The economic progress in Thailand has attracted foreign investors since the time that globe-trekking backpackers “discovered” the beauty and potential of the country in the late 1970s. Thailand's unprecedented economic growth is partly due to the adequate nationwide infrastructure and competent workforce, which are strongly backed by the government.
Thailand has become one of the top tourist destinations in the world that small and big time investors are keen on doing business in Thailand. Whether an investor supplies services or products, the increasing market demands of the country and the nation's policies regarding free trade and economic liberalization promise a very profitable return of investments for foreign and local investors. Aliens cannot own properties in Thailand.
Business Structures in Thailand
There are three primary business registrations in Thailand: Partnership; Limited Companies and Representative Office.
Thai Partnership includes three standard types of partnership such as limited partnerships, registered ordinary partnerships and unregistered partnerships.
Limited Companies are comprised of private limited companies and public limited companies. The former falls under the Civil and Commercial Code of Thailand while the latter is regulated by the Public Company Act. Private limited companies require a minimum of seven shareholders that could all be aliens while public limited companies require at least fifteen promoters for the formation and memorandum of this type. Registration to the Stock Exchange of Thailand (SET) is mandatory. Joint Venture pertains to a group of people entering into an agreement to do business, but is yet to be recognized as a type of its own.
Representative Office is limited into dealing with non-profit activities such as: sourcing for suppliers of goods and services in Thailand for export; quality and quantity control of products to be exported to a company's headquarters abroad; reporting of Thailand's economic trend or movement to the headquarters and more.
Steps to Business Registration in Thailand
An applicant must reserve a company name. This can be done on the website of the Department of Business Development. The Thai government has a limiting factor on business names that must be observed. Business name registration is good for only 30 days.
The second step is the filing of the memorandum of association at the Department of Business Development office. This also includes the reserved company name, business location, objectives of the business, start-up capital (and the number of shares and its value) and names of the required number of promoters.
The third step is for the promoters to call a legal or statutory meeting to work on the articles of incorporation and by-laws. The board of directors is then elected and an auditor, appointed. At least 25% of each promoter's subscribed share must be fully paid.
Registration of the Thai business must be done within three months from the statutory meeting date. To date, the minimum business registration in Thailand is 5,000 baht with the maximum set at 250,000 baht.
All business with liability for income tax payment is required to procure a tax I.D. from the Revenue Department within 60 days from the start of business operations or incorporation. A VAT (Value Added Tax) registration is mandatory for businesses with earnings of 600,000 baht per year within 30 days when the said establishment break the 600,000 baht sales limit.
Work regulations presented by a business with 10 or more employees to the Department of Business Development is forwarded to the Office of Labor Protection and Welfare of the Ministry of Labor in the district where the head office of the business is to be located. Most applicants get the services of a Thai lawyer as based on the Labor Protection Act B.E. 2541, the business owner must write the business regulations in Thai. This procedure alone could take up to 4 months.
Business registration in Thailand is not that easy as there are several pertinent legal precedents that the applicant/employer must comply with. The procedure could take several weeks to be done. If you are keen on registering a business in Thailand, it is to your advantage to hire the services of Servcorp to facilitate a trouble-free business registration.