Company Thailand

Setting Up a Company in Thailand: A Complete Legal Guide

Thailand remains one of Southeast Asia’s most attractive business destinations for foreign investors. Whether you are starting a small business, a regional office, or a factory, you need to understand the legal rules first.

These rules apply to setting up a company in Thailand. This guide covers the main business structures, foreign ownership restrictions, the registration process, and ongoing compliance requirements.

Types of Business Entities in Thailand

Thai Limited Company (บริษัทจำกัด)

This is the most common structure for foreign investors. A Thai Limited Company requires a minimum of three shareholders and a Board of Directors. Key features:

• Minimum registered capital: 1 million THB (2 million THB if employing foreign nationals requiring a work permit)
• Limited liability for shareholders
• Corporate tax rate: 20% on net profits (reduced rates for SMEs)
• Registered with the Department of Business Development (DBD)

Partnership

Thailand recognises Ordinary Partnerships (unlimited liability) and Registered Ordinary Partnerships. These are less common for foreign investment due to personal liability exposure.

Representative / Regional Office

Foreign companies can establish a representative or regional office in Thailand without incorporating locally. These structures cannot generate revenue from Thai sources but are useful for marketing, coordination, or procurement activities.

Branch Office

A foreign company can operate a branch in Thailand. The branch is treated as an extension of the foreign parent and subject to Thai corporate tax on Thai-sourced income. Foreign Business Licence (FBL) requirements apply in most sectors.

Foreign Ownership Restrictions: The Foreign Business Act

The Foreign Business Act B.E. 2542 (1999) is the primary legislation governing foreign investment. It restricts foreign ownership (defined as 50%+ foreign shareholding) in three lists of business categories:

• List 1: Absolutely prohibited to foreigners (e.g., farming, forestry, Thai media, Thai-antique trading)
• List 2: Permitted with Cabinet approval only (e.g., domestic transport, Thai-language schools, hotels)
• List 3: Allowed with a Foreign Business License from the DBD. Examples include accounting and legal services. It also covers wholesale and retail below set capital levels

Businesses not listed in any of the three categories can generally be 100% foreign-owned. Many manufacturing, exporting, and technology businesses fall outside the restricted lists.

Pathways to 100% Foreign Ownership

• BOI (Board of Investment) Promotion: BOI-promoted companies may get approval for 100% foreign ownership. They may also receive other incentives. These include tax holidays and land ownership rights.
• US-Thailand Treaty of Amity: US nationals and companies majority-owned by US citizens can engage in most business activities on an equal footing with Thai nationals.
• Industrial Estate Authority: Certain activities in designated industrial estates may qualify for majority or full foreign ownership.

Company Registration Process (Step by Step)

1. Reserve the company name with the DBD (online or in person). Three name options are submitted; the DBD approves or rejects within 3 days.
2. File a Memorandum of Association (MOA): The MOA defines the company’s objectives, registered capital, and shareholder structure. This is filed with the DBD.
3. Hold a statutory meeting: All promoters (initial shareholders) must hold a statutory meeting. They must approve the MOA, appoint directors, and authorize share issuance.
4. Register the company: File the incorporation documents with the DBD. The DBD issues a company registration certificate (company registration number) within 1-3 days.
5. Register for tax: Obtain a Tax ID (TIN) from the Revenue Department within 60 days of incorporation. Register for VAT if annual turnover is expected to exceed 1.8 million THB.
6. Open a corporate bank account: Required for business transactions and capital verification.

Total time from name reservation to company registration: approximately 7–14 business days.

Work Permits and Visas for Foreign Directors/Employees

Foreign nationals who will work in Thailand need a Non-Immigrant B Visa. They also need a Work Permit. This includes Thai company directors. Work permits are issued by the Department of Employment and require:

• Proof of employment by a Thai-registered entity
• Company documents (registration certificate, financial statements, shareholder list)
• A ratio of at least 4 Thai employees per foreign work permit holder

Ongoing Compliance Requirements

After registration, Thai companies must comply with ongoing obligations:

• Annual financial statements: Must be audited and submitted to the DBD within 5 months of the fiscal year end
• Annual general meeting (AGM): Must be held within 4 months of the fiscal year end
• Corporate income tax returns: Half-year (PND 51) and annual (PND 50) returns filed with the Revenue Department
• VAT returns: Monthly (PP.30) if VAT registered
• Social security contributions: Monthly contributions for all employees
• Withholding tax: Deducted from payments to employees, contractors, and service providers

Related Articles

• Personal Income Tax in Thailand
• Social Security in Thailand
• Estate Planning in Thailand

External resources: Department of Business Development (DBD) | Board of Investment (BOI) | Thai Revenue Department

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Company Registration Thailand

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• Social Security in Thailand for Expats
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