• Pro Legal Services TH

How Can I Set-up a Business in Thailand?

We get asked this all the time.

It's one of the most popular inquiries at our law firm. It’s not only possible to open your own business here, but both Thai nationals and expatriates do it all the time. In December 2019, there were 3,156 new businesses registered in Thailand – and that’s a downslope month for 2019.

Foreigners flock to Thailand, but when the cash flow runs out, reality strikes a cruel chord - time to pack up and go home. Finding a way to earn a living and thrive in Thailand is what setting up a business is all about.

For Thai citizens, it’s about breaking beyond economic barriers, capitalizing on a creative innovation or idea, and championing a better life for themselves and their families.

The procedure to open a business here is like anything else: meet the prerequisites and follow the process.

Pro Legal Services will explain and handle every step!

There is a trove of articles on the internet that describe the process.

A better question people need to ask themselves is …

What kind of company should I start in Thailand?

Selecting the right type of business will either set you on a trajectory of growth or

stagnation. There are several options to begin a company here or to open an office of an international business. After you read this article, you should have a better idea of what course of action to pursue.

Here are the typical types of companies in Thailand:

Limited Company – Open in 1 Week

These businesses limit liability to the amount shareholders initially invested in the company. A considerable benefit of a limited company is the rights and obligations of all parties are clearly defined, written, and legally binding.

So, everyone has a thorough understanding of their role in the company. This is unlike some sole proprietorships or partnerships in which roles and privileges aren’t always specified.

Limited companies are the preferred types of companies for most business owners because they have many of the same operations as companies in developed countries.

There are two types of limited companies:

1. Private Limited – Investment in the company is limited to a small group of shareholders.

· Must have at least three promoters age 12 or above that become immediate shareholders.

· Shareholders must own at least one share in the company upon its registration.

· Shareholders do not have to reside in Thailand.

· Must have at least one person on the board of directors.

· Potential to be wholly owned by foreigners.

2. Public Limited – Established to offer shares in the company sold to the public.

· Must have at least 15 promoters age 20 or above that are immediate shareholders.

· Shareholders must pay a share price of at least 5% of the company’s registered capital.

· Shareholders must provide an address inside of Thailand.

· Must have at least five people on the board of directors, with half residing inside of Thailand.

BOI Company – Open in 3 Month to 1 Year

Foreigners that want to open a business in Thailand meet many hurdles and stumbling blocks. That’s because the Thai government has set up regulations to hinder foreigners from competing with Thai citizens for work.

There are, however, specific industries the government incentivizes, so foreign companies are willing to open and operate in Thailand. There are quite a few business activities that qualify under the Board of Investment (BOI) law. You can find a list of them here.

Pro Legal Services will interpret your line of business and tell you if you’ll qualify for BOI promotion.

If your company qualifies for (BOI) promotion, you are entitled to a wide range of benefits, including:

· 100 % Foreign ownership – applicable for most business types

· Visas & Work Permits – bring experts and skilled workers in with their families

· 0% Tax – Up to 15 years exemption of Corporate Income tax

· Foreigners Can Own Land

BOI Company Vs. Limited Thai Company

Branch Office of Foreign Companies - Open in 2 Weeks

Foreign companies can carry out business in Thailand through a branch office, but they are required to handle business activity only in Thailand. International companies have to follow a generally accepted procedure to start their branch office:

· Must apply for a Foreign Business License.

· There must be one branch office manager living in Thailand that is appointed to delegate responsibility and circumvent liability.

· Must remit a specific amount of capital to Thailand to begin business operations.

· Must prepare and submit account and financial statements to the Department of Business Development.

· Total loans must not exceed seven times the remitted amount for business operations.

International Headquarters (IHQ) - Open in 3 Months to 1 Year

A company incorporated under Thai laws that provide any of the following activities to its branches or “associated enterprises” whether located in Thailand or overseas.

Supporting services engaged in:

· General management, business planning, and business coordination

· Procurement of raw materials and parts

· Research and development of products

· Technical support

· Marketing and sales promotion

· Human resource management and training

· Financial advisory services

· Economic and investment analysis and research

· General management, business planning, and business coordination

· Any other supporting services stipulated by the Director-General of the Revenue Department

· Financial management, including: Financial management by corporate treasury centers approved under the Exchange Control Law Borrowing and lending in Thai Baht for the following cases: Financial management by corporate treasury centers approved under the Exchange Control Law.

IHQ companies are governed by BOI law and enjoy a variety of incentives:

· Permission to bring in skilled personnel and experts

· Permission to own land

· Exemption of import duty on machinery

· Exemption of import duty on raw materials and parts for export purpose

· Revenue subject to corporate income tax exemption up to 15 years

· Personal income tax for expatriates at the specialist or executive level working in an IHQ is reduced to 15%.

There are conditions to apply for the BOI incentives:

· Must supervise associated enterprises in foreign countries or its foreign branches in at least one country

· The paid-up registered capital must not be less than THB10 million

Do you have any questions? We bet you do!

The nuances of how to set up each type of company and meet the criteria are convoluted. Lean on our expertise to guide the way to opening your company in Thailand.

Pro Legal Services takes great pride and pleasure helping every business owner start a company fast and effectively.

Call us today to begin the journey into an exciting new realm of business in the Kingdom of Thailand.

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