Thailand is rich in business potential for foreigners who are looking to start a business by setting up a company in the Kingdom, as well as foreign investors looking to invest due to the country’s strategic location in Southeast Asia.
If you are already the owner of an international business, you can set up a Thai branch office, a Thai representative office or a Thai regional office. This will allow you to take advantage of a variety of local business opportunities as well as possible tax advantages.
There are five business categories to choose from, which include Sole Proprietorship in Thailand, Thai Partnerships, Ordinary Partnerships, Thai Limited Liability Partnerships (LLP), and Thai Limited Partnerships.
Sole Proprietorship in Thailand makes it possible for US citizens to register with the Thai Department of Business under the US-Thailand Amity Treaty, which then allows for any US citizen to run a Sole Proprietorship in most industries.
Thai Partnerships must be registered with the Commercial Registration Office. The registration process is rather simple, with the fee being assessed at 1% of registered capital. The registration fee for Thai Partnerships ranges from 1,000 – 5,000 THB.
If your business will have two owners, Ordinary Partnerships are most advantageous. While Ordinary Partnerships are not required to register with the Commercial Registration Office, most do if they wish to be taxed as a juristic person. Ordinary Partnerships which have registered are required to submit an annual financial statement and pay corporate income taxes. If you choose not register the partnership, the income must then be reported on the partner’s individual tax returns.
A Thai Limited Liability Partnership (LLP) features two partners – the General Partner and the Limited Partner. General Partners manage the business and are liable for the partnerships financial obligations, while Limited Partners are only liable for the amount of capital they personally contribute to the LLP. These types of partnerships must be registered at the Commercial Registration Office and are taxed as corporate entities (juristic persons) based on the financial statement submitted every twelve months.
The basic Thai corporate structure is Thai Limited Companies. Governed by Thai Civil and Commercial Code, these private limited companies are not eligible for public stock offerings but can be converted to Public Limited Companies. These companies require 3 shareholders with liability being limited to the unpaid amount of the companies’ per value shares.
Thai Limited Companies must follow very strict financial requirements – annual financial statements must be certified by an auditor, approved by shareholders and then submitted for approval to the Commercial Registration Department and the Revenue Department.
Company Registration – Thai Limited Company
Registering a business and operating a company in Thailand can be difficult if you are unfamiliar with Thai laws and legal practices. Harwell International Legal Firm has extensive experience and expertise in the Thai legal system, and we are able to offer sound advice in both company registration and business setup.
The Foreign Business Act (FBA) facilitates all company formation, company registration and business operations for foreigners in Thailand. As mentioned previously, a wide variety of business structures are available to foreigners. The most popular is the aforementioned Thai Limited Company.
If you wish to register a company in Thailand, the process depends on which company structure you choose. It generally takes 5 – 7 working business days to register a Thai Limited Company. Harwell Legal International Law Firm is able to assist in this process in a seamless manner.
It is possible for a foreigner to hold shares in a business in Thailand. The Thai government excels in providing support, sufficient infrastructure and a stable work force. A wide range of government incentives are also available including tax allowances, legal working visas and work permits.
Harwell Legal International Firm invites all potential business owners for a free consultation session. During this session, we can help determine your needs and make dedicated suggestions for your new company formation. Please do not hesitate to contact us for all of your Thailand legal matters.
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