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Registering a Thai Company

The economic system of Thailand is strictly under the control of the government. The basic progress of the economic structure of this country is equipped with many efficient channel and efficient infrastructure. Owning a business in this land will not be possible without any legal assistance. If you are one who likes to start a business in Thailand, you must consult with an accomplished consultant. It is advisable to you to take all legal action entailed on this attempt.

It may take several weeks to complete all the necessary steps during the setting up of legalities. It requires certain precedents which can be done easily with the help of a professional and expert consultant. In this way, you can take the burden of legalities out and can concentrate on your core business operations. Having your own consultant means you can trust him, as because he can deal with all legal terms on behalf of you. Such legal counsel ensures your capability to overcome any delays or unnecessary oversight.

Limited Companies:

In Thailand, there are two different categories of Limited Companies such as public companies and closely held or private companies. The first type of limited company is governed by the Public Company Act while the second type of limited company is ruled or governed by the Civil and Commercial Code.

Public Limited Companies:

The Public Limited Companies in Thailand are subjected to consent with the approved prospectus of the business along with other requirements. The companies must have been listed the securities on the SET (Stock Exchange of Thailand) and should apply for warrants, debentures and off shares to the public.

For the registration of a public limited company’s memorandum of association, a minimum number of 15 promoters are needed during the formation of business. In addition, the respected promoters must have the share hold for the minimum duration of two years, before they get transferred. A public limited company must hold a minimum of five members half of which should have a domicile in Thailand. For a public limited company in Thailand, the registration fee is two thousand baht per million baht of the total investment capital.

Private Limited Companies:

Any private limited company in Thailand has few basic characteristics very much closed to the regulations of western corporations. The entire process of formation of a private limited company in Thailand includes the registration of Articles of Incorporation (Memorandum of Association) and Articles of Association (By-Laws) according to the provided constitutive documents.

In the case of private limited company’s registration, minimum numbers of three promoters are needed at all times. Under this criterion, a private limited company can be owned totally by aliens. Nonetheless, according to the reserved activities of Thai Nationals, the participation from the foreign national is restricted up to the maximum limit of 49 percent. For a private limited company in Thailand, the registration fee is 5,500 baht per million baht of the total investment capital.

Step 1: Reservation of corporate name:

The reserved name of your business should not be the similar or close to the other companies or business organizations. You should use such name which is available and is in accordance with the guidelines and rules framed under the authority of Business Development Office. In this regard, you should study the regulations of Ministry Of commerce of Thailand.

Step 2: Filing of Association Memorandum:

In this step, a Memorandum of an association has to be filled at Business Development Office. This action must contain the registered name of the company, the territory of the business, location of the company, business objectives, the amount of capital invested behind the business, along with the name of the promoters.

Furthermore, the information of capital investment must include the par value and the number of shares as well. In addition, certain subjects have to be issued officially and they are such as the authorized capital, the formation step, the payment structure and much more. However, no restriction on the minimum capital requirement is there, you have to step into the business with adequate capital in order to operate the intended business action.

Step 3: Summon for a Statutory meeting:

In this step, you have to define the structure of business share. Once the above-mentioned action will be done, a statutory meeting will be arranged. In this meeting, the bylaws and the incorporation articles will be approved by an appointed auditor under the Board of Directors. According to the regulation of Board of Directors, the 25 percent par value of each and every subscribed share must be paid.

Step 4: Registration:

After completion of the statutory meeting, you will enter the step to register your company. Within the duration of three months from the date of the statutory meeting, the directors will submit the technical and administrative application, on the process of registration. The company registration fee is decided by multiplying the registered capital with 500 baht upon 100,000 baht. The limit of a maximum fee is 250,000 baht and minimum fee is 5,000 baht.

Step 5: Tax Registration:

The legalization of business must include the liabilities for income tax department which obtains a definite tax ID card. The company must obtain the Tax ID from the Revenue Department within the duration of 60 days from the incorporation or initial day of the business operation. Moreover, according to the regulation, when a business operator cross the boundary of 1,800,000 baht per annum in product sales, the operator should register for VAT within 30 days of reaching the limit.

Reporting Requirements:

Any individual firms or start up business organization must keep the record in books and follow certain accounting procedures which are specified in the commercial code, revenue code and civil code as per the Accounts Act. It is to be noted that the related documents of any business may be written in any language. A translation of Thai language must be attached with the main submission. All the entries of accounting details must be written by ink, typewriter or printing copy.
The specific rule of Civil and Commercial code, under the section 1206 says that the account should be maintained as follows.
True accounts have to be kept by the directors of respective companies. The true accounts includes few parameters such as:

  • Of the sums expended and received by the company.
  • Of the matters, based on which the expenditure and receipt take place.
  • Of the assets of the company along with the liabilities and responsibilities.

