Doing Business in Thailand
Company Registration
Company Registration in Thailand is increasing due to the country’s unprecedented economic growth over the years which has been attracting investors to Thailand and addressing the country's increasing market demands while hoping to maximize the return on their investments in the process. Foreign investors are flocking to Thailand because of strong government support and incentives, sufficient infrastructure, skilled and cost-effective workforce. Doing business in Thailand is also supported by well-defined policies geared towards liberalization and free trade, social and political stability and the country's strategic location in Asia. The same reasons why doing business in Thailand is one of the most attractive investment destinations in the world. When doing business in Thailand, you have the choice of what type of business entity which you wish to establish depending on your organizational requirement. You have several options:
Options & Requirements
▪ Thai Registration Ordinary or Limited Partnership
▪ Thailand Representative Office, Thai Regional Office, Thai Branch Office or
▪ Thai Limited Company
Company Registration Requirements
1. At least 3 natural persons as promoters (initial shareholders). Three shareholders are required at all times throughout company operation. It is to be understood that not just anyone can be a promoter. The minimum requirement is that a promoter must, at least, be twenty-one years old who can legally act on behalf of the company. Usually, promoters hold an equal share of the company. It is only after registration of the company that promoters’ shares can be transferred to others.
2. Head office located in Thailand along with a copy of house registration (Tabien Baan) number and Letter of Consent obtained from the landlord.
3. Minimum registered capitalization of 2 million THB for foreign businesses operating non-restricted and 3 million THB for restricted businesses under the Foreign Business Act. Thai-owned companies, not subject to such requirements (but will need to meet financial requirements to support a work permit for a foreign worker).
4. A memorandum of association to be filed with the application.
5. A statutory meeting has to have been convened.
6. Letter of Certification from the bank to certify the adequacy of funds in the Thai shareholder’s personal bank account where Thai shareholders will be amongst foreign shareholders.
7. All shareholders/initial promoters and directors will be required to sign part of the application documents in Thailand.
Thailand Branch Offices
A Thailand branch office structure is similar to that of a company limited structure. Like the company limited, a branch office can earn income in Thailand. Branch offices are likewise governed by the rules on foreign-held company limited. It is with issues concerning liability that a branch office and a foreign-held company limited structure may differ. For a company limited (foreign-owned), liability arising from the business operations or its employees is generally limited to the Thailand Company only. As for the branch office, liability arising from the actions of the business is also the liability of the head office overseas as the branch is merely an extension thereof.
Thailand Regional Office
The Thailand Representative Office is meant to provide support to the head office and engage in activities such as acquiring information of the source of raw materials, market research to report back to the head office, providing advice about the head office’s goods or services or offering news and information about new products or services of the head office. In order to form a representative office in Thailand, at least one of the following purposes would need to be sought for the purposes of strictly the following “non-trading” activities:
1. Search and procuring information about the source of goods or services or raw materials in Thailand for the headquarters overseas;
2. Ensuing or checking the quality and quantity of the product ordered by the headquarters overseas;
3. Offer advice regarding products offered by the head office or affiliated companies to local distributors or consumers whereby, the product must have already been distributing in Thailand;
4. Disseminate news or updates regarding new products, upgrades or improved versions/formulas or services offered by the head office or its affiliated companies; and 5. Reporting the economic movement in Thailand to the headquarters.
Thailand Representative Office
Just like a Thailand representative office, regional offices in Thailand are also not allowed to earn income. It is also strictly regulated to performing specific functions designated by statute on behalf of the head office overseas. A regional office is only limited to perform the following functions:
1. Communicating, coordinating and directing, on behalf of the head office, the operation of branches and affiliates that are in the region;
2. Providing services in consulting and management;
3. Training and personnel development;
4. Financial management;
5. Marketing control and sales promotion planning;
6. Product development; and
7. Services in research and development.
Thai Partnership
Under the Civil and Commercial Code of Thailand, there are two types of partnerships: ordinary partnership and limited Thai partnership. Section 1025 of the Code defined ordinary partnership as a kind of partnership in which all the partners are jointly and unlimitedly liable for all the obligations of the partnership. On the other hand, a limited partnership as defined in Section 1077 is that kind of partnership in which there are: (1) one or more partners whose liability is limited to such amount as they may respectively undertake to contribute to the partnership; and (2) one or more partners who are jointly and unlimitedly liable for all the obligations of the partnership. Doing business in Thailand can be very complicated and may take you several weeks to complete the process. This is mainly due to the registration procedures and the required documents and forms being in Thai. It follows that you need someone you can trust and who is able to communicate in Thai on your behalf to be able to successfully review your company registration. Siam Legal's licensed Thai lawyers and foreign attorneys/solicitors can take care of the legal points of setting up your business thereby making sure that all the necessary requirements are met. Furthermore, we can give you relevant pieces of advice on doing business in Thailand efficiently. Finally, at Siam Legal, we can give you a one-stop service for your convenience i.e. we can help you set up a company while getting you a Thai work permit and Thai Visa at the same time. Consult us today about your company registration!
