Legal Services Hua Hin

Establishing a Limited Company in Thailand

Laws that regulate the establishment and integration of the various types of Thai business enterprises can be found in the Civil and Commercial Code of Thailand law. A private company is established in a process that leads to the registration of a Memorandum of Association and putting the statute of the company on file. A Thai public liability company can be formed within weeks, provided the documents are in order. However, experience has shown that setting up a company in Thailand is always a unique process, making it a more time-consuming than normally estimated.

Registering the Company

The first step is to submit 3 possible names for your company name. This can be done on the website of the DBD (Department of Business Registration) or in person at one of their offices. When the name is approved you will be notified within three days.

Certain names are not allowed in Thailand:

• names that can be associated with the royal family;
• names of ministries and government departments;
• names using the word Thailand;
• names that are very similar to those of other companies;
• names violating public morals;
• names that are misleading.

The approved company name is valid for 30 days in which time you must acknowledge acceptance to continue with the formation of your business.

Memorandum of association

The company’s memorandum of association has to be filed with the Registrar of Company at the Commercial Registration Department of the Trade Register and it must contain the following:

• the approved company name;
• the province in which the company will be based
• the company’s business;
• the balance sheet;
• the names of at least 3 shareholders, there must always be one more Thai Shareholder than foreign; i.e. 2 foreigners, 3 Thai.

At least three people have to sign the Memorandum of Association. The shareholders can be both Foreigner and Thai. The use of bogus Thai shareholders by the Foreigners is forbidden by the Foreigner Business Act and Land Code Act.

Share capital

A corporation in Thailand must have a minimum share capital of 1 million Baht. The registered capital must be sufficient for the intended business activities. When a company wishes to request a work permit for a Foreigner, the company must have an authorized capital of at least 2 million Baht for each work permit. So two work permits for Foreigners mean a share capital of 4 million Baht, 3 work permits require a share capital of 6 million, etc.

As soon as the ownership structure is defined, a statutory meeting is called in which the memorandum of association and the articles of association are approved, the Board is chosen and an accountant appointed.

Articles of association

The articles of association are the regulations of the company related to its internal affairs, such as voting rights and matters that prescribe the protection of rights of foreign minorities within the company, these rules can for example relate to the issuing of preferred shares. At a later stage these shares can be connected to shares to be issued, in other words, you have to buy the preference shares by increasing the registered capital.

Share certificate

In Thailand all shareholders of a company must receive a share certificate registered in their name from the company. The company itself must keep an up-to-date registration of shareholders at its main office. Bearer shares are not allowed. A share certificate is the property of the person who is registered as the shareholder at the Business Registration Department.

The share capital of the company cannot be changed in any other way than by a change of the memorandum of association of the company, ST(Statutory Meeting) or AGM(Annual General Meeting)

Statutory meeting

Within three months after the date of the statutory meeting of the members of the board, the application must be submitted to the registry, in order to establish the company.

VAT, corporate tax and sales tax

A newly founded company is liable to income tax and must request a tax ID card and a registration number for the company from the Revenue Department within 60 days. If it is expected that the gross income will exceed 1.8 million Baht annually, registration for VAT (Value Added Tax) must be done within 30 days after the date at which the gross income of 1.8 million Baht has been reached.

A newly established company must keep accounts in accordance with the procedures described in the Civil and Commercial Code, the Revenue Code and the Accounting Act. Documents can be drawn up in any language provided there is a copy in Thai available. After 12 months from registration the annual statement of accounts must be drawn up.

The tax rate for companies with a paid capital of no more than 5 million Baht at the end of the fiscal year has been set at 15% on the 1st million Baht of profit, 25% on the profit between 1 million and 3 million and 30% for profits exceeding 3 million Baht.

Management of a private company in Thailand

A company is managed by at least one director authorised by the shareholders. The director(s) (is/are) responsible for, but not limited to, the following.

• the existence and regular keeping up-to-date of the books and documents in compliance with law
• actual payment for the shares by the shareholders
• the correct division of dividends in compliance with the law
• Recording the minutes of the Annual General Meeting and inviting all the shareholders

If a company neglects to call and hold an AGM of shareholders in compliance with the Civil Code of Commerce a fine of 20,000 Baht will be enforced.

Share capital
A Company in Thailand must have a minimal share capital of 1 million Baht. The registered capital must be sufficient for the intended business activities. When a company wishes to apply for a work permit for a Foreigner the company must have an authorized capital of no less than 2 million Baht for every work permit.

Thai employees
In order to apply for a work permit; you must have at least 4 Thai citizens on your payroll for each work permit, however, there is an important exception to this. There are exceptions to this rule which are governed by the business registered.

Taxes and social contributions
In Thailand you can establish an Ltd WITH and WITHOUT tax. When you expect an income of less than 1.8 million Baht per year, you can set up a company WITHOUT TAX. In such cases you only need to submit your tax return once a year. A company WITH TAX has to submit a tax return once a month. In addition to that the company must have paid social contributions for its Thai employees for at least one month and be able to prove this. In some regions these contributions may be required for more than one month. This is an important subject when wishing to apply for a work permit.

