two people starting business registration thailand

Key points for Business Registration Thailand

  • First this article will run through the different types of businesses available in Thailand starting with Limited Companies which are the most popular.
  • Choose your business type and then read on to find out how to register the business you want.
  • For a detailed FREE CONSULTATION call ONETHEVISA.

Business Registration Thailand

There are many routes to starting a business in Thailand and as a foreigner you have a few options. The process is relatively simple and not too costly, as long as you follow the guidelines and have the right documentation prepared. We recommend consulting with a lawyer to speed up the process and/or to help navigate your way through the more tricky parts of the system.

bridge over city representing company in thailand

1. Limited Company- Thai Majority

Limited companies are the most common way to start a business in Thailand. In limited companies there must be three shareholders, who hold unpaid shares. Foreigners can only hold up to 49% of these shares in total. The three shareholders must comprise of a director, an auditor and a registrar who will need to compose the Memorandum of Association. The business should have an accountant to follow Civil and Commercial Code and the Revenue Code of Thailand, submitting company books each year. The company directors may apply for work permits to foreign employees.

Setting up a Thai limited company in Thailand

  • Reserve your company name with a local Department of Business Development (DBD) office or you can now complete the Thai business registration online (https://ereg.dbd.go.th/ERegistMemberWeb/nonmemberpages/home.xhtml)

    Your business name must obey usual copyright laws, registered in both Thai and English. You can suggest 3 names to DBD to give yourself a higher success rate.

    The trading name of your business can be different from the company name and once approved it will be valid for 30 days. If your registration isn’t completed in this time it will be forfeited.

    You will need to collect and prepare the following:

  • The objectives of the company
  • The Registered Capital for starting the company.
  • The names, addresses, occupations and signatures of theshareholders with their share percentage.
  • A registered address for the company.
  • The name of the proposed company.

 

  • Submit your documents with a DBD office. Once completed, you will receive the registration documents along with a company/tax ID.

    The registration fee for a private limited company is THB 5,500 per THB 1 million of the registered capital. If you are requiring work permits you will need 2 million registered capital for each book.

  • Once registered you can apply for and obtain a company corporate tax ID card from the Revenue Department.

    VAT payments are only required for companies who employ foreigners or have a  yearly revenue of 1.8M THB. 

 

floating market showing business in thailand

2. Limited Company- Foreign Owned

It is possible for a foreigner to own a business in Thailand but the process is more complicated. A foreign owned business is any business that has more than 49% of shares in the hands on foreign nationals. The Foreign Business Act governs these types of business and businesses that wish to be foreign owned must obtain a Foreign Business License before commencing its operations in Thailand.

Setting up a Foreign owned limited company in Thailand

The Foreign Business Act (FBA) imposes restrictions on foreigners from engaging in approximately 50 types of business activities, categorized into three lists.

LIST ONE comprises activities such as newspaper businesses, animal farming, and land trading, among others. Foreigners are completely barred from operating businesses listed here due to “special reasons,” with no avenue for obtaining approval.

LIST TWO encompasses businesses related to national security and domestic transportation via land, waterway, or air, including domestic airline operations. While foreigners or foreign entities can engage in list two activities, approval from the Minister of Commerce and the Cabinet is required. However, securing such approval is notably challenging.

LIST THREE includes activities where foreigners and foreign entities are restricted from participation due to the perceived unpreparedness of Thai nationals to compete. Approval for list three activities is attainable through the Director-General of the Commercial Registration of the Department of Business Development and the Foreign Business Committee. List three comprises various service businesses not otherwise specified by ministerial regulations.

 

To engage in activities from LIST 2 and LIST 3 a foreign entity would need to obtain a Foreign Business License, filing an application with the Business Department to be reviewed by the Cabinet or Foreign Business Committee.

Foreign Business Licenses, while possible are difficult to obtain, which is why most entities choose to partner with a majority Thai shareholder. Approval of a FBL will be reviewed based on how it benefits Thai society and national safety, how it would impact and benefit the development of the nation and how it would create local employment opportunities. The business must not be seen to be in direct competition with Thai owned businesses.

Once documents are submitted to the Director General a decision will be made within 60 days and a license issued with 15 days thereafter. Due to the protective nature of Thailand in regards to foreign businesses the process can take longer, and without having a qualified lawyer present the application will more than likely fail.

 

BOI or board of investors in thailand

3. BOI (Board of Investors)

The Board of Investment (BOI) Thailand offers investment incentives to both foreign and local entrepreneurs interested in participating in the agency’s promoted activities. The BOI has established criteria for projects seeking incentives and privileges. To qualify for BOI promotion, your business must align with the categories defined by the Board.

