Formation of a Foreign Company

In a Thai Limited Company, there is a limitation of foreign shareholding to 51%. For this reason, some foreigners find it necessary and more convenient to setup a company that is merely an extension or another headquarter of their main branch of their company located overseas instead of having to setup a newly established Thai company. There are various types including:

1. Branch Office

A branch office is setup in order to control various business activities in Thailand that has their mother or parent company overseas, however, the liabilities of a branch office remains with the parent company. A branch office would need to have the same name as the parent company.

2. Regional Office Headquarters

A regional office serves as an assistant, and to report to the head office with regards to maintaining and supervising matters of the branch offices or subsidiaries located in the same area.

3. Representative Office

The representative office is mainly setup in order to perform research and review with regards to goods and services that are provided to the head company located overseas. The representative office duties are limited and may not engage in any selling or deriving of any income. Invoices are also not issued by the representative office.

4. Foreign Business Act/License Company

A foreigner may engage in certain types of business according to the Foreign Business Act B.E. 2542 (1999) with various types of activities located in the list of activities provided by the Foreign Business Act comprised in Lists one (1) to three (3).

5. Amity Treaty Company

An Amity Treaty Company allows American wholly owned companies to be registered and incorporated in Thailand with the benefits of a Thai company and without the limitation of American foreign shareholding, however must remain as 51% minimum of American shareholders. This kind of company also surpasses most restrictions that are consisted in the Foreign Business Act.

6. FTA Thai-Australian Company

Under the Thai-Australia Free Trade Agreement companies are able to be formed with more than 50% shareholding of Australians and must be between Australian and Thai nationals only.

7. JTPEA Thai Japanese Company

Under the Japan Thai Economic Partnership Agreement, Japanese nationals are permitted to own shares in a company limited or ordinary partnership with a majority of the shareholders being of a Japanese citizen or nationality.

8. Foreign Business License

If you wish to engage in business in Thailand however with a majority of foreigners, you must apply for a foreign business license under the foreign business act. There are a variety of factors that must be outlined in each application.