Are you a foreign investor and thinking about Company Registration in Thailand? Then there are many questions that you should get answers to before you leap forward. Let us help you in this regard through our FAQ article suggested by corporate law professionals with more than decades of experience in the field.
- Can foreigners own a company in Thailand?
- What types of business structures are available for foreigners in Thailand?
- What are the minimum requirements to register a Thai Limited Company?
- Can foreigners own 100% of a Thai Limited Company?
- Are there any nationality requirements for directors or shareholders?
- What is the process of registering a company in Thailand?
- Do I need a work permit to run my company in Thailand?
- Are there any tax obligations for foreign-owned companies in Thailand?
- Can I use a virtual office or a residential address as the registered office?
Can foreigners own a Company in Thailand?
Yes, foreigners can own a company in Thailand. However, there are certain restrictions and requirements depending on the type of business structure.
The specific requirements and restrictions depend on the type of company you wish to establish. In Thailand, there are generally two types of companies that foreigners can own:
- Thai Limited Company: This is the most common type of company for foreign ownership. Under Thai law, a Thai Limited Company can have up to 49% foreign ownership, while the remaining 51% must be owned by Thai nationals or Thai juristic persons. However, there are certain business activities that have additional restrictions on foreign ownership, such as banking, telecommunications, and some aspects of the media industry.
- BOI-promoted Company: The Board of Investment (BOI) is a government agency that promotes investment in specific industries in Thailand. If your business falls within the promoted activities listed by the BOI, you may be eligible for greater foreign ownership and additional incentives and privileges.
What types of Business Structures are available for foreigners in Thailand?
Foreigners can establish various business structures in Thailand, including:
- Thai Limited Company
- Representative Office
- Branch Office
- Regional Office
- Regional Operating Headquarters (ROH)
What is the most common type of business structure for foreigners in Thailand?
The Thai Limited Company (private limited company) is the most common business structure for foreigners in Thailand. It offers limited liability and allows full ownership by foreigners in certain industries. Click here to know about the cost of incorporation of a Private Limited Company in Thailand.
What are the minimum requirements to register a Thai Limited Company?
The minimum requirements for company registration in Thailand include:
- At least three shareholders, which can be individuals or corporate entities.
- A minimum registered capital of 5 million Thai Baht (although it does not need to be fully paid up).
- At least one director can be a foreigner or a Thai national.
- A registered office address in Thailand.
Can foreigners own 100% of a Thai Limited Company?
Yes, foreigners can own 100% of a Thai Limited Company in certain industries, subject to the Foreign Business Act and other regulations. However, some industries may require specific permissions or have restrictions on foreign ownership.
The Foreign Business Act of Thailand restricts certain business activities to Thai nationals only or requires foreigners to obtain a Foreign Business License to engage in those activities. However, there are certain industries where foreign ownership is allowed up to 100% without the need for a Foreign Business License.
To determine the foreign ownership restrictions for a Thai Limited Company, you would need to consider the Foreign Business Act and its amendments, as well as any relevant regulations and notifications issued by the Thai government.
Are there any nationality requirements for directors or shareholders?
There are no specific nationality requirements for directors or shareholders of a Thai Limited Company. Both Thai and foreign individuals can hold these positions.
The requirements depend on the type of company being formed. Here are the general guidelines:
- Private Limited Company (Co., Ltd.): At least half of the directors must be Thai nationals. However, if a private limited company is owned by foreigners under the Foreign Business Act, the majority of the directors must be Thai nationals.
- Public Limited Company (Public Co., Ltd.): At least half of the directors must be Thai nationals, and the majority of those Thai directors must reside in Thailand.
What is the process of registering a company in Thailand?
To register a company in Thailand, you need to follow a specific process. Here’s a general overview of the steps involved:
- Company Name Reservation: Choose a unique name for your company and submit a name reservation application to the Department of Business Development (DBD) at the Ministry of Commerce.
- Prepare Memorandum of Association (MOA): Prepare the Memorandum of Association, which outlines the company’s objectives, capital, shareholders, and other relevant details.
