Thailand is a country that has been popular with foreign investors for years. Many people are drawn to Thailand because of its low business costs, but there are other reasons too. For example, the company registration process in Thailand can be very simple and straightforward for foreigners who want to start their own businesses. There are also many different types of companies available for you to choose from depending on your needs and preferences.
The first step in registering a company in Thailand is to decide on the type of business that you want to set up. There are several different types of businesses available, and each one has its own specific requirements and regulations.
Private Limited Company
A Private Limited Company (PLC) is a company that has both Thai and foreign shareholders. This type of company offers limited liability to its shareholders, meaning that they are only responsible for the amount of money that they have invested in the company. PLCs must have at least three directors, one of which must be Thai and can have a maximum of 50 shareholders. If you’re aiming to be a Bank of Investment-approved company, a BOI company Thailand law firm will be able to help you.
A branch office is mainly used for conducting marketing or providing service in Thailand. This type of business has no legal personality, meaning that it cannot act as a trustee, enter into contracts, sue others, etc. A company can only open up one branch office and must have an initial capital investment of THB 100 thousand (US$3,000).
The Representative Office is a popular option for many foreign companies who want to start doing business without establishing a formal company. Although it is not classified as an actual type of business structure, the representative office allows companies from outside of Thailand to have their own premises and employees within the country, while only legally operating under most cases (with exceptions like banking and insurance). There are several benefits with opening up a representative office such as:
- Easier to get visas and work permits
- 100% foreign-owned
- Not subject to corporate taxes
- Not subject to the regular work permit requirement as other businesses are
The owner does not create any formality regarding ownership structure. However, there must be someone who manages the company’s day-to-day operations and makes significant decisions about how it operates on behalf of its owner. This person is called a manager or managing director, and the owner of the business must have at least 51% control over that person’s actions. If you are doing this on your own as an individual, there is no legal requirement for any other individuals to be involved in running it.
A regional office is a branch office of your company that is allowed to conduct limited business activities in the same field as that authorised by its parent company. This type of establishment has more advantages than just having an additional location for conducting operations; it can be used for:
- Receiving and sending goods between the company’s head office and the regional office
- Holding or storing an inventory of products to be sold in that region
- Acting as a liaison with local authorities on behalf of the parent company
A regional office must have an authorised representative who is responsible for all activities conducted by the regional office on behalf of the company. The authorised representative must have a residence visa, work permit, and passport stamp from the Thai Ministry of Interior Affairs (MOI).
The assets of each partner are treated separately so they remain responsible for their personal debts if the partnership fails financially by being unable to pay off its financial liabilities, which means creditors can go after them individually (if necessary). Each partner shares equally both profits and losses with every transaction made through their company regarding sales volume, regardless of who actually conducted those transactions. Therefore, all partners receive exactly 50 percent net income share from operations. There should also be a written agreement between the partners that specifies each partner’s contribution to the partnership, what will happen if one leaves or dies, and other critical issues.
It is not necessary for all partners to be Thai nationals; however, at least one must reside in Thailand full-time. Partners can be of any nationality as long as they have the right to do business in Thailand.
A joint venture is a form of business that combines the resources and skills of two or more companies to produce products, services, or other projects for profit. Joint ventures are beneficial when one company wants access to another’s technology, market share, financial strength, and manufacturing capacity, among others, but does not want full ownership responsibilities in the project. There must be at least three individual members who must sign an agreement with each partner having equal rights overall activities involved in the enterprise.
After setting up your own limited liability company (LLC), you can then apply for your Tax ID number which will become effective once approved by relevant authorities through filing necessary documents, such as copies of passport(s), residence visa confirmation form (for foreign nationals), and company registration certificate. Your Tax ID number will then be included in the ‘ledger book’ which is a register of all Thai companies and their respective Tax ID numbers.