Foreigners Guide to Opening a Business in Thailand?
Learn about the various guidelines for foreign nationals who are starting a business in Thailand.
Select the type of company you want to establish
According to Thai law, you can choose from four options when opening a business in Thailand, depending on your goals. It’s advisable to consult a local lawyer to navigate the complexities and time required. We can recommend professionals with specialised knowledge.
1. Limited Company – This is the most common choice for international investors, where shareholders own a limited number of unpaid shares. You must split the money into shares, and the company must be registered by at least three promoters and shareholders. Key roles include a director, auditor, and registrar responsible for drafting the Memorandum of Association and handling accounting activities per Thailand’s Civil and Commercial Code and Revenue Code. Since foreign ownership is limited to 49%, this option appeals to foreign investors. Thai nationals receive 51% of the shares. Directors can apply for work permits for employees.
2. Board of Investment Promotions (BOI) – Global entrepreneurs who want 100% ownership must join the Thailand Board of Investment. This board supports select international companies with visas and work permits, and it waives corporate taxes. However, the BOI has strict guidelines for selecting companies. The application process is lengthy and requires monthly status reports if you’re chosen. Getting help from a business lawyer or accounting firm is beneficial.
3. Sole Proprietorship – This form, owned and recorded in the name of a single operator, is challenging for foreign companies to qualify for.
4. Partnerships & Unregistered Ordinary Partnerships
– Ordinary Partnership (Licensed) – Registered with legal standing and has distinct rights, obligations, and liabilities separate from the partners.
– Limited Partnership – Consists of unlimited liability partners and limited liability partners. The former has absolute responsibility; the latter’s liability is limited to their contributions.
Key Points
- Unless it is part of a special Board of Investment scheme, the majority of shares in a Thai company must be owned by Thai citizens.
- Thai limited companies are the most basic corporate structure in Thailand, and they must follow strict financial regulations.
- The most common way to start a business in Thailand is to register it under a Thai name.
Get your company incorporated
You must register your business with the Department of Business Development (DBD) when you are opening a business in Thailand, meet the qualifications and submit the documents at any of the DBD’s offices. For the convenience of most applicants, these offices are distributed across Bangkok and are centrally located. If you qualify and are licensed, but later need to make adjustments, you must do so at the DBD branch closest to your place.
Create and register your company in Thailand
The protocol can be difficult to follow but you can solve obstacles by following it in a systematic manner to ensure that your company name does not already exist in Thailand, you can book it first. Prepare all registration papers, including a list of shareholders’ names, minutes of the meetings, and proof of share capital payment.
You can register your business with DBD by following the steps outlined there. Since the forms you must fill out are in Thai, learning how to read and write in Thai is beneficial or you may seek the assistance of a Thai lawyer or another appropriate professional.
After that, you’ll need to register for VAT and obtain any required licenses for your line of business.
Obtaining licenses – The type and size of your company determine the licenses you need.
Apply for VAT – When your business receives more than 1.8 million baht in annual sales, you must apply for VAT. It is essential for you to apply for it at the local Revenue Department.
Applying for other licenses – If you are opening a business in Thailand such as operating a restaurant (license for liquor and music), shipping company (an import and export license) and importing food and drugs for your business in Thailand requires an FDA license. If you’re unsure about the validity of the licenses you need, you’ll need to consult with a lawyer or an accounting firm.
For foreigners who want to start a business or register a company in Thailand, the Thai government offers ample funding, adequate infrastructure, an efficient workforce and a variety of government incentives ranging from tax breaks, visas and work permits.
Look for a suitable office space
A serviced office space or a conventional office space are both options for you. If you don’t want to deal with the hassles of setting up your own office, a service office space could be a better option. Furniture, phone and internet accounts and installations as well as refreshments for workers, housekeeping staff and equipment are all included in these details. You simply sign a contract, bring in your basic and portable equipment and you can begin working on the same day with a serviced office.
Building and operating a typical office is unquestionably more complex, challenging and costly. You’ll need to put money into the property, set up phone and internet service and employ a building administrator to manage the day-to-day operations and affairs.
If you have a solid business plan and sufficient funds, Thailand has a lot of potential for you to start a successful business.
Make an application for a visa and a work permit
Visa applications – A visa firm will take care of the paperwork for you. Copies of your business registration, a letter from your local labour industry, a letter from your Thai company partner offering jobs, a list of documents available at the Thai embassy, and a $20 fee for the agent who will double-check your documents and attach them to your application are all included in a non-immigrant visa application.
Obtaining Work Permits – A non-immigrant B visa does not grant permission to work in Thailand, as they are asking for a work permit. Your employee will need to travel to Thailand to apply for a work permit. A work permit allows four Thai employees to work in your company per foreign applicant as well as two million baht in the capital.
Create a bank account for your company when starting a business
You can choose a bank that meets your specific needs and preferences once your business has been licensed. To complete this task, you will need your accounting team or accounting firm to recommend a suitable bank or introduce you to the bank manager, and you will need to request that your bank set up or provide you with the proper banking account.
If you’ve operated your business for a while, you should consider applying for a credit card from your bank. Moreover, banks issue unsecured credit cards to foreign businesses that have been operating for less than a few years. This requires them to deposit the entire amount in the bank as collateral.