If you are looking to joint venture registration in Thailand or set up a joint venture company, you must know that it can be done in two ways;
- The joint venture can be registered as a limited legal company, wherein the partners own an agreed percentage of shares.
- Also, it can be registered as a form of a partnership agreed by the contract in between a business and another or juristic partnership formed for a particular project. In such a case, your unincorporated joint venture will anyway be considered as a juristic business for tax liability purposes by the Revenue Department even though it doesn’t have a legal entity. Therefore, any joint venture will have to apply for a tax identity card as well as a value added tax certificate, only if it does a business that is subjected to VAT.
Joint Venture Registration Procedure in Thailand
The registration process and fees for incorporating a joint venture in the country are same as the formation of a limited business.
Typically, the incorporation will need reserving your company’s name. Once you are done with that, next step would be to file a Memorandum of Association with the Commercial Registration Department. The fee is somewhere between 5,000 baht and 250,000 baht.
And the final step of the setup involves attending the statutory meeting, where 25% of the value of the subscribed share needs to be paid. The directors must submit their application in order to establish a company.
Your business should have three shareholders or promoters and minimum 51% of the shares should be with the Thai nationals. However, you must also know that there are certain activities that let the foreigners hold maximum of shares in the company, which includes;
- Business falling under the Board of Investment’s eligible activity list
- Majority is owned by the American nationals
Nevertheless, to get started on the process, you will need to have a few documents ready, which are explained below;
- Company’s designated name (at least three proposed names)
- Confirmed registered office address
- Your business’ objective explained in detail
- Copy of your passport along with two other promoters
- Name of the authorized director(s)
- The number of foreigners you intend to work for
In order to protect your interests as a foreign director of the Joint Venture, it is better to go for a Preferred Share option, wherein there will be two tiers of shares; one is Preferred Shares and the other is Ordinary Shares. Usually, Ordinary shares carry one vote for each share, whereas the Preferred share carries the same vote for every ten shares. Being a foreign director, you must, after all, do your best to retain your control over voting rights by issuing the JV in Thailand with Preferred shares and granting yourself Ordinary shares for greater voting rights.