How to Set Up a Business in Thailand: Registering a Company

Moving forward with a plan to establish a business in Thailand demands a meticulous approach, as it does in many countries, and registering a Thai limited company is a common and convenient choice among foreign investors seeking to make their mark in this vibrant economy. In this comprehensive guide, we will walk you through the essential steps and considerations to ensure a smooth and successful company registration process. Essentially, there are several steps involved that should ideally be executed in order. In this article, we have laid out the process into nine steps to make it easy to follow, however, please note that there are many intricacies involved and we recommend consulting with a business lawyer in Thailand for the most up-to-date information and specific legal guidance.

Step 1: Reserving a Company Name

The initial step in setting up your business is to reserve a company name with the Department of Business Development (DBD). Promoters have the option to either fill out the name reservation form at the Department of Business Development (DBD) or make an online reservation through the DBD website. Be mindful of restrictions such as avoiding names resembling existing companies and adhering to specific terms and guidelines. Suggest three names in order of priority to enhance the likelihood of approval. The approved name is valid for 30 days, during which you must proceed to the next step.

Step 2: Prepare and Sign Documents

Gathering crucial information about your company is pivotal at this stage. The paperwork, including the Statutory Meeting for the adoption of the Memorandum of Association (MOA) and registration application documents, requires details such as company name, registered office location, company objectives, share capital, and information about promoters, directors, and shareholders. Thoroughly preparing these documents is essential for a seamless registration process.

Essential Details Required for Documents:

• Company Name: Choose a unique and compliant name for your business.
• Registered Office: Specify the province in the Kingdom where your company's office will be situated.
• Objectives: Clearly define the goals and objectives of your company.
• Share Capital: Outline the proposed share capital for registration.
• Promoters: Provide names, addresses, occupations, and signatures of at least two individuals acting as promoters.
• Directors: Include names and addresses of registered directors, specifying whether they sign separately or conjointly.
• Registered Office Details: Specify the address of the registered office and any branch offices.
• Ultimate Shareholders: Provide personal details of ultimate shareholders or company registration details for corporate shareholders.

Step 3: Register the Company

The processing time for registering your company depends on your business specifics. Upon completion, you will receive the registration documents and a crucial company/tax ID. Keep in mind that the registration fee for a private limited company is THB 5,500 per THB 1 million of registered capital.

Processing Time Variability:

The timeline for registration can vary based on the complexity of your business structure and specific requirements. Thoroughly review the details with your legal counsel to ensure a smooth and efficient process.

Step 4: Open a Company Bank Account

Facilitate the financial operations of your business by opening a company bank account. Specify the bank, branch, account type, and authorized signatories. This step is pivotal for the smooth functioning of your business and typically takes around 9 days to complete.

 Bank Account Opening Details:

• Bank and Branch: Clearly state the preferred bank and branch for the company account.
• Account Type: Specify the type of account required for your business operations.
• Authorized Signatories: Clearly identify individuals authorized to sign on behalf of the company.

Step 5: Register for Corporate Income Tax and VAT

Within 60 days of incorporation or business commencement, apply for and obtain a company corporate tax ID card from the Revenue Department. If your business employs foreigners or exceeds a yearly revenue of 1.8M THB, VAT registration is mandatory. Ensure you have the necessary documents, including the owner's business premises details and lease agreement.

Tax Registration Details:

• Corporate Tax ID Card: Apply and obtain the corporate tax ID card within the specified timeframe.
• VAT Registration: Fulfill VAT registration requirements, especially if your business meets specific revenue and employee criteria.

Step 6: Social Fund Registration

Prioritize the registration of your employees (both Thai and foreign) with the Social Security Fund (SSF) within 30 days of hiring the first employee. Collect essential employee details, including ID cards, workplace photos, salary information, and position details. This registration is crucial for the subsequent visa extension process.

SSF Registration Requirements:

• Employee Details: Collect and submit necessary employee information, including ID cards, photos, salary details, and position information.
• Registration Deadline: Ensure compliance with the 30-day deadline for SSF registration to avoid penalties.

Step 7: Visa Application

Facilitate legal stay and work in Thailand for foreign directors and staff by securing the relevant visas. Once incorporated and tax-registered, your company can act as a sponsor for a Non-Immigrant 'B' visa. Proper documentation and adherence to legal procedures are paramount for a successful visa application.

Visa Application Process:

• Incorporation Prerequisites: Ensure that your company is duly incorporated and tax-registered before initiating the visa application process.
• Documentation: Prepare all necessary documentation for visa applications, including relevant company information and director details.

