SETTING-UP A THAI LIMITED COMPANY
By: Magna Carta Law Office
Starting a new business in Thailand can be very complicated due to language barriers and may take several days to complete the entire process. As all the legal documents are in Thai, completing these forms without the knowledge of its contents as well as the Thailand Law can lead to serious complications and other problems that will affect you and your business. That is why it is essential to look for trusted lawyers and advisors with legal qualifications and practical experiences who can give you an extensive guide and advice on which way your company should be structured, whether you are setting up your company for trading purposes or buying properties.
Businesses can be incorporated as sole proprietorships, limited and unlimited partnerships, private limited companies, and public limited companies. A limited company is that kind of which is formed with a capital divided into equal shares. Unlike Sole Proprietorship wherein the owner has unlimited responsibility for all the liabilities of the business, Limited Company limits all the liabilities of the shareholders to the unpaid amount of the shares subscribed by them. In most cases, Thai Limited Company is the most popular structure and ideally the first step in setting up a new business in Thailand.
The structure of a Thai company has to consist of 1 or more director and a minimum of 3 shareholders which can either be Thai or foreigner. In Thai Limited Company shareholding, the company must be majority owned by Thais. This means that foreign ownership of the company cannot be more than 49%.
REQUIREMENTS AND PROCEDURES
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Name reservation should observe the guidelines of the Business Development Office in the Ministry of Commerce. The proposed name shall be approved upon confirmation that it is distinct from any other registered company names.
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Your company will need a registered office address in Thailand. This will determine what relevant government agencies you should be interacting with. Registered business address is also necessary before the company can apply for a Tax Registration Number.
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A limited company in Thailand can be set up with only a few thousand Baht; however, the average declared capital is 1M Baht. Should the company intend to employ foreigners who are required to secure a work permit; the company must have a minimum paid up capital of 2 Million Baht for every foreign employee.
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A memorandum of Association must be filed with the relevant Thai authorities once the name has been approved. This is a document that regulates the company's operations and external activities.
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Convene the first shareholders meeting to make all the necessary appointments, which must take place within a given time after it is formed.
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The articles of association of a Thai limited company together with the memorandum of association form the constitution of the company. The articles of association administer the internal affairs of the company and define the rights and responsibilities among the Thai or foreign shareholders and the kind of business to be undertaken.