Thailand has always been friendly with foreigners. It is very lenient to foreign companies that want to establish their businesses and incorporates the hospitable culture into the business arena. Thailand also offers sufficient infrastructures where foreign investors can locate their businesses. Also, it implements well-defined policies designed to protect foreign businesses in their country.

It is for these reasons that foreigners establish their companies in the Kingdom.

Business Organizations
According to the Board of Investment, Thailand recognizes three kinds of business organizations: a) partnerships b) limited companies and c).joint ventures. Sole proprietorships are allowed only if covered by the US-Thailand Treaty of Amity.

Partnerships
Regulated by Thailand’s Civil and Commercial Code (CCC), partnerships are divided into two
a. Ordinary partnerships (registered and non-registered)
b. Limited partnerships

Registered by the Commercial Registrar, a Registered Ordinary Partnership is recognized as a juristic person. Partners are liable in all the obligations of the business, and taxed as a corporate body.

On the other hand, a Non-Registered Ordinary Partnership is not registered as a juristic person. Though the obligations of the business are shouldered by the partners, they are taxed individually.

In Limited Partnerships, the liability of the partners is just within the contributions they gave for the business. However, both are still legally responsible for all the obligations of the company.

Limited Companies
The second type of business organization is the Limited Company. It is also sub-divided into two types:
a. Private Limited Company and
b. Public Limited Company

A Private Limited Company is the most preferred form of business structure in Thailand. Governed by the CCC, the capital is equally divided among the shareholders, and their liabilities are limited to what is stated in the Memorandum of Association (MOA).

It requires a minimum of three shareholders, and board of directors. It may be fully owned by foreigners, but for some circumstances that Thai nationals are prioritized, the foreigner can only hold a maximum of 49% of the shares.

In Public Limited Company, shares are sold to the public at the Stock Exchange of Thailand (SET). Its operation is governed by the Public Limited Company Act of Thailand. It should have at least fifteen (15) promoters to come up with a MOA, and half of it must be Thai nationals.

Joint Ventures
Joint ventures are like a tie-up project between companies in Thailand. It is an agreement between or among legal businesses, foreign or local, for the purpose of marketing and profit. Companies utilize the s’ services and products of each other to promote their business and gain more assets.

In Thailand, joint ventures are often registered as another limited partnership, and ends once the project is completed.

Sole Proprietorships
Sole proprietorships are businesses owned by a single individual. It is not allowed In Thailand, since only a foreigner would own the company. However, US citizens are exempted due to the US-Thailand Treaty of Amity.

Procedure of Application
For each business structure, there is a definite required procedure of application. There are also individual sets of requirements. However, the general procedures are as follow:
1) Company name reservation. Before the business could operate, a business name must be decided. It has to be in Thai. However, if it does not have a definite Thai translation, the English terms must be written in Thai according to the pronunciation.
2) Memorandum of Association. It is a must that a business company comes up with a MOA. It has to be filed with concerned Thai government agencies.
3) Statutory Meeting. Since this is the first shareholder meeting, the agenda will be about the appointments of responsibilities, business flow explanations, and all other things concerning the business.
4) Thai Business Registration. In order to be covered by the Thai laws, a business must be registered at the Commercial Registrar of Thailand.
5) Tax Registration. Registering the business for tax purposes is important, and is compulsory for all foreign and local companies in the Kingdom.

Doing a business in Thailand would be a great decision for businessmen. However, the process in setting it up could be daunting. It is advisable to seek legal assistance. There are expert lawyers in Thailand who could assist in the process and lessen the possibility of going around in the circles of the registration procedures.

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