In the Kingdom of Thailand, registration as well as conducting of business is governed by a number of laws. Some of the most popular forms of business set ups in Thailand are sole proprietorship, partnership business, joint ventures, branches of foreign companies, and limited companies including public limited companies and private limited companies.
A sole proprietorship is a kind of business set up that can be owned by only one person with unlimited liability. This type of set up is subject to certain kinds of legal actions. Unless included under the United States-Thailand Treaty on Amity and Economic Co-operation, a foreigner is not permitted to start a sole proprietorship business in Thailand.
When comes to partnership business, Thailand allows three types of business such as unregistered ordinary partnerships, registered ordinary partnerships, and limited partnerships. Since it is not promoted by the Board of Investment (BOI), partnership business is seldom operated by foreign investors.
A public limited company in Thailand offers shares for sale through the Stock Exchange of Thailand (SET.) But, a host of legal requirements must be complied with the Public Limited Company Act for starting a public limited company. For instance, half of the promoters must be Thai nationals and there must be at least 15 promoters for the Memorandum of Association.
Private limited companies are the most popular type of business set ups in Thailand. A foreigner can easily set up a private limited company. However, according to the Foreign Business Act, there are certain businesses that cannot be started by a foreigner on a majority basis.
Laws pertaining to the establishment of a private company in Thailand are governed by the Civil and Commercial Code, the Revenue Code, and the Accounts Act. Private limited companies are akin to western corporations and are regarded as one of the most prominent vehicles to set up a permanent business in the country. Establishment and registration of a private limited company involve certain important steps.
Foremost is the reservation of corporate name for your company. However, the name you have chosen or reserved for your company should not be same or similar to the corporate name of other companies. According to the law, certain names are not allowed as the company name. One can lean guidelines provided by the Commercial Registration Department in the Ministry of Commerce for reserving a company name. Filing of Memorandum of Association with the Commercial Registration Department is the next step in the incorporation of a private company.
Memorandum of Association must include the company’s reserved name, location of the company, business goals, share capital amount as well as how it is divided, and names of seven promoters who sign this document. Once the Memorandum of Association is registered, a government fee of about 0.5% of the registered capital must be paid. Then, a statutory meeting of all shareholders must be convened, in which the bylaws as well as articles of incorporation are approved and the board of directors and auditors are selected.
After this, the directors must file their application for the establishment of the company, within 90 days from the date of the statutory meeting. When the application is filed, a government fee of Thai 5,000 baht, which may go up to a maximum of 250,000 baht, must be paid. It is mandatory that within 60 days of the incorporation of the company should register for income tax and receive a tax ID card and a number for the company from the Department of Revenue.
Above all, once the company is incorporated and has successfully started its operation, it is required to maintain accurate books of accounts as per the Accounts Act, the Civil and Commercial Code and the Revenue Code. Accounting documents can be prepared in any language, however with a Thai translation.
Company formation and registration in Thailand offer some obvious benefits. One of the prime advantages is that the law does not entail any minimum capital requirement for establishing a business set up. Another benefit is that the Board of Investment (BOI) of the country renders a multitude of incentives to promote and encourage company formation in Thailand. As it is a founder member of the ASEAN (Association of Southeast Asian Nations), the country provides access to a prospective ASEAN market.
A myriad of specialist consultancy firm coupled with the services of attorneys are in the scenario to help you with the processes involved in company incorporation and registration in Thailand. They help you deal with a number of activities pertaining to the registration of company such as selection of appropriate company name, financial consulting, legal consulting, drafting company by-laws and business objectives, preparation and filing of the Memorandum of Association, registering Corporate Tax and VAT, creating company logos and seals, and more.
We provide you some very essential general information and advice concerning the setting up of a company in Thailand and carrying out business there, and the working environment prevailing in Thailand.
Basically, if you possess genuine intentions of doing business in Thailand, then establishing a company and carrying out legitimate business in Thailand is relatively straightforward and not difficult, particularly in comparison with lot of other countries.
Thailand is a good choice to invest for your business plans, and not at all a bad place. It is a relatively trouble-free market economy, and comparatively flexible. The Thai legal system concerning company and tax matters is to a great extent designed after the USA and European countries such as Switzerland and France. Therefore almost all foreigners adapt well and discover it reasonable and smooth to work within.
Many people have approached Thailand comprehending the daunting requirements and process, and most of them soon realize that it is not quite so burdening after all. Even though it depends on what you want to achieve and hope to accomplish, it also rests a lot on right guidance and expert support.
The major requirement to be a successful businessman in Thailand is, well, doing business well. By saying this, what we are to underlining is that that the legal part should be the relatively comfortable part in Thailand. Don’t let yourselves to burden your head with the legal procedures you will have to encounter in Thailand. What is relevant is whether your business is financially feasible after considering the products and/or services you are wishing to offer. The legal part should be perceived as the easy part and should stick to that.
Quite often, people are worried by the bad stories they read on the Internet or hear from others. Experienced business consultants in Thailand say that it’s usually a lot safer than what I often find on the Internet and hear from those I don’t deal with, provided your business is really energetic in trying to bestow products and/or services.
Every story is double-sided, but often the Internet is similar to the news; bad news spreads much further than good news, and people always choose to complain. In reality, most of Thailand is friendly, not bad. It is very similar to the “all Thai women really need only your money” myth on the Internet. Be calm and cool and just try to understand the real scenario and you will the right information.
Even though this is the situation there are some small problems which you can, with some care, surely over come. There are fields in which foreigners are not allowed to enter. However, almost all of these are basically low skilled fields and not of attention. But the majority of fields that foreigners of class would choose to work in are allowed. Another problem that everyone must handle with is that the rules, instructions and forms are all provided in the Thai language. But if you are committed enough there is a worthy sum to be made from Thailand.