There are many reasons why a foreign national would like to open a business in Thailand. Establishing a Thai company may assist a foreigner to purchase property, live in Thailand, or work in Thailand. The Thai government would like the primary intent of forming a company to be the building of a new business to earn income and contribute to the Thai economy.
The process is generalized in this article but it will provide an overview on how to form a Thai company. There are multiple steps with forms written in Thai that needs to be organized with supporting documentation and filed with multiple Thai government agencies. It is recommended that a foreigner who is going through this process to seek the assistance of an experienced accountant or an attorney.
The majority of shares in a Thai company must be owned by a Thai citizen unless it is part of a special Board of Investment (BOI) program. This means that foreigners can only own up to 49% of a Thai company. The 49% limit for certain business activities can be exceeded or exempted if a Foreign Business License is granted. A Foreign Business License is generally granted to foreign owned businesses that are unique and do not compete with Thai businesses.
There are several forms of companies. The most popular form of company is a private limited company. In a private limited company, shareholders have limited liability while the directors may have unlimited liability. Private limited companies require a minimum of three share holders. The share holder can be Thai or foreigners but they must be a real persons (non-juristic) and own shares in the company.
The process begins with the promoters reserving the name of the company with the Department of Business Development. The promoters must submit a minimum of three names which are not similar with existing reserve names and do not violate any current ministry regulations. The DBD will choose one name out of the three.
Next, the promoters must file a Memorandum of Association with the Commercial Registration Department. The Memorandum will contain the name of the company, the number and value of the shares, and the names of the promoters. Following the filing of the memorandum, a statutory meeting is called to establish the particulars of the shares, establishment of the directors, and remuneration to the promoters. If the company will have foreign workers, there are minimum registered capital requirements and employment requirements for the company.
Within three months of the statutory meeting, the directors have to submit an application to register the company. During the application process, the shareholders and promoters must submit payment for the shares in the new company and sign all of the registration documents. New companies that may be liable for income tax must obtain a tax ID from the Revenue Department within 60 days of incorporation or the start of business.
After registration, the company can begin the process of getting business licenses and start the operation of its new business. The new company is required to keep track and book income and expenses according to procedures specified in the Civil and Commercial Code, the Revenue Code, and the Accounts Act. There are financial submission requirements for the company in order to maintain its status.