Company Formation in Thailand
Are you looking to invest but do not know where to begin? There are different kinds of business setups tailored to your needs, such us:
1. Thai Limited Company
2. Foreign Business
a. Foreign Business License
b. Branch Office
c. Representative Office
d. Regional Office
1. Thai Limited Company
Thai limited companies are generally simple in terms of setup. The characteristics and requirements include:
a. Shareholding: A minimum of 51% Thai and 49% foreign. However, if land is to be acquired within the Thai Limited Company, it may have to be proven that all shareholders have contributed to such shareholding in the company at the relevant land department. For this reason, it is suggested that the majority of Thai shareholding be increased and may be changed at a later stage.
b. Capital: No minimum requirement
c. Shareholders: a minimum requirement of three (3) shareholders must be in place.
2. Foreign Business
A foreign business is usually setup by an individual or a group who chooses to setup their company with majority foreign shareholders instead of Thai. The setting up is a little more complex as there are certain activities that are prohibited by law. Business activities are compiled into three: 1) prohibited activities, 2) activities that are not ready to be competed with Thai economy, and 3) business activities that are not contained in list 1 and list 2, however, can be applied for.
Foreign Business License
The application process for a foreign business license usually takes 60 days upon submission for a decision. The advantage is that, if the application is denied, the application can be revised and resubmitted. The minimum capital for a foreign business license is Three Million Baht. However, this does not have to be repatriated into the country all at once.
Branch Office
A branch office is setup as a branch of a main head office overseas. The branch office is permitted to trade that derives income. If you wish to setup a branch office, you must apply for Foreign Business License under category which best fits your business activities. List Two and List Three activities which are listed in the Foreign Business Act, as List One is strictly prohibited for foreigners to engage in such business in Thailand. The minimum capital for a branch office is also Three Million Baht. Taxes and balance sheets must also be submitted every fiscal year.
Representative Office
A representative office differs from the branch office. Representative office is not permitted to buy or sell products or services although the remaining characteristics of the branch office still apply. This kind of office is usually setup for research of various products and services or the market of a particular industry to be reported to the head office located overseas.
Regional Office
A regional office is usually setup for purposes of managing any other branch or representative office that is located overseas in a particular areas or region. The same characteristics such as those of a representative or a branch office still apply however, a similarity to the representative office in that the regional office is not permitted to trade. Given above, it is best to outline your needs to the business activities you wish to engage in and consult a lawyer to see what best fits you. Contact us today for a free basic consultation!
