STEPS IN SETTING UP A BUSINESS IN THAILAND
We have listed here the important steps in setting up a business in Thailand, whether it is for trading purposes or to establish a company for holding properties for foreigners desiring to purchase land and homes in Thailand.
1. DECIDE ON YOUR BUSINESS STRUCTURE
You may register a business as Limited Company, Sole Proprietorship, Partnership, or Board of Investment Promotions. Thai Limited Company is the most popular structure and ideally the first step in setting up a company in Thailand. A Thai Limited Company is majority-owned by Thai nationals, owning at least 51% of company shares.
2. IDENTIFY YOUR DIRECTOR(S) AND SHAREHOLDERS
A Thai limited company has to consist of 1 or more directors. They can either be Thai or foreigner. You should have a minimum of 2 shareholders to establish a Thai Limited Company and Partnership.
3. RESERVE A COMPANY NAME
The name you select for your business must be unique. It cannot be identical with any registered Thai company, whether it be in English or Thai. Be ready to provide at least 3 proposed business names.
4. REGISTER YOUR COMPANY
Prepare all the necessary registration paperwork and then register your business at the Department of Business Development (DBD).
5. OBTAIN SPECIAL PERMITS AND LICENSES
It is a requirement for some enterprises to secure a special license from other government agencies, depending on the nature of its business operation. These include: Food License, Alcohol and Cigarette License, Entertainment License, Import License, etc.
6. VISA AND WORK PERMIT APPLICATION FOR FOREIGN WORKERS
All foreign workers in Thailand must hold the proper visa and a valid work permit issued by the Ministry of Labor. There is a mandatory requirement for a minimum number of Thai employees per foreign employee, depending on the status of the company. The standard ratio is 4 Thai employees to 1 foreign employee. Moreover, a company can hire one foreigner for every 2,000,000 Baht registered paid-up capital.
7. CORPORATE INCOME TAX AND SOCIAL SECURITY FUND REGISTRATION
You need to make sure that your employees are registered in the Social Security Fund System and must therefore submit monthly contributions. You must apply for and get a business corporate tax ID card from the Revenue Department within 60 days of incorporation or the start of business operations.
8. OPENING COMPANY BANK ACCOUNT.
Companies can open a corporate bank account in Thailand.
9. MONTHLY ACCOUNTING
Accurate bookkeeping records must be maintained. Tax filings and employee social security contributions must be made on a monthly basis.
10. ANNUAL BALANCE SHEET
It is extremely important that companies prepare and submit the balance sheets at least once every twelve months. Such a twelve-month period constitutes the company’s accounting period or financial year. A newly established company should, therefore, close accounts within 12 months from its registration. It is important that a qualified external auditor certifies the accounts and the officer must file with the Revenue Department and Department of Business Development every year. You must file the company balance sheet within 150 days after the end of its accounting period.
You should seek legal counsel for the precise actions that your company needs to undertake. We can help you from step 1 all the way to the last step when your business is up and running, whether you are establishing your company for TRADING PURPOSES or HOLDING PROPERTIES.