Thailand's continuous economic progress is due to a well-developed infrastructure and a skilled workforce, both of which receive extensive government support. If you are planning to start your own business in Thailand, it is advisable to seek legal advice from an experienced lawyer to clarify all legal aspects of setting up a company under Thai law.

Setting up your own business in Thailand is subject to specific legal requirements and can take several weeks. Simplify this process by enlisting a trusted lawyer to handle all communication. With the right legal advice, you can avoid unnecessary mistakes and delays.

For your information, the following are the different company structures and the necessary steps for starting a company.

Types of corporate structures

Thai and Western partnership concepts are broadly similar. In Thailand, there are three general types of partnerships: unregistered ordinary partnerships, registered ordinary partnerships, and limited partnerships.

There are two types of corporations: private or closely affiliated companies and joint-stock companies. The former are subject to the Civil and Commercial Code, the latter to the Stock Corporation Act.

Thai limited liability companies (LLCs) share fundamental characteristics similar to those of Western companies. An LLC is established by registering its articles of association (Memorandum of Association, Articles of Incorporation, or Statute). A minimum of three shareholders is always required. An LLC can be wholly owned by foreigners. However, for activities reserved for Thai nationals, foreign ownership is generally limited to a maximum of 49 percent.

Public limited companies registered in Thailand may, subject to compliance with the prospectus, approval, and other requirements, offer shares, bonds, and warrants to the public and apply for listing of their securities on the Stock Exchange of Thailand (SET). A minimum of 15 founders is required to establish and register a public limited company. These founders must hold their shares for at least two years before they can be transferred. The board of directors of a public limited company must consist of at least five members, at least half of whom must be Thai nationals.

A joint venture can generally be described as an association of natural and/or legal persons who enter into an agreement to conduct business together. It is not yet recognized as a legal entity under the Civil Code. However, the income from the joint venture is subject to corporation tax under the Tax Code, which means it is treated as a single entity.

A branch office may only engage in limited non-profit activities. To establish a branch office, at least one of the following purposes must be pursued for the limited "non-commercial" activities:

  • The company's task is to find sources of goods or services in Thailand for its foreign headquarters;
  • To check the quality and quantity of products ordered from the headquarters abroad;
  • Advice regarding the goods sold by the head office to representatives and consumers;
  • To provide customers in Thailand with information about the products of the headquarters;
  • To report the economic developments in Thailand to headquarters.

    • How to start a business

    STEP 1: RESERVING THE COMPANY NAME

    The name to be reserved must not be identical to or very similar to the name of another company. Certain names are not permitted. Therefore, the guidelines of the Ministry of Trade, Department of Economic Development, regarding name reservations must be observed. The approved company name is valid for 30 days.

    STEP 2: SUBMISSION OF THE BYLAWS

    Articles of association to be submitted to the Ministry of Economic Development must include the name of the company that has been successfully reserved, the province in which the company will be based, its business objectives, the capital to be registered, and the names and information of the founders.

    The capital information must include the number of shares and their par value. At the time of incorporation, the authorized capital, even if partially paid in, must be fully disbursed. Although there are no minimum capital requirements, the amount of capital should be reasonable and sufficient for the planned business operations.

    STEP 3: REQUEST A LEGALLY MANDATORY SESSION

    Once the share structure is determined, a general meeting will be convened to adopt the articles of association and rules of procedure, elect the board of directors, and appoint an auditor. At least 25 percent of the nominal value of each subscribed share must be paid in.

    Company registration takes place at the Economic Development Office. Depending on the individual case, this can take one to three days. The registration period can vary depending on the type of planned business activity, the founders' cooperation in preparing the necessary documents, and the availability of the managing directors to sign the incorporation documents.

    Companies subject to income tax must apply for a tax identification number from the tax office. If the company's gross profit exceeds 1.8 million baht in the same financial year, it is generally subject to value-added tax (VAT).

    The limited liability company must prepare annual financial statements on a monthly basis every twelve (12) months. These statements must be audited by at least one certified public accountant and submitted to the ordinary general meeting for approval within four (4) months of the balance sheet date. The financial statements must be filed with the Business Information Service Office, Department of Business Development, or a provincial economic development agency within one month of their approval, even if business operations have not yet commenced or have been temporarily suspended.

    Specifically, section 1206 of the Civil and Commercial Code contains the following provisions regarding the accounts to be kept:

    The company is also required to submit financial reports and VAT returns to the tax office.

    For information and support in setting up your business in Thailand, please fill out the form below and send it to us.