Register A Company In Thailand

Starting a business in Thailand can be a rewarding yet an overwhelming experience, filled with opportunities and challenges. With its rapidly booming economy and entrepreneur-friendly atmosphere, Thailand has become a sought-after destination for both local and foreign investors. This guide will walk you through the process of registering a company in Thailand, ensuring you’re well-prepared to get started on your entrepreneurial journey.

Understanding Thai Business Structures

Before embarking on this journey, it’s essential for any new entrepreneur to understand the various business structures available in Thailand. The following section will elaborate on the key characteristics of each business structure, helping you make an informed decision for your upcoming venture.

Thai Limited Company vs. Other Business Forms 

One of the most commonly chosen forms of business structure in Thailand is the Thai Limited Company (LLC). This structure requires at least three shareholders and offers limited liability protection. In addition to LLCs, there are other business forms, such as partnerships and sole proprietorships. A partnership involves two or more people sharing profits and responsibilities, while a sole proprietorship is owned and operated by a single individual. However, these structures do not offer the same level of liability protection as an LLC, making them less attractive for many entrepreneurs.

Foreign Ownership and Restrictions in Thailand

Even though Thailand encourages foreign investment, there are certain restrictions that need to be considered. Under the Foreign Business Act (FBA), foreign ownership in some sectors including national security, culture, art, and natural resources, is limited. For most businesses, foreigners can own up to 49% of the shares, while Thai nationals must hold at least 51%. However, there are exceptions for specific industries, especially those promoted by the Board of Investment (BOI), such as automobile production activity, which may allow for 100% foreign ownership in Thailand. Understanding these regulations is crucial for ensuring compliance and avoiding legal issues.

Steps to Register a Company in Thailand

Once you’ve chosen your business structure and are clear on ownership regulations, it’s time to move forward with the Thai business registration process. Here’s a detailed look:

Step 1: Reserve Your Company Name

The first step in registering your company is to reserve your company name with the Department of Business Development (DBD). Three options for the company name must be provided in the order of preference. Further, the suggested names must comply with the Thai naming conventions. The DBD will review your suggestions and issue a reservation certificate for the approved name, which will be valid for 30 days.

Step 2: Prepare and Sign the Necessary Documents

With your company name reserved, the next step is to prepare the necessary documentation. Key documents typically include:

Memorandum of Association: This outlines your company’s name, objectives, registered office address, and details about the shareholders.

Company Registration Application: This form includes important information about your business structure and shareholders.

Identification Documents: Copies of IDs or passports for all shareholders and directors.

All the above-mentioned documents need to be signed by the shareholders and directors. If the documents are in a language other than Thai, it would be advisable to have them translated, as Thai authorities typically prefer Thai versions.

Step 3: Register the Company with the Department of Business Development

Once your documents are prepared, you can submit them to the DBD for official registration. This process includes paying a registration fee and acquiring a Certificate of Incorporation from the registrar, certifying your business as a legal entity. This step usually concludes within 3 - 5 business days, depending on the quality of your documents and the processing efficiency of the DBD.

Step 4: Open a Thai Bank Account

After receiving your Certificate of Incorporation, it’s essential to open a Thai bank account in your company’s name. Opening a Thai bank account is crucial for managing local transactions, ensuring compliance with regulations, and establishing your business' credibility. To do this, you'll need to provide several documents, including your company’s registration papers, Tax ID, identification for all signatories, and proof of address. Having a local bank account is crucial for managing the company finances and facilitating transactions, both domestically and internationally.

Step 5: Register for Corporate Income Tax and VAT

Lastly, you must register for corporate income tax and, if applicable, Value Added Tax (VAT). Corporate income tax registration is conducted through the Revenue Department, and you will need to submit your Certificate of Incorporation and Tax ID. Depending on the level of your annual revenue, you may also need to register for VAT.

Post-Registration Requirements for Registering a Company in Thailand

Once your company is officially registered, certain post-registration requirements need to be addressed.

Social Fund Registration and Employee Benefits

If you plan to hire employees, registering with the Social Security Office (SSO) is mandatory. This registration allows your employees to access social security benefits, including healthcare, pensions, and unemployment benefits. As an employer, you’ll need to contribute to the social fund, along with your employees, ensuring they have access to necessary support.

Visa and Work Permit Applications 

For foreign entrepreneurs and employees, securing a visa and work permit is vital. Typically, a Non-Immigrant “B” visa is required for business activities. This is a prerequisite to apply for a work permit in the country. The application process requires various documents, including proof of your company registration and employment letters. It's essential to ensure that all paperwork is in order to avoid delays.

FAQs on Registering a Company in Thailand

How long does the company registration process take?

The registration process can take about one to two weeks, depending on how quickly you can gather the necessary documents and the efficiency of the DBD.

Can a foreigner be a director in a Thai company?

The Civil and Commercial Code imposes no regulations on the nationality of directors of a Thai limited company unless the company operates in restricted industries under the FBA. If the company seeks work permits for foreign employees, meeting the minimum Thai staff and capital ratio is necessary.

What is the minimum capital requirement for a Thai Limited Company? 

Each foreign employee work permit requires at least USD 59,970.00 (THB 2 million) registered capital. For BOI-promoted companies or certain industries these requirements may vary.

Are there annual filing requirements after registration?

Yes, companies must submit annual financial statements and tax returns to the Revenue Department and hold an annual general meeting (AGM) within four months of a fiscal year end.

Conclusion

Thailand company incorporation may seem daunting, but with the right knowledge and preparation, you can navigate the process smoothly. Understanding the different business structures, the necessary steps for registration, and post-registration requirements will equip you with the tools to successfully launch and manage your business in this dynamic market.

We at Commenda are here to help you every step of the way. We understand the challenges entrepreneurs face and are dedicated to guide you through the complexities of setting up your business in Thailand. Contact us to get started today!

‍