29/10/2020
Company Registration
Setting a Business in Thailand
Registering a company in Thailand is more complicated than in many other countries due to the restrictions on foreign ownership. There are ways to protect the foreign interest when setting up the company, and so you are best advised to consult with a law firm before set up to make sure you are proceeding in a way that gives you security, and provides the best structure going forward.
Key questions that can influence how you decide to setup your Thai company include the following:
• What are the main business activities of the company?
• Is there a foreign parent company with shareholding requirements?
• Does the Thai company need to sponsor visas and work permits for foreign personnel?
• Are there going to be Thai staff working full-time and registered with social security?
• What premises does the company require?
What business licensing is required to cover the business objectives?
To set up a company limited in Thailand, there are five critical considerations:
1- Shareholders
There must be a minimum of three promoters – these can be Thai or foreigner, in any mix, but must be natural persons. These promoters are often also the shareholders, but not necessarily so. While promoters must be natural persons, shareholders can be other companies, but there must also be a minimum of three. Generally 51% of the shares must be Thai owned, but there are exceptions (below). Even if 51% of the shares are Thai owned, ATA Services can structure the company for you so that the foreign 49% maintains complete control of the company, its dividends and share transfers. Ask us to explain how this is done.
2- Directors
The company must have at least 1 authorised director who will sign documents on behalf of the company. There can be more than one authorised director, and the signing conditions can require more than one signature ¬– it is up to you. The authorised director(s) can be Thai or foreign, but some business licensing, for example Tourism Authority of Thailand (TAT), requires a Thai director. A foreign director signing on behalf of the company normally will require a work permit and visa.
3- Minimum capital
The company needs to register its capital when it is created, although this can be increased later for a small fee. You do not need to show the money as paid up at the time of company registration, but it will need to be included in your first annual report. You should capitalise the company according to how much it will cost you to get the company cash positive. What this amount is depends on your business plan, However, the minimum capital in order to sponsor a work permit for a foreigner is 2m Baht per person, and this should be 100% paid up. If this is a hardship for your start up business in Thailand, talk to us about possible solutions.
4- Business objectives
You should advise your law firm of all your company objectives prior to registration. These objectives are in reality a statement of business activity, e.g. exporting of dried banana, and you should have a statement for each activity. Your law firm can then advise you accurately on any restrictions or licensing that may apply. ATA Services will give you this advice for free in an initial consultation.
5- Registered office
The company will need a commercial (not residential) address when registering. ATA Services provides virtual office solutions and flexible physical offices at our two Bangkok business centres if you need a starting point. Once the company employs Thai nationals (a requirement for sponsoring a work permit), a suitable physical office is required to register them for Social Security – the office will be inspected! Some business activities requiring licenses need the registered office to meet additional requirements. Whatever office you require, the land owner must be willing to provide signed copies of ownership documentation if your company needs to register for VAT with the Revenue Dept. As we own our business centres, ATA Services readily makes available the necessary documentation.
You are strongly advised to consult with a commercial law firm, who is experienced at setting up all kinds of business, prior to registering the company to explain your needs. While things can be ‘fixed later’, it is important that you have a full understanding of the issues, requirements, costs and options from the outset. Foreigners particularly need advice on the structuring of their company in order to protect their investments. Take advantage of our free consultation.
Company registration process
1- A short meeting –We would like to have a short meeting with the client to make sure all the variables have been explained and that there is a clear understanding on registration process, business objective, legal risk.
2- Name reservation – All companies will have Company Limited / Co., Ltd. added to the English name – this is mandatory. We do not know if the name will be accepted by the DBD until we submit the application – it is a manual decision by a DBD officer, and the an English name is sometimes rejected because of the way it appears in Thai transliteration. Thus, we ask for options in case the first choice is not available or rejected. The name can be given in English or Thai.
3- Get your company information – We provide you a questionnaire with explanations and a list of the documents you will need to provide us. Remember that in Thailand photographs of documents are never accepted – you must copy/scan on plain backgrounds at actual size. Also, signatures are required in ink (no scans of signatures), so that any shareholder outside of Thailand will need to courier/mail the documents back to us.
4- Submit the application – the submission and approval is completed in one full working day after receiving all the signed documents from the client. You can start your business using the company as soon as this registration is complete, provided you do not require specific licenses.
5- We prepare the bank document bundle for you to open a corporate bank account within Thailand. This is usually ready one working day after the company is registered. Note that if the director is a foreigner, some banks/branches require a work permit. We can suggest branches where this is not required.
