Foreigners Guide to Opening a Business in Thailand?
Learn about the various guidelines for foreign nationals who want to start a business in Thailand.
Select the type of company you want to establish
According to Thai law, you have four options to choose from, depending on your goals. You may need to consult a local lawyer to deal with the complications and time it takes to set up your ideal company or investment. We may recommend someone who has specialised knowledge and professionalism. The categories are as follows:
1. Limited Company – The most common choice for international investors where shareholders may only own a certain number of unpaid shares. They must split their money into shares under Thai law and the company must be registered by at least 3 promoters and shareholders.
The company will need a director, an auditor, and a registrar, all of whom will be in charge of drafting the Memorandum of Association. The responsibilities of a promoter include handling accounting activities outlined in Thailand’s Civil and Commercial Code and Revenue Code, as well as submitting annual balance sheets to the appropriate authority. Because foreign ownership is limited to 49%, this type of company may appeal to foreign investors. The nationals will receive 51% of the prize money. On behalf of their employees, the company’s directors can apply for work permits.
2. Board of Investment Promotions – Global entrepreneurs who wish to own 100% of their company will do so by joining the Thailand Board of Investment. This Board supports a small group of international companies that aid with visas and work permits. Corporate taxes are also waived for these businesses but determining which international companies to promote, the Board is directed by strict guidelines.
Foreign companies must apply for BOI promotion just be mindful that the process will take a long time. If you are lucky enough to be chosen, you will be expected to provide the Board with a monthly status report in order to maintain your status. Obtaining the assistance of a business lawyer or an accounting firm, for this reason, would also be beneficial.
3. A sole proprietorship – This form belongs to and is recorded in the name of a single person and performs the function of operator. It will be difficult to implement this form if a foreigner’s company does not qualify.
4. Partnerships & Unregistered Ordinary Partnership –
Ordinary Partnership (Licensed) – This form of partnership is registered with the appropriate authority and has legal standing as well as legal rights, obligations, and liabilities that are distinct from those of its partners.
Limited Partnership – There are two types of partners in this subtype: unlimited liability partners and limited liability partners. The infinite liability partner bears absolute and indefinite responsibility regardless of the sum of his partners’ contributions. The liability of the limited liability partnership is limited to the sum of his partners’ 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), 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 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 licenses you need are determined by the type and size of your company.
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 will operate 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 your company is attached to an office space or your staff is too big to operate from home, this is the other alternative.
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: An 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 a work permit is required. 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. If you are promoted by the BOI, you are excluded from this requirement.
Create a bank account for your company
You can choose a bank that meets your specific needs and preferences once your business has been licenced. 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 been in business for a while, you may want to consider getting a credit card from your bank. Unsecured credit cards are issued to foreign businesses that have been in business for less than a few years. This requires them to deposit the entire amount in the bank as collateral.