Legal entity types in Thailand
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Legal entity types relevant for foreign investors in Thailand
Key facts about doing business in Thailand
|1.75 million (20th in the world)
|505.9 billion USD (31st in the world)
|Ease of doing business ranking
|Minimum time to incorporate a company
|Main economic hub
|Thai Baht (THB)
|Main languages spoken
|101st, very low proficiency
Annual GDP growth
General overview of the corporate law in Thailand
Thailand’s legal system is based on civil law. Foreign investments are typically channeled through a Thai majority company or a representative office (for non-revenue activities).
Most companies start as Thai-majority limited companies, but 100% foreign ownership is possible in Thailand through approval by the Board of Investment (BOI), or by obtaining a Foreign Business License (FBL). Acquiring these approvals and licenses is, however, a lengthy process.
There is also a special registration provision allowing up to 99% foreign ownership for companies based in the United States known as the U.S.-Thai Amity Treaty.
Private Limited companies are most common for foreign investors. Foreign shares are limited at 49%, but there are two types of stocks (common and preferred), enabling foreign investors to maintain control over the company.
Private Limited companies are comprised of a minimum of two Shareholders. Shareholder liability is limited to the amount of invested capital. Company assets are separate from shareholder assets and debts are non-transferable between them.
The type of entity determines the maximum percentage of foreign shares.
Board of Directors
A director handles the day-to-day business activities of the company. Companies in Thailand are only required to have one director. If a company has more than one, they are referred to as a board of directors. Directors are normally appointed by the Shareholders. Directors can also be shareholders.
There are no requirements for directors to be of Thai nationality, but it is considered best practice.