In Thailand, there are three common business structures: partnerships, limited liability companies (LLCs), and joint ventures. We will briefly explain each of them below.

partnership

Thai and Western partnership concepts are broadly similar. In Thailand, there are three general types of business structures:

  • Unregistered ordinary partnerships in which all partners are jointly and severally liable without limitation for all liabilities of the company.
  • Registered partnerships. Upon registration, the partnership becomes a legal entity, separate and independent from its individual partners.
  • Limited partnerships. The liability of each partner is limited to the amount of their capital contribution. Limited partnerships must be registered.

    • Limited liability companies

    There are two types of corporations: private or closely related companies and joint-stock companies. The former are governed by the Thai Civil and Commercial Code, the latter by the Company Law.

    Thai private limited companies share similar basic characteristics with Western companies. The formation of such a company is achieved through the registration of articles of association (Memorandum of Association, Article of Incorporation, and Articles of Association, By-laws) as founding documents.

    The liability of shareholders is limited, i.e., restricted to the outstanding amount of the nominal value of their shares. However, the liability of directors may be unlimited if provided for in the company's articles of association or bylaws. The limited liability company is managed by a board of directors in accordance with the company's articles of association and bylaws.

    All shares must be subscribed, and at least 25 percent of the subscribed shares must be paid in. Both common and preferred shares may be issued, but all shares must carry voting rights. Thai law prohibits the issuance of shares without par value. It also stipulates that only shares with a par value of at least five baht may be issued. Treasury shares are prohibited.

    There must always be at least seven shareholders. A private limited company can be wholly owned by foreigners. However, for activities reserved for Thai nationals, foreign ownership is generally limited to a maximum of 49 percent.

    The registration fee for a private limited company is 5,500 baht per million baht of capital.

    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 the listing of their securities on the Stock Exchange of Thailand (SET).

    A minimum of 15 founders are required to establish and register the articles of association of 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. The shares must have a nominal value of at least five baht and be fully paid up. Restrictions on share transfers are not permitted, except those legally permissible and designed to protect the rights and benefits of the company or to ensure the balance between Thai and foreign shareholders. Bonds may only be issued with the approval of three-quarters of the voting shareholders.

    The registration fee is 2,000 baht per million baht of capital for a public limited company.

    Joint Venture

    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.

    Other forms of corporate presence

    In addition to the corporate structures common in Thailand, further legal forms can be established in accordance with the provisions of the Thai Civil and Commercial Code. These further forms of corporate presence are:

  • branch of a foreign company
  • Representative office in Thailand
  • Regional trade and investment promotion offices

    • Contact us

    Contact our corporate lawyer in Thailand to learn more about the appropriate corporate structure for your business. Our expert team will ensure a smooth and efficient company registration process in Thailand.

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