a Statutory Meeting

• Shareholders approve the company’s articles of association, appoint directors, and confirm share allotments.

Step 4: Register the Company

• File incorporation documents with the DBD, including:
  • Memorandum of Association.
  • Articles of Association.
  • List of shareholders (BOJ.5 form).
• Pay registration fees (approximately 5,500 THB per 1 million THB of registered capital).

Step 5: Tax and VAT Registration

• Obtain a corporate tax ID from the Revenue Department.
• Register for VAT if the annual turnover exceeds 1.8 million THB.

3. Foreign Ownership and Restrictions

3.1 Foreign Business Act (FBA)

• Limits foreign ownership to 49% in certain restricted sectors.
• A Foreign Business License (FBL) is required to exceed this limit unless the company qualifies for special incentives.

3.2 BOI Promotions

• The Board of Investment (BOI) offers incentives, including:
  • 100% foreign ownership in promoted sectors.
  • Tax holidays and import duty exemptions.

3.3 U.S.-Thailand Treaty of Amity

• Grants American investors the ability to own 100% of companies in most sectors, excluding industries like agriculture and land trading.

4. Licenses and Permits

Certain business activities require additional permits or licenses, including:

• Tourism Business License: For travel agencies.
• Food and Beverage License: For restaurants and bars.
• Construction License: For companies in the construction sector.

5. Costs and Timelines

1. Registration Fees:
   • Approximately 5,500 THB per 1 million THB of registered capital.
2. Timeline:
   • Name reservation: 1–3 business days.
   • Company registration: 5–7 business days.
   • Tax registration: 1–3 business days.

6. Responsibilities Post-Registration

1. Annual Financial Reporting:
   • Submit audited financial statements to the DBD and Revenue Department.
2. Tax Compliance:
   • File monthly VAT and withholding tax returns.
   • Annual corporate income tax filing is mandatory.
3. Employment Regulations:
   • Companies hiring foreigners must meet the Thai-to-foreigner employment ratio (typically 4:1).

Conclusion

Company registration in Thailand offers opportunities for both local and foreign entrepreneurs, provided they understand the legal framework and comply with regulations. Choosing the right business structure, adhering to ownership restrictions, and ensuring proper registration are essential for success. For complex processes, professional assistance from legal and business consultants is often invaluable.