A Thai Limited Company is the most common type of foreign owned business in Thailand, offering numerous advantages for international businesses. Its structure also allows foreigners to enjoy 100% foreign ownership, as well as a number of other benefits including tax breaks and land rights.
When forming a Thai Limited Company, it is important to ensure that all required documents are properly completed and filed. There are a range of factors to consider and our experienced advisors can help you with the full process of setting up a company in Thailand.
After deciding on the appropriate company type, an investor should choose an original name and check that it is not already registered in any other jurisdiction. It is important to make sure that the name is not too similar to another company and that it is easy to understand, as this will reduce the chance of confusion in the future.
Once the company has been registered, it must open a corporate bank account with a recognized commercial bank. This can be done online or via a registered agent, but it is essential to ensure that the accounts are set up correctly and that they are regularly updated.
Once a company has been set up, it must prepare all the relevant documents that are needed for registration and filing with the local authorities. These include the Memorandum of Association, the shareholders’ list and a Share Registrar Book.
Ensure that the Share Register Book is kept up-to-date and issued with new shares as they become available. Failure to do so can result in penalties of up to THB 20,000 per year.
A statutory meeting of the shareholders is a necessary part of company registration in Thailand, and it must be held at least once every 12 months. This is where the Articles of Incorporation and the Articles of Association or By-laws of the Company are approved, the Board of Directors is elected and an auditor appointed.
It is a requirement that all companies hold annual general meetings where shareholders can discuss issues relating to the company and its affairs. If the company fails to hold such a meeting for a first time, it will face a fine of 20,000 baht.
There is no general restriction on the nationality of the directors who control a Thai Limited Company, although in some cases the law requires that at least one third or the nearest one-third of the director is a Thai citizen. However, there is a potential for future amendments to the Foreign Business Act that could restrict foreign directors from being eligible for re-election in any given year.
If a foreign director holds a majority of the company’s shares, then they must hold a work permit in order to take part in any day-to-day management of the company or any other role that requires signing authority. In addition, if a foreign director hires any staff from abroad then they must apply for a work permit for each employee that they hire.
If you want to start a new business in Thailand, you should look at registering it with the BOI. This is a great way to get started in the country, and it will come with a number of benefits. However, it is important to understand the process before starting so that you can avoid costly mistakes.
The first step in registering your business is to get all the necessary documents together. It can be a time-consuming process, and it can also be tricky to complete without the assistance of legal professionals. Our team at Vize can help you navigate this complex process to ensure your company's success.
You need to fill out an application form that details your company's activities and other relevant information. It can be filled out online or a physical copy can be submitted to the BOI office in Bangkok. After that, you can expect your company to receive a promotion certificate within 10 days.
Once the certificate has been issued, you need to contact an official at the BOI and arrange an interview. This can take up to 10 working days and you need to make sure you have the correct documents in order for this to happen.
During the interview, you will be asked to present your business plan and other presentations that support your application. If the BOI is satisfied with your presentation, you will be able to move on to the next step in the registration process.
When it comes to your company's finances, you'll need to open a bank account in Thailand. This will require a separate banking license, which can be difficult to obtain. It is best to work with a Thai bank that can help you set up a digital business account instead, which will be much easier and quicker to manage.
It is a good idea to consult with a local accountant before opening your company in Thailand. This will allow you to better understand the tax and other financial requirements of operating in Thailand.
In addition, you need to make sure that your Thai company is in compliance with the law and is not breaking any laws. This is particularly important if you are operating a foreign-owned business.
The Thailand Board of Investment helps companies by granting them incentives that will help their businesses grow. These are referred to as "BOI promotions."
There are eight categories of business that qualify for BOI promotions. These categories include agriculture and agricultural products, agribusiness services, electronics and parts, coil centers, IT, manufacturing, and retail.
Each of these categories has a set of eligibility criteria that must be met in order to be considered for an investment promotion. These criteria vary slightly from industry to industry, but the overall concept remains the same.
Ultimately, the BOI is designed to bring foreign investors and Thai residents together and help them benefit from their investments. The incentives provided to BOI promoted companies are quite substantial and the government adds benefits on a regular basis. This makes it a great opportunity for both parties to grow and succeed.