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Andi Refandi
Andi serves as a Senior Account Executive on Emerhub’s global team.
Company registration in Thailand is crucial for establishing legal operations and accessing the country’s thriving economy as a foreign investor or business entity. By registering, you can operate within a structured legal framework, reducing risks associated with non-compliance. Furthermore, registration provides access to Thailand’s pro-business policies, including competitive tax rates and government incentives.
In this article, we’ll guide you through the various options for establishing a foreign-owned legal presence in Thailand. This includes information about the legal framework, requirements, and registration process of company registration for foreign-owned companies in Thailand.
Understanding Thailand’s Framework for Foreign Business Ownership
The Foreign Business Act (FBA)
Your ability to operate as a foreign business in Thailand is primarily governed by the Foreign Business Act (FBA). This act outlines restrictions on foreign ownership and classifies business activities into three lists, which determine the level of foreign participation allowed:
- List One: Activities strictly prohibited to foreigners (e.g., media, farming, land trading).
- List Two: Activities