Conclusion

As every application is unique and the list of required document might vary due to legislation up-dates, you should allow 6 to 8 weeks for some registrations.

If you are marrying a Thai, or another foreigner in Thailand the marriage will only be recognised in your home country of residency if the marriage is recognised under Thai law.

The first thing to do, is to go to your embassy in Bangkok to obtain an Affirmation of your marital status. Normally your embassy will require you to make an appointment and they will likely charge you a fee for this service.

The next requirement is to get a copy of your passport translated into Thai, only the first page with your photo and personal details and also the Affirmation of freedom to marry translated into Thai.

These 2 documents then need to be certified by the Ministry of Foreign Affairs in Bangkok. This legalisation takes at least 24 hours.

If one of the couple are Thai, they would need to provide 2 copies of their ID card & house registration book.

Finally, you would need 2 people to witnesses the marriage at the recognised government office of your choice.

As a foreigner on the day of the marriage, you will receive the marriage registration certificate written in the Thai language. This you should get translated and certified by the Ministry of Foreign Affairs in Bangkok. Next you should report the marriage to your embassy or consulate in Bangkok

Check list of requirements for both parties to marry;

1. 2 copies of your passport (First page only) The first page of your passport needs to be translated to Thai & certified by MFA in Bangkok.
2. Thai nationals need 2 copies of their ID card & house book.
3. The Affirmation of freedom to marry, translated and certified by the MFA in Bangkok.
4. 2 witnesses with ID cards or passports

You should allow at least 4 to 5 days to complete the check list. The last step to getting married in Thailand is to make an appointment at the local government office of your choice.

If you wish to do something different like get married on the beach, you will need to coordinate the arrangement with the local government office to ensure the marriage is legally recognised.

Simply having a traditional Thai wedding ceromancy, won’t legally be recognised as a marriage.

The rules & regulations governing how a couple can get married in Thailand, may vary slightly by location. It is therefore advisable to contact your local Thai consulate & government office where you wish to register the marriage, before making an application.

It is advisable to get some legal advice and guidance before dealing with the Thai police, immigration or court services here in Hua Hin. Accurate interpretation is essential if you want to know all the facts concerning your situation. Although you may engage the services of a highly recommended Thai lawyer or Attorney their second language skills could be limited.

Legal Services Hua Hin is able to assist you if you are happy to use English as a second language as our staff are fluent in both English & Thai.

Too many people put off the creation of a Last WILL & Testament, believing it will be complicated, expensive, and time-consuming, but the fact is, once you contact us and start the process, you will be wondering why you didn’t do thing essential task earlier.

What makes a WILL legal?

Any adult of sound mind is entitled to make a WILL and is known as the Testator; there are just a few requirements that a Will that must fulfill:

• The Will must be signed by at least two witnesses.
• The witnesses do not need to read the content.
• The witnesses must be people who don’t benefit from the Will.
• The Testator must date and sign the Will in the presence of the witnesses.
• The executor can be a beneficiary of the Will.
• The executor must be able to communicate with government officials & offices.
• You should notify the beneficiaries when you write your Will.
• You must state wehre the Will was prepared and signed

What to include in a WILL?

• Full name, date of birth, address, nationality, passport number of the testator;
• Details of the heirs/beneficiaries
• Executor of the Will
• Two witnesses of the Will
• Desired funeral requirements if possible

At Legal Services Hua Hin we will write your WILL in English & Thai, taking into account your unique circumstances, regardless of your wealth. Our team will work with you to put at the very least a simple and valid WILL into place for your own peace of mind.

There is no jury system in Thailand; cases are decided on the merits of the evidence submitted by all parties and the judge will decide the verdict. As court hearings in Thailand are conducted in the Thai language it is recommended that foreigners use arbitration to reach a settlement and only go to court as the last resort.

A good way to avoid ever finding yourself in a dispute is to engage the services of a legal team before entering into any agreement.

The aim of our all English speaking team at Legal Services Hua Hin is to ensure all foreigners have access to free advice on a wide range of topics in confidentiality to ensure their interests come first.

Help With Buying Property In Thailand

If you are considering an investment in property in Bangkok, Chiang Mai, Phuket, Pattaya or any other city or province in Thailand there are risks. The first issue could be communication as all the official paperwork will be in Thai. This could result in a misunderstanding that could lead to possible financial loses. Then the next issue that foreigners are not allowed to own land in Thailand.

With their best intentions a Thai partner, friend or a property agent is not necessarily the right person to advise you as they may not be qualified to give you accurate translations or legal advice. It is recommended that you use a Thai lawyer who is fluent in English for the following reasons. 

• To ensure that all translations are certified as true. 
• Title Searches are made at the land office to ensure there are no encumbrances and that the seller is the legal owner of the property. 
• All options for foreigner ownership are clearly explained.  
• Contracts are prepared to protect in both Thai and English and registered with land office in accordance with Thai law.
• Money transfers from abroad are explained in full to avoid breaching money laundering laws.  

To get you started, we can over a free video call to hopefully help you avoid unnecessary risks in the future. Once we understand your plans, we can then prepare a proposal to meet your needs.