Thai Limited Company Formation

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Thai Limited Company
What types of business organizations can I register in Thailand?

You may register a business as Sole Proprietorship, Limited and Unlimited Partnership, Private and Public Limited Company, Branch Office, Representative Office and Regional Office Headquarter.  In most cases, Thai Limited Company is the most popular structure and ideally the first step in setting up a new business in Thailand.

What is a Limited Company?

A limited company is that kind formed with a capital divided into equal shares. The shareholders’ liability is limited to the amount of, if any, unpaid shares held by them.

How much capital will I need to set-up a Thai Limited Company?

You can set up a Thai Limited Company with only a few thousand Baht. However, the average declared capital is 1M Baht.

Will a foreigner funding a business be automatically entitled to Visas/Work Permit upon setting-up a company?

Even if a foreigner funded the company, the foreigner needs to secure a work permit if he intends to personally engage in the business.  A company can obtain the relevant visa and work permit for its foreign director or foreign employee, provided it has been accordingly set-up.  The company must employ a minimum number of Thai nationals for each foreigner employed and they must have a minimum paid up capital of 2 Million Baht for every foreign employee.

 
How many directors and shareholders must a company have under Thai law?

A Thai limited company has to consist of 1 or more directors and a minimum of 3 shareholders. They can either be Thai or foreigner.

Can foreigners hold 100% ownership of a business in Thailand?

In Thai Limited Company shareholding, Thais must own the majority company shares. This means that foreign ownership of the company cannot be more than 49%.

Foreigners can hold 100% ownership of businesses in non-restricted categories, such as exporting businesses and certain types of manufacturing businesses.  Other methods to obtain 100% non-Thai control are through application for an alien business license, Board of Investment (BOI) Promotion or registration through the Treaty of Amity for Americans.

What is Voting Rights?

Shareholders of limited companies have the privilege of voting in the annual general meeting of a company. This is based on the type and amount of shares they own.  They have a right to cast their votes when the company is taking major decisions.

An ordinary share gives the holder voting rights in the company and entitles the person to all dividend distributions as a part-owner of the company.

Preference shares allow holders be paid dividends before ordinary shareholders and they also have priority over asset claims upon company dissolution.  The downside is that preference shareholders have a fixed dividend and only limited voting rights with respect to company affairs.

These different types of rights can have a major impact upon the running of the business because these rights can have a security impact on various company issues.

Why form a Thai majority company?

Aside from the company’s capacity to acquire a land, forming Thai majority company generally requires less registered capital and less paperwork than setting-up a foreign company.

How long does it take to set up a limited company?

You can set up a Thai Limited company in about 1-2 weeks.

Why should I hire a lawyer to incorporate my company?

Starting a new business in Thailand may become complicated due to language barriers. It may also take several days to weeks to complete the entire process.  As all the legal documents are in Thai, completing these forms without the knowledge of its contents as well as the Thailand Law can lead to serious complications and other problems that may affect you and your business.  That is why it is essential to look for trusted lawyers and advisors with legal qualifications and practical experiences. They can give you an extensive guide and advice on how to structure your company.