Thailand’s exceptional economic growth in recent years has attracted investors to establish various businesses to meet the increasing market demands of the country. Both local and foreign SMEs are intent on maximizing the return on their investment, secure in the knowledge that they can rely on government support and even enjoy incentives. Foreign company registration in Thailand has reached an all-time high as doing business in Thailand is one of the top investment destinations across continents.
Business Registration Options
There are different business registration options in Thailand:
- Limited Partnership or Registered Ordinary
- Branch Office, Representative Office or Regional Office
- Limited Company
In Ordinary Partnership, at least two persons are joint partners, sharing unlimited liability of their business obligations, including debts, taxes, and even tortuous acts. In Ordinary Partnership, business registration is optional. In Limited Partnership, one partner has limited liability while the other partner’s liability is unlimited. This type of partnership must be registered.
A Branch Office, Representative Office, and Regional Office all require Foreign Business License. Both Representative Office and Regional Office have limited activities, and are only allowed to engage and perform non-trading activities. On the other hand, a Branch Office is allowed to earn an income.
A Thai Private Limited Company is the most prevalent form of business structure across Thailand. In this type of business, separation between owners and management is called for. Due to the equal division of capitalization among shareholders, their liability is limited to a pertaining unpaid amount on their shares. For Private Limited Company to be incorporated, it needs:
- A minimum of one director
- At least three promoters
- One auditor
- Statutory meeting
- Article of association or memorandum of association
- Registration of papers of incorporation
A Private Limited Company is mandated to strictly follow the accounting procedures state in the Account Act, Revenue Code, and Commercial and Civil Code. Withhold income tax are deducted from regular employees, and the company is to submit a balance sheet to the Department of Revenue and Commercial Registration.
Procedure in Registering a Limited Company
- Reserve the company’s proposed name to the Thai Ministry of Commerce. There should be at least two alternative names to be submitted in the event that the initial name choice is already registered. It is important that the submitted names do not go against ministerial rules. If all three submitted names are rejected, the applicant must submit three more names. This process will normally take 2-3 days
- File a Memorandum of Association or MOA to the relevant Thai authorities. All shareholders are to sign the MOA which contains their personal information, business address, registered capital of the company, scope of business, and so on.
- Convene a statutory meeting, and make the necessary appointments in reference to company officers.
- Company Registration. All documents are to be submitted to the registrar of the Ministry of Commerce. If the business office is located elsewhere than Bangkok, the pertaining papers may be submitted to the filing office of the province. The Ministry of Commerce will then issue the company certification, affidavit, articles of association, list of shareholders, and other relevant papers.
- VAT or Specific Business Tax (SBT) Registration. Depending on the business type, the company may apply for VAT or SBT. All documents necessary for the registration of the business’ Tax ID and VAT Certificate must be presented to the main office of the Revenue Department. If the company does not own the business premises, it is tasked to get the signed permission of the owner of the grounds or the location where the business will be located or built.