If you wish to open a business in Thailand and do not reside there, you have to learn more about the process of setting up a company. By establishing a business as a foreigner, you can buy property and live and work in Thailand. Therefore, this type of activity offers a number of opportunities for foreign investors in terms of lifestyle and wealth.
If you plan to implement a company registration in Thailand, you need to learn the rules for foreign nationals. You simply cannot buy a business. Things are a bit more involved than that. In Thai companies, residents or Thai citizens must own most of the shares.
What the Law in Thailand Says About Business Formations
A business must be owned by a citizen of Thailand unless the company is part of a BOI program or Board of Investment setup. In this instance, a foreign business owner can own up to 49% of a Thai organization. This 49% restriction can be lifted if the owner receives a foreign business license. Foreign business licenses are normally issued to companies that do not compete with Thai companies.
A Common Business Entity in Thailand
You can set up a Thai business in one of various forms. For instance, the most-used form is called a private limited company. This type of business allows directors to have unlimited liability while shareholders have limited liability. A private limited company requires three promoters who are either from Thailand or another country. The promoters must be actual persons who own shares in the business.
Reserving a Business Name
If this type of business is formed, the promoters first reserve the company’s name with Thailand’s Department of Business Development (DBD). Promoters must supply at least three names, which are not similar to current reserve names and do not conflict with ministry mandates. After this action, the DBD chooses one name from the three choices.
Filing a Memorandum
After this action, the promoters of the foreign business have to file a Memorandum of Association. This is done by going through the Commercial Registration Department. The Memorandum includes the business name, the value and number of company shares, and the promoter’s name. Following the submission of the Memorandum, a meeting is scheduled to set up the company share details, establish the directors, and provide remuneration to the business promoters.
Paying for the Shares and Signing the Registration Documentation
Within three months of this meeting, the directors of the business must register the business. During this part of the application procedure, the promoters and company shareholders must pay for the company shares and sign the registration paperwork. Any new company that is liable for income taxes must go through the Revenue Department and get a tax ID. This should be done within 60 days of the establishment of the business in Thailand.
Once registration is facilitated, a foreign-owned company can obtain business licenses and begin operations. The new company must keep track of the income and expenses in accordance to special codes and legislation. To maintain its status in Thailand, a company must also follow certain financial submission guidelines.