If you have intentions of doing business in Thailand, then doing legitimate action and setting up of a successful company is quite straightforward. This action is much easier compared to the other countries. The economical status of the market in Thailand is free-wheeling and adequately flexible to set up a new business here.

This is a good place to own a business as the market and customers’ involvement with the business will lead the way to the summit of success. The foreigners will find it quite easy and reasonable to work within the definite legitimate process. Generally, in the European countries and in the USA, the tax matters and legal assistance are largely patterned. Many investors and owners have visited this country to find the convenient way of registering a company, daunted by the legal process and requirements.

The entire process of legitimating depends on what kind of legal terms you want to accomplish with the help of an expert lawyer. However, the legal process is relatively easy in Thailand. The providing services and products of any business must be able to meet the financial requirement to complete the legal part.

One of the most important facts in this regard is foreign ownership of any business. The regulation and guidelines regarding foreign ownership of a business or foreigner’s activities in Thailand business are attributed to the Foreign Business Act of 1999. Nonetheless, you should also confirm that parallel laws and regulation for your business must satisfy and cover the extreme range of activities and potential commerce. The article is emphasized with brief information regarding the “do” and “do not” for the mainstream foreigners in Thailand.

Without being involved too much with the detail, you should hire a honest and experienced lawyer in this domain who can handle all the legal requirements of your business. He can take care of entire litigation process of your business and you may understand very clearly what you can do and cannot do. Before selecting a professional lawyer in this field, you must check the track records and customer’s unsolicited feedback against the lawyer or a group of the lawyer. Depending on the requirement of your particular business, you can consult with lawyers or law firms. Startup in Thailand has been providing legal assistance for over 15 years in Thailand and are a reliable option.

The business opportunities in Thailand are quite nationalistic. This is one of the most sticking points that are needed to be noticed very carefully. According to the majority of cases and national regulation, a company or a particular business in Thailand should be majorly owned by Thai nationals. In terms of shareholders, a company cannot be owned by more than 49 percent by foreigners.

In some special cases, the foreign ownership in any business is limited to a maximum of 39 percent. However, in most of the cases, shareholders of any business are limited to 49 percent. This is one of the most important factors for the foreigners in order to set up a business in Thailand.
Generally, the foreign partners require a foreign business license from the Ministry of Commerce of Thailand.

The exceptions to the majority foreign ownership needs a Foreign Business License from the Ministry of Commerce that is granted by the Board of Investment on the basis of very large numbers of Thais employed, very large investments of money, exceptionally strategic transfer of technology to Thais, etc. Setting up business in Thailand depends on the domain of business and relevant factors.

Can you easily set up a company, majority owned by foreigners? Yes, you can surely. Hundred percent you can file specific papers and legal documents with all foreign shareholders. Furthermore, no official will prevent you from submitting the necessary documents. They will perform the routine process and relevant paperwork just alike other company setup or edition in existing filing. But, you will not be able to do business with that company, until and unless you get a license for Foreign Business.

You can continue the business for sale in Thailand, till nobody perceives and prosecutes against your business. In such occasion, you may be banned from getting non-immigrant B business permit or any kind of extension. In addition, your license may get rejected adding to the risk of penalty or fine for invalid paperwork if you are caught.

You can continue the business for sale in Thailand, till nobody perceives and prosecutes against your business. In such occasion, you may be banned from getting non-immigrant B business permit or any kind of extension. In addition, your license may get rejected adding to the risk of penalty or fine for invalid paperwork if you are caught.

Although it is not necessary that you may lose the control of a business, its property, money, decisions etc just because of foreigners have majority ownership. For illustration, as a foreigner, you own 49 % of the stock whereas Thais hold 51 % of the stock. A foreign Managing Director obviously can be the largest stockholder, where the rest of the shares should be divided among the Thais evenly or as per your convenience.

One of the common things for foreign shareholders is to “pay off” the Thai shareholders, with many of the local law firms. On the other hand, Thai shareholders can sign in an undated agreement of share transfer to put the shares away after the completion of the company set up. The resigned Thai shareholders must confirm the transfer of share to someone else because it cannot be left without an owner. The share must be transferred to another Thai shareholder or to yourself. But, in case you transfer those shares to yourself, actually, you are violating the law for operating an alien company.