- Statutory Meeting: Hold a statutory meeting with all the shareholders to discuss and approve the MOA and Articles of Association (AOA) of the company. Note that, this meeting can take place after the approval of the name reservation.
- Capitalization: Deposit the registered capital in a bank account. The minimum registered capital required depends on the type of business you intend to operate in Thailand.
- AOA Preparation: Prepare the Articles of Association, which contain the internal rules and regulations of the company.
- Company Registration: Submit the complete set of company registration applications along with the required documents to the DBD. The DBD reviews the application, and upon approval, issues a certificate of incorporation.
- Tax Registration: Register for tax purposes with the Revenue Department within 60 days of company registration. You will need to obtain a Tax Identification Number (TIN) and VAT registration if applicable.
- Social Security Registration: Register your company and employees for the social security system at the Social Security Office in Thailand. This step is mandatory and ensures your employees have access to social security benefits.
- Licenses and Permits: Depending on your business activities, you may need to obtain additional licenses and permits from relevant government agencies or local authorities.
- Commercial Registration: Finally, you must register your company at the local district office where your business is located. This registration includes obtaining a business license and operating permit.
Do I need a Work Permit to run my Company in Thailand?
Yes, in Thailand, a work permit is generally mandatory for foreigners who wish to work or run a company. The Ministry of Labor of Thailand issues the Work Permit. It is a legal document that allows non-Thai nationals to engage in employment within the country.
If you are a foreigner and intend to run a company in Thailand, you will typically need to obtain a work permit. The process involves meeting specific requirements and going through various procedures. Please note that the specific requirements and processes may vary depending on the type of business you plan to operate. Additionally, it also depends on the visa category you hold.
It’s advisable to consult with a legal professional or seek guidance from the relevant authorities, such as the Ministry of Labor or the Board of Investment (BOI), to get accurate and up-to-date information regarding the requirements and procedures for obtaining a work permit to run a company in Thailand.
Are there any Tax obligations for Foreign-owned Companies in Thailand?
Yes, foreign-owned companies in Thailand have tax obligations that they need to fulfill. The specific tax obligations can vary depending on the type of business structure and the activities of the company. Here are some key tax obligations for foreign-owned companies in Thailand:
- Corporate Income Tax (CIT): Foreign-owned companies in Thailand are subject to corporate income tax on their net profits earned within the country. The current corporate income tax rate in Thailand is 20%. Click here to get complete support for registering and filing Corporate Income Tax in Thailand!
- Value Added Tax (VAT): If the foreign company engages in the sale of goods or provision of services in Thailand, it must register for VAT purposes. The standard VAT rate is 7% but may vary for certain goods and services.
- Withholding Tax: All incomes of foreign company in Thailand is subject to withholding tax. This includes dividends, interest, royalties, or payments for services. The rates vary depending on the type of income and whether there is a tax treaty between Thailand and the foreign company’s home country. Click here to know all about Withholding Tax in Thailand for Foreigners.
- Specific Business Tax (SBT): Certain businesses, such as financial institutions, are subject to specific business tax instead of VAT. The SBT rate varies depending on the specific business activity.
- Social Security Fund: Employers, including foreign companies, must contribute to the Social Security Fund in Thailand. The contributions are based on the employees’ wages and are meant to provide social security benefits such as healthcare and pensions.
- Personal Income Tax: If the foreign-owned company employs individuals in Thailand, it is responsible for deducting and remitting the personal income tax of its employees to the Thai Revenue Department.
Can I use a Virtual Office or a Residential Address as the Registered Office?
No, you cannot use a virtual office or a residential address as the registered office for a company in Thailand. You must have a physical commercial office space.
Please note that the information provided here is general. Therefore, it’s important to consult with legal and business professionals who specialize in company registration in Thailand for personalized advice based on your specific circumstances.
Simply email us at [email protected] to get the best assistance in company registration in Thailand. Our team with more than a decade of experience in the domain will get back to you within 1 Thai working day!
