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back to index backASIAtalk July,  2005

Thailand: What are the legal requirements for establishing a company?

Three basic forms of corporate structure are recognized in Thailand: Sole Proprietorship, Partnership and a Limited Corporation. In addition, foreigners can register a company as a branch office, representative office, regional office or joint venture. You should seek the advice of legal and/or tax counsel to determine the most suitable type of business organization.

Initial discussions with a lawyer or tax consultant can be useful not only for information regarding business registration, but also because they can offer advice on special licenses or registrations that might be necessary for a particular product or industry. For example, restrictions exist on a variety of imports and export items such as some agricultural products, pharmaceuticals, and cosmetics. Special licenses may be required from the appropriate Thai Government ministry before trading in these products can be undertaken.

While other forms of business entities are recognized in Thailand, a private limited company is the most commonly used vehicle for conducting business by foreigners. Application for registration of the company must be made to the Commercial Registration Department of the Ministry of Commerce or relevant Provincial Registry.

For a straight-forward corporate business registration, international firms can prepare the necessary documentation and register the new business with the Ministry of Commerce for between US$1,200 to $2,500, excluding filing fees and some other charges. Filing and consultants fees depend on the amount of the company's registered capital. The process usually takes three to five weeks.

Formation of a limited company requires five steps:

  1. The company name must be registered with the Ministry of Commerce.
  2. The filing of a Memorandum of Association (MOA) must be undertaken. The names of at least seven shareholders must be provided in the MOA.
  3. A statutory meeting must be held.
  4. The Directors must file a company registration application with the Ministry of Commerce.
  5. The company must obtain an income tax identity card and number from the Revenue Department.

Additional points to note regarding company formation are:

  • There are no limitations on registered share capital; in practice, a minimum of Bt3 million is advisable. If a company has an authorized and paid up capital of less than this amount, it could have difficulty in obtaining work permits for foreigners.
  • A representative or regional office structure may be beneficial for companies engaged in "non-trading" activities. Such companies may obtain expedited visas and work permits.
  • For setting up an export-oriented company, the Board of Investment promotion programs can offer significant benefits. Please call BOI for eligibility criteria for promotion privileges.
  • For American companies, registration as a Treaty of Amity company may also be worthwhile. The Treaty filing is separate and in addition to the company formation/ registration process.

Source: Thailand Ministry of Economics and U.S. Commercial Service - GAI

To download a free copy of the "Doing Business in Thailand" Guide, click here.

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