 

Whilst only certain businesses qualify for BOI status, the process removes some of the restrictions that are in place for Foreign Business License applications. BOI companies in Thailand can be 100% owned by foreign entities and operate within the remit of the restrictive business lists. Other incentives include the ability to own land, apply for work permits without employment restrictions and remit money abroad.

The BOI does however only cover certain businesses and the process can take up to 6 months. Seek legal help to speed up the application process:

AGRICULTURE : plant and animal breeding, forest plantation, fertilizers, deep sea fishery, packing and storing of vegetables and flowers, plant or animal fat, products from natural extracts, rubber, bio fuels, food additives, food supplement and cold storage.

MINING CERAMICS AND BASIC METALS: prospecting minerals, potash mining and dressing, advanced or nano material products, glass and ceramic products, fire resistant materials, heat insulation materials, gypsum, steel, metal powder, ferro alloy, and coil centers.

LIGHT INDUSTRIES: textiles, fabric, sports equipment, musical instrument, furniture, toys, jewelry, lens, medical devices, and leather products.

METAL PRODUCTS, MACHINERY AND TRANSPORT EQUIPMENT: metal products or parts, surface treatment, machinery, equipment, automobiles, engines and parts, rubber tires, ships, aircrafts, fabrication industry or platform repair for petroleum industry and science equipment. 

ELECTRONIC INDUSTRY AND ELCTRICAL APPLIANCES: electrical products, electrical equipment for industrial use, electronic products, transmission cable, parts for telecommunication products, printed circuit boards, solar cells, media for hard disk drive, flat panel display, software and E-commerce business.

CHEMICALS, PAPERS AND PLASTICS: industrial chemicals, polymers, oil refineries, petrochemicals, plastic products for industrial goods, plastic packaging, recycled plastic products and medicines.

SERVICE AND PUBLIC UTILITIES: production of electricity, production of tap water, loading facilities for cargo ships, airports, mass transit system, distribution centers, international headquarters, international trading centers, trade investment support offices, energy service companies, real estate development for industrial use, cloud service, research and development, bio technology related services, engineering designs, scientific laboratories, calibration, sterilisation and waste treatment.

Technology and innovation development: Biotechnology, Nanotechnology, Advanced Material, Technology and Digital Technology.

Setting up a BOI company Thailand

It is simple to apply for a BOI company but consult a lawyer to make sure that your company complies with their specifications. You can find out more on how to do E-registrations here

 

man running a sole proprietorship business in thailand

4. Sole Proprietorship

This type of business is owned and registered by and in the name of a single individual. He or she functions also as the operator. This type of business is not available to most countries. US citizens under the US-Thai Amity Treaty can register a Sole Proprietorship Business in Thailand. Foreigners who have married a Thai can register a sole proprietorship in the name of their spouse. 

Sole Proprietorships are easy to set up with minimal legal requirements. Using only identity documents the sole proprietor is personally liable for the business, which differs from a company limited. There are minimal costs as a sole proprietor can operate from their residence instead of renting an office. Tax is also simpler, with no corporate tax, profits are taxed through personal income.

Setting up sole proprietorship in Thailand

To set up a sole proprietorship in Thailand you will need the following:

  • A signed copy of the house registration book of the business address (This can be the sole proprietor’s residence address). If the business address is not the owners then a letter of consent signed by the owner of the building is valid too.
  • Passport or ID
  • A map of the business address
  • Taxpayer number
  • VAT certificate
  • Application Form

Begin with registering the company name with the DBD office. This can take a couple of days. Make sure to give at least three names to avoid clashing with other registered businesses and slowing down the application process.

Next, to obtain a Certificate of Incorporation, upload your documents on the DBD e-registration portal. To begin with you will not need to register to pay VAT. This is not necessary until the business earns over 1.8million in revenue per financial year. 

For foreigners working in sole proprietorships they must also obtain a valid visa and work permit.

Make sure that your business registers for other licenses if necessary. Contact a lawyer to check to see if your business is fully compliant.

two people signing papers for business registration thailand

5. Thai Civil and Commercial Parnerships

  • Unregistered Ordinary Partnership – Partners equally share responsibilities and liabilities for any adverse events. Additionally, this form lacks legal recognition at present.
  • Registered Ordinary Partnership – This variant necessitates registration with the relevant authority, providing it with legal status and independent legal rights, responsibilities, and liabilities.
  • Limited Partnership – This category encompasses two partner types: the unlimited liability partner and the limited liability partner. The former bears complete and indefinite responsibility, irrespective of their partners’ contributions. Conversely, the latter’s liability is limited to their partners’ contributions.

Although registering partnerships can be easier than other registering other company structures, one cannot apply for work permits or open company bank accounts and is not the advised route for foreigners starting a new business in Thailand.