1. Thailand Limited Company

Shareholders who register for a limited company benefit from limited liability for the business’s debts, but it is important to know that the directors may have unlimited liability if the permitted documents prescribe so.

In terms of a Limited Company, there are two types, Private and Public.

Public companies are regulated by the Public Companies Act and certain other Acts.

They are owned by a minimum of 15 shareholders. Shares can only be transferred after 2 years of holding.

Private limited companies are regulated mainly by the Civil and Commercial Code.

For this type of business at least 3 shareholders must be prevalent at all times.

For both, there is no specific registered minimum capital required.

2. Thailand’s Foreign Business Act

This is the law that governs setting up foreign businesses in Thailand which were set up by his majesty King Bhumibol Adulyadej.

The full contents of the act can be found here.

It is vital to know the prohibited activities and businesses as well as the penalties upon non-compliance.

This is in reference to companies that are majority-owned by foreigners. 

3. Thailand Board of Investment (BOI)

The Thailand Board of Investment (BOI) is a Thai government division that aims to promote businesses in Thailand, specifically start-ups, with the hopes of increasing investments and boosting the Thai economy.

There are a variety of incentives and benefits offered for the applicable business which criteria can be found here.

These incentives include both tax and non-tax. 

Tax incentives: 

• Exemption of corporate income tax for up to 13 years (depending on the company’s activities and other conditions)
• A 50 percent reduction in corporate income tax for 5 years (only in special investment promotion zones)
• Exemption of import duties on raw or essential materials used in research and development purposes

Non-tax incentives: 

• 100% foreign ownership (except certain activities and industries)
• The permit to own land
• The permit to bring in skilled workers and experts to work in Thailand.

4. Applying for a Visa and Work Permits 

To enter Thailand with the purpose of doing business, you will require a non-immigrant ‘B’ (business visa).

This will ensure that you can legally work in Thailand.

The visa fee is 2,000 Baht for single-entry (with three months validity) and 5,000 Baht for multiple entries (with a one-year validity).

The application can be done through the Royal Thai Embassy or consulate in your country of origin.

SMART VISA – This is an alternative to the regular visa program.

The program was launched in February 2018 and is targeted at experts in the science and technology fields, investors, and start-ups in an attempt to accelerate the development of specific industries in Thailand.

More information on the Smart Visa including the industries targeted and how to apply can be found here.

Smart Visa holders are permitted to stay in the country for a maximum amount of four years, are exempt from work permit requirements, and have access to other privileges.

5. Register Your Company

The registration process for your company can be divided into three sections.

Reserving a company name

The reservation of the company name can be done online at the Department of Business Development (DBD) website.

The application for name reservation is normally approved within 1-3 days.

Once the company name has been approved, it is only valid for 30 days and no extension is permitted.

Preparing the necessary documents

The documents required depends on the type of business that you plan to set up.

The required documents may include the Memorandum of Association which includes:

• The name of the proposed company
• The proposed registered office of the company in Thailand
• The company objectives
• A declaration that the liability of the shareholders will be limited
• The amount of share capital with which the company purposes to be registered and the divisions thereof into shares;
• The names, addresses, occupations, and signatures of the promoters and the number of shares subscribed to by each of the promoters

An application form and list of shareholders, director forms signed by each director of the company, Declaration of Business Operation form, and the details of the offices and branches of your business, among others.

You will also require a company stamp to act as a company signature for business activities.

Registering the company

This can be done at the business registration office where your company is located.

A taxpayer identification number will also be provided to you.

Registration of a company usually takes around a week for private companies and a month for public companies.

Registration through the Treaty of Amity (US citizens)

The US-Thailand Treaty of Amity is an agreement that allows American-owned companies or entrepreneurs to have a majority or full ownership of a company in Thailand.

The details regarding the agreement can be found here.

6. Open a Bank Account to Organize your Capital

After you have successfully registered your company you will be able to open a corporate bank account in Thailand.

At first depending on the size of your company the banks may only offer a savings account for your company in which you can use to make withdrawals only.

You will also not have access to an ATM card.

A withdrawal slip must be provided to the bank with your signature and company stamp in which the bank will write a corresponding check by request.

Your clients must either be paid in cash or transferred funds at the bank.

Consider using a digital business account instead if this process is too inconvenient for your new Thai business.

7. Pay your taxes

When your company is up and running you will have to pay Corporate Income Tax.

This is a requirement according to the revenue department. This is a direct tax levied on companies or partnerships that are carrying our business in Thailand or obtaining certain types of income from Thailand.

Full information regarding Corporate Income Tax (CIT) can be found here.

Although doing business in Thailand may be easier, cheaper, and more efficient than in other countries, there are still responsibilities, laws, and requirements you’ll need to gather before entering the Thai market.

How Much Does it Cost to Start a Business in Thailand?

Before we get into the detail of the steps to set up your business it may be an important factor to consider the costs.

As with a lot of things we cannot give an accurate figure as the costs of starting a business vary on many different factors such as the size, type, and location of the business.

However, it can be safely said that for the majority of foreigners opening a company will be cheaper than doing so in your home country.

This is reflected in Thailand’s cost of living ranking which according to The Mercer Human Resource Consulting Cost of Living Survey Worldwide Rankings 2019 showed that the city of Bangkok in Thailand received a ranking of number 40.

As 8 of the top 10 most expensive countries to live in are in Asia, Thailand is an excellent alternative to enter the Asian market.

The board of investment (BOI) offers a useful chart outlining the typical costs of starting and operating a business in Thailand which can be found here.

If you already have an existing business registered in Hong Kong, thinking of expanding your business to Thailand, or you’re looking for a payment solution for your business, open a business account with Statrys and get access to 11 currencies today.