Step 8: Work Permit Application

For scenarios requiring a work permit, assist your foreign staff in obtaining the correct visa before entering Thailand. Gather required documents such as photos, a medical certificate from a Thai doctor, education certificates, and salary details for a comprehensive work permit application.

Work Permit Application Details:

• Documentation Requirements: Compile all necessary documents, including photos, medical certificates, educational certificates, and salary details.
• Thai Embassy Procedures: Follow the procedures for obtaining the correct visa at a Royal Thai embassy or consulate overseas before applying for a work permit.

Step 9: Visa Extension

Extend your initial 90-day visa following the successful work permit application. Compile necessary documents from your company, including VAT and SSF registration details for all staff.

Visa Extension Process:

• Document Compilation: Gather all required documents from your company for the visa extension process.
• Deadline Adherence: Ensure timely submission of documents to facilitate a seamless visa extension.

Getting the Right Legal Support to Establish a Business in Thailand

Navigating the process of setting up a business in Thailand requires careful consideration and adherence to legal procedures. Foreign investors can explore various business structures, with a Thai limited company being a popular choice. Seek guidance from experienced business registration lawyers in Thailand to ensure a hassle-free and successful company registration process. Setting up a business in Thailand demands meticulous planning, attention to detail, and compliance with legal requirements. With the right guidance, foreign investors can establish a strong presence in this dynamic and promising business landscape.

Comparison of Business Structures in Thailand

How to Set Up a Business in Thailand: Additional Considerations

Number of Promoters and Shareholders

Promoters play a crucial role in the registration process, and a minimum of three promoters is required. This ensures the prospective shareholders are already identified, preventing external parties from seeking dissolution. There are no restrictions on the maximum number of promoters and shareholders, providing flexibility in structuring your company.

Effects of Registration

Once the company registration process is complete, the newly established company is recognized as a separate legal entity, known as a "juristic person." This status grants the company rights, duties, and liabilities independent of its shareholders. Agreements made between the company and third parties only bind the company itself, not the shareholders personally. This legal separation offers security and protection to shareholders.

Memorandum of Association (MOA)

The MOA is a vital document for company registration, specifying key details such as the company name, address, business objectives, capital, number of shares, and names of promoters. Filing the MOA with the DBD is a critical step, and the capital amount should be reasonable for the intended business operations.

Articles of Association

This document outlines agreements and policies regarding shareholder relations, company operations, and corporate matters. Key areas covered include shares and shareholders, directors, shareholders' meetings, balance sheets, dividends, reserves, and liquidation. Adherence to the Articles of Association is essential for smooth corporate governance.

Reporting Requirements

A Thai Company Limited must adhere to reporting requirements, including preparing financial statements monthly and annual auditor audits. Shareholders' meetings must approve financial statements within four months from the financial year-end, with submission to the DBD within one month. Annual shareholders' meetings must be held within six months from the company's registration date, with subsequent meetings at least every 12 months.

Applying for BOI Promotion

Registering your company for BOI promotion in Thailand comes with a number of advantages, ranging from tax-related benefits to non-tax perks. In terms of taxes, newly established foreign investors may enjoy exemptions from paying taxes for up to eight years, along with reduced corporate taxes and favorable import duty rates for machineries and raw materials. BOI promotion also supports research and development costs while exempting foreign companies from certain production and export expenses. Beyond tax incentives, investors gain full ownership of their companies, access to visas and work permits, as well as the ability to own land and property. However, it's crucial for company owners to recognize that BOI benefits are specific to selected sections of the company, not covering the entire business. These advantages commence immediately upon receiving the BOI promotion certificate, and all pertinent information is conveyed in writing by the BOI.

Read our detailed guide on Setting up a BOI-Approved Business in Thailand.

How to Set Up a Business in Thailand: Continuous Compliance

Operating a business in Thailand successfully doesn’t stop at the company formation stage. Your company also needs to ensure ongoing compliance with Thai business regulations, including the preparation of share certificates, maintaining a shareholders' registration book, and filing requests for the relocation of the company's head office if applicable. Compliance with reporting and registration timelines is crucial to avoid penalties and maintain the company's good standing.

The journey of setting up a business in Thailand is a multifaceted process that demands careful attention to detail and compliance with legal requirements. Choosing the right business structure, understanding the nuances of company registration, and adhering to ongoing compliance measures are key to a successful and sustainable business venture in the Land of Smiles. For foreign investors, seeking guidance from experienced legal professionals ensures a smooth and efficient navigation of Thailand's business landscape.

Explore the Best Business Registration Lawyers in Thailand for expert guidance.