It is undeniable that Thailand is one of the sought-after places in Asia for start-up businesses. Most foreigners prefer to establish their companies in the Kingdom due to its fast-growing economy. Also, with the continuous support of the government, the adequacy of facilities, and the efficient work force, Thailand is becoming a viable spot for commerce, better than ever.
In setting up a Thai company, legal assistance is strongly recommended. This is due to the fact that Thai laws allow foreigners to own only 49% of the company’s outstanding capital stock. With proper legal assistance, measures can be adopted in order to achieve 100% foreign ownership.
Thai laws allow foreigners to establish any of the following three (3) types of businesses in the Kingdom: a) Thai Partnership; b) Thai Representative Office; and c) Thai Limited Company. Among the three, the establishment of a Thai Limited Company is common.
Thai Limited Company
A Thai Limited Company is usually preferred by foreigners, and commonly recommended by legal counsels because other than involving more than three (3) promoters, this set-up exhibits fairness and equality among the shareholders of the business.
The capital of the company is equally divided among shareholders and the liabilities are paid in proportion to the amount of shares held.
This type of business also provides incidental benefits to Thailand nationals. Since there is a 1:4 ratio required among foreign and local employees, a Thai Limited Company provides more employment opportunities for locals.
Requirements
Registering a Thai Limited Company mandates compliance with the following requirements:
1. Minimum of 2 Million THB capital per foreign shareholder, (e.g. 1 shareholder = 2 Million THB, 2 shareholders = 4 Million THB)
2. 1:4 ratio of employees (for every foreigner, four Thai employees must be hired)
3. Work permits for foreign employees
Procedure for Thai Limited Company Registration
Here are the steps to follow in registering a Thai Limited Company:
1. Choose a name for the business. Make sure that it complies with the guidelines set by the Department of Business Development under the Ministry of Commerce.
2. Apply for a Memorandum of Association (MOA) at said department. The following information must be provided by the company:
a. Company name (in Thai and in foreign language)
b. Brief business description
c. Amount of capital
d. Number and amount of shares held by each stockholder
e. Company address
f. Personal information of the promoters, i.e. name, age, address
g. Number of the subscribed shares of the promoters
h. Promoters’ signature
3. Upon release of the Memorandum of Association (MOA), the required documents must be submitted to the Private Limited Companies Registrar for registration.
4. Mandatory as it is, the promoters must register the company with the Revenue Department for taxation purposes.
5. Enlist the company at the Social Security Office in the Ministry of Labor for Social Security and Workmen’s Compensation funds.
6. Submit the company work rules, as agreed upon during the statutory meeting, to the Office of Labor Protection and Welfare having jurisdiction over the area where the office is located. Upon approval, the rules must be posted in a conspicuous area in the office.
The Thailand company registration process normally takes a month to complete, and certain fees have to be paid. To be sure that everything is correct, it is best to seek legal assistance from authorized lawyers in Bangkok.
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