Do you wish to expand your business in Thailand? If so, you will need to register your company. Maybe you have a business plan for growing your corporation. If so, you can make it work if you know the basic steps involved in registration. If you are a foreigner, you will find that Thailand offers a great venue for investments. Read the following info to see how you can benefit.
Register a Business in Thailand
Before you register a business in Thailand, you should decide what type of business you want to establish. You can set up a corporation or limited company. Normally, most business owners choose a limited company. That is because a limited company is easier to establish and the directors of the company can apply for work permits.
According to Thai legal experts, a limited company is registered by dividing capital funding into shares. To register a limited company, you will need to attain at least three shareholders and promoters. These can be the same people. These three people can serve as an auditor, director, and a registrar. The registrar is assigned to draft and submit a Memorandum of Association.
Each promoter of the limited company receives at least one share, and the initial payment on the shares cannot be under 25% of the named amount. The promoters must set up accounting for the limited company in accordance with the Revenue Code of Thailand. They are responsible for submitting balance sheets to the proper authority annually.
While a limited company often is the best foreign investment choice, the law in Thailand still limits foreign ownership to just under 50% of the established shares. Therefore, the share arrangement is set up to 51% for Thai investors and 49% for foreign investors.
The Role of the BOI and Its Influence with Foreign-based Businesses
If you wish to fully own your Thai company, you should have your plans reviewed by the Board of Investment (BOI) in Thailand. If your company is promoted by the BOI, you will make it easier on yourself. Not only do you receive help with visa paperwork, but you also can apply for work permits for your employees. In addition, you are not subject to corporate taxation.
However, not all businesses can get support from the BOI. You need to speak to a Thai attorney if you want to register a Thai company that is 100% foreign-owned. Applying for BOI promotion can be rather time-consuming, as you need to work with the BOI a good deal. The whole registration process, when you involve the BOI usually takes about 2 months.
After receiving support from the BOI, you need to present your financial sheets regularly for continued promotion. While you can set up this type of plan yourself, you will make fewer errors by collaborating with a lawyer and an accountant.
Sole proprietorships also register their companies in Thailand. In this case, the entity that is registered is owned by a sole owner who also serves as the business’s operator. While you can conduct business as a foreigner and sole proprietorship, you may find incorporation a challenge.
According to the civil and commercial code in Thailand, partnerships come in three forms. Not all of them are registered. Partnerships may be described as follows:
- Ordinary Partnerships that are not registered
- Limited Partnerships
- Ordinary Partnerships that are registered
If you register an ordinary partnership, you need to register your company with the local authorities. This type of partnership allows the partners to keep the company’s legal duties, rights, and risks separate from the partners. If an ordinary partnership goes unregistered, it is not considered a legal entity. Therefore, all partners are responsible for mistakes or financial mishaps.
You also have limited and unlimited partnerships. While unlimited partners are liable for all debts and capital funding, limited liability partnerships are only held responsible for the amount of capital each partner contributed to the company.
While it is easier to register a partnership than a company, a partnership cannot apply for work permits. You also cannot open and oversee a corporate bank account under your business’s name.
Incorporating and Registering Your Company
If you do plan to incorporate and register your company, you need to go through the Department of Business Development in Thailand, also referred to as the DBD. The DBD features offices in the capital of Bangkok and other Thai provinces. Therefore, you can register your company through the DBD outside of Bangkok, if needed. Regardless of your company’s location, you can submit documents for registration at any DBD office.
If you need to make any registration changes, however, you will need to visit a DBD office where your company is established.
The Registration Process
If you own a sole proprietor or partnership, registration is fairly clear-cut and simple. However, if you own a limited company, you will need to submit more paperwork and follow more processes. Should you incorporate your LLC and register it, you will need to choose and reserve a business name in accordance with DBD guidelines.
After you choose and register a name, you will need to set up a meeting to incorporate your business, which will also lead to the drafting of a Memorandum of Association. Both the Memorandum of Association and application for registration should be submitted together. Always work with an attorney to make sure any registration goes as planned.
If you need legal advice or assistance from a qualified corporate lawyer, please contact us today.