Thailand, with its vibrant economy and welcoming business environment, has attracted investors from around the globe. If you’re considering starting a business in the Land of Smiles, a popular choice is to establish a limited company. This article outlines the steps and requirements for registering a limited company in Thailand.
Before we delve into the steps, it’s essential to understand what a Thai limited company is. A Thai limited company is similar to a private limited company in other jurisdictions where the shareholders’ liability is limited to the amount unpaid on the shares they hold. It is governed by the Civil and Commercial Code and the Foreign Business Act in Thailand.
Prerequisites for Registering a Limited Company
- Company Name Reservation: You’ll first need to reserve your company name online with the Department of Business Development (DBD). The name should not resemble any existing companies or trademarks in Thailand.
- Shareholders: A Thai limited company requires at least three shareholders at all times, which can be individuals or juristic persons. For foreign investors, it is important to note the rules around foreign ownership. As per the Foreign Business Act, a company is considered a Thai company if at least 51% of its shares are held by Thai nationals.
- Capital Requirements: While there is no official minimum capital requirement, the amount should be deemed reasonable for the business’s nature and size. It is also crucial to note that for companies with foreign shareholders, a minimum capital of THB 2 million is typically required if they aim to hire foreign employees.
- Directors: Every Thai limited company needs at least one director. The directors have the authority to bind the company, and they can be of any nationality.
Steps for Registering a Limited Company
- Name Reservation: Log into the DBD website and submit the desired name for your company. This usually takes a few days to get approved. Remember, your company name must be unique.
- Memorandum of Association Filing: Once the name is approved, you can file the Memorandum of Association (MOA). The MOA, signed by the company’s promoters, includes information such as the company’s name, the province where the company will operate, the business’s objective, and the capital details.
- Statutory Meeting: Following the MOA filing, hold a statutory meeting where the shareholders approve the articles of association, ratify any contracts or expenses, and appoint the director(s).
- Company Registration: After the statutory meeting, register the company with the DBD. This must occur within three months of the statutory meeting. It includes presenting a list of the shareholders and paying the government fee.
- Tax Registration: The company needs to obtain a tax identification number from the Revenue Department within 60 days of incorporation or the start of operations. If the company has one or more employees or annual income exceeds THB 1.8 million, it must also register for VAT.
- Register for Social Security: If the company has one or more employees, it needs to register with the Social Security Office within 30 days of the first employee’s start date.
While the process of setting up a limited company in Thailand can be relatively straightforward, the involvement of both Thai and English languages, understanding the local regulations, and complying with the administrative processes can be daunting. It is highly recommended to engage with a reputable local law firm or business consulting company to navigate the complex waters of Thai business registration.
Finally, while this guide provides an overview of the standard process, always remember that business regulations and laws can change. Stay updated and check with the DBD and other relevant government agencies for the most current requirements and procedures.
By taking the right steps and precautions, you’ll be well on your way to launching a successful limited company in Thailand. Best of luck with your entrepreneurial journey!