There is no question about it. Thailand is one of the most popular locations in the world to travel to or live in. The dream of living in a tropical paradise is in many different people’s mind – no matter from which corner of the world they have their origins. When talking about tropical paradise, Thailand always comes up on the top 3 of countries to be relocating to if the possibility arises. Understandably so. From the rich culture, the kind and open-hearted people, the flamboyant lifestyle, the white-sanded beaches, the nightlife – Thailand is a true haven when it comes to work-life balance.
Not many can afford to retire just yet though, and many are still in the midst of their careers. One could, of course, wait for the much-awaited retirement, but others, and perhaps also you, reading this article, may not want to wait that long before making the move. Perhaps, you even have a great business idea that you find ripe for the Thai market. No matter your motivation for considered to be starting a business in Thailand, we have dedicated this article.
Can a foreigner own a business in Thailand?
Founding a business in Thailand may help a foreigner to live in Thailand, purchase property or simply to be working there. Even the Thai government would welcome the building of new businesses to earn income and to contribute to the Thai economy.
Under normal circumstances, comparing to Western standards however, a foreigner cannot truly own a business in Thailand to a 100%, extent.
The process involved in establishing a business in Thailand can seem as quite complicated. Fear not though, there are many exceptions and possibilities in order for a foreigner to fulfill their dream of living and working in Thailand. Read on. We will sum up the necessary steps and procedures below.
Note: In order to open or buy a business in Thailand many forms are required to be filled and submitted, in Thai, to multiple government agencies. We therefore highly advise the assistance of a Lawyer that is fluent in both Thai and English.
Before we go further, we’d like to mention that under normal circumstances, a foreigner can only own up to 49% of a business, with the majority of a business required to be owned by a Thai citizen (the remaining 51%), unless it is part of a special Board of investment (BOI) program.
Also, in order to work in Thailand, you need a work-visa, which we also can assist you with attaining. We’ll gladly guide you through all the paperwork and requirements in this process.
The 49% ownership limit can be exceeded or exempted if a foreign business license is granted. A foreign business license is generally granted to foreign owned businesses that are unique and do not complete with other Thai businesses, based on a large investment of money, a high number of Thais employed and/or exceptionally strategic transfer of technology to Thais.
What types of corporate entities are there in Thailand?
Before you register your business in Thailand, it’s important to consider which company structure will best suit your specific needs. There are several different options:
- Sole trader
- Partnership (unregistered, registered or limited)
- Company (public or limited)
- Joint venture
We’ll go through each of them below.
The sole trader structure, as elsewhere in the world, is intended for those looking to work alone. In Thailand, there are some professions in which a sole trader is prohibited from working, specifically in banking and finance. By law only limited companies can do this type of work.
Whether or not you’re able to set up this sole trader business structure in Thailand, will also depend on your nationality. A US citizen, for example, is able to set up a sole proprietorship business because of the Treaty of Amity between Thailand and America. Other nationalities may find some business areas are restricted to them.
If you’re thinking of setting up a partnership with others, you can choose one of several different structures. An unregistered partnership means that you and your partners are jointly liable for any debts incurred. Your personal and business tax affairs are considered as one. A registered partnership, on the other hand, splits your personal and professional tax matters by registering your business as a separate entity. You’d still be liable for the full amount of any debt incurred. A limited liability partnership is a popular option because it means that the tax and debt liability of any of the partners is limited to the amount of capital invested.
If you’re setting up a partnership, all partners must contribute something to the business, such as labour or capital for example.
Company (public or limited)
Companies in Thailand can be set up as either private or public businesses. These structures are covered by different legislations and rules. There are registration fees based on the initial investment made, and minimum numbers of directors and shareholders required.
If one or more of these requirements are fulfilled, a foreigner is entitled to legally own a business in Thailand.
The ‘don’ts’ when it comes to buy a business in Thailand
Most of the serious problems we hear about when attempting to buy a business in Thailand, come from people who are widely inexperienced in doing business, don’t have a trustworthy and experienced business partner, get into trouble following tricky and dodgy guidance, and/or don’t do the proper research and work in their particular field or specialization.
Your success or difficulty will mostly depend on things like:
- The market for your services and/or goods
- Your research
- Any licenses required for your goods (especially things like foods requiring an FDA approval process)
- Your general experience and ability to do business
- Your partner(s), if any
- The quality of the staff you hire
- Your peer group and guidance
- And most importantly, having a good legal staff at your disposal
We, from Harwell Legal will gladly guide you through the whole process and take care of all necessities without any struggle or complications on your side.
With our years of knowledge and experience on our backs, we know and understand the exact steps required in the process and will make sure you will receive everything you need to start your dream of becoming your own business owner in Thailand.
Our staff is fluent in several languages and you can expect fast and reliable results.
The Treaty of Amity
Treaty of Amity and Economic Relations is an exclusive agreement between Thailand and the USA. Signed on May 29th, 1968 it gives US citizens the right to own 100% of a company in Thailand and vice versa.
You will need a lawyer to help you facilitate and navigate the technical rules involved in opening up a business under the Treaty of Amity. It goes without saying, of course, that you will still need a Thai national on your side. One you can wholeheartedly trust with your best interest in mind.
Starting a company under the Treaty of Amity costs twice as much compared to starting one of other corporation types mentioned above.
Businesses foreigners can’t own
There are several businesses a foreigner can’t currently own in Thailand.
- Newspaper publishing, radio or television broadcasting
- Rice farming, arable farming or orchard farming
- Rearing livestock
- Forestry and the processing of wood from forests (naturally grown)
- Fishery, only in relation to marine life in Thai waters and the specific economic zone
- Extraction of Thai medicinal herbs
- Trading and auctioning of Thai antiques or antiques which are of historical value to the country
- Manufacture or casting of Buddha images and alms bowls
- Trade in real property
With Harwell Legal, you are on the safe side
There are many things you, as a foreigner, have to beware of when striving to open your own business in Thailand.
With the right partners on your side, this dream can become your reality faster than you may thing though.
We, from Harwell Legal, are specialized in working together with foreigners.
We’ll gladly help you with all your legal needs!
Phone: +66 (0) 76 530 597
FAX: +66 (0) 76 530 598
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