Establishing a Business in Thailand for Foreigners

Thinking of establishing a business in Thailand? This article is for you.

Thailand is a bustling country in Southeast Asia that welcomes many foreigners. There are many reasons a foreigner may want to set up a business in Thailand. Some people come over for retirement, while others arrive for work purposes. Regardless of the reason, here is what you need to know about Thai limited company rules if you plan on establishing a business in Thailand.

Ownership Requirements for a Thai Limited Company

The first thing that should be mentioned is that being a foreigner does not mean all hope is lost when it comes to setting up a local business here. However, foreign ownership interest must primarily stem from one source: either the board or CEO (or both) must have significant stakes in the company itself – typically 49% shareholdings will suffice.

If you do not meet the criterion, two of which must be Thai nationals. This is done primarily in order to protect local interests and there are other options such as a branch office, but these tend to be less favorable and more costly. An international law firms in Bangkok will be able to help you figure out the things you have to do to be able to set up a company in Thailand.

Another important thing to remember is that companies must have at least three shareholders. Ensure that any legal issues or problems which may arise can be resolved quickly and without too much complication.

Reservation of the Company Name

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As far as company names go, it’s best to avoid anything that could potentially cause offense or confusion among locals. The name should also reflect the nature of your business so make sure you do some research beforehand!

Below are three basic requirements for the company name that you have to follow:

  • First, the suggested company name must be original and not similar to any other company name in Thailand.
  • Second, you must submit three suggested names to the Department of Business Development (DBD) before you can register your company. You will not be allowed to use the name if it has already been registered by another party.
  • Finally, the Thai word for ‘company’ must always appear in front of any abbreviations or acronyms that are used within your legal documents and business cards.

Minimum Capital Requirements for a Thai Limited Company

A final point worth mentioning: all businesses in Thailand must have a registered capital of no less than 500,000 Baht. This can be in the form of cash or assets and is generally used as a guarantee to creditors in case the company runs into financial difficulties down the road.

Registering the Company with Department of Business Development

Once your company is registered, you’ll need to apply for a business license from the Department of Business Registration. The license comes with a registration number that you should always keep on hand, just in case the authorities need to contact you about your business activities.

Registering Tax ID and Vat

Within 60 days of the company’s establishment, you must apply for a tax ID and VAT. This can be done through the Revenue Department or at any of the local branches throughout Thailand.

As far as accounting goes, it is recommended that all companies hire an accountant who can ensure Thailand’s limited company rules are being followed properly and legally. After all, Thai tax law is notoriously complex and it’s easy to make a mistake that could end up costing you time and money. So there you have it, some of the most important things to remember when setting up a limited company in Thailand. By following these simple tips you’ll avoid any nasty surprises and can focus on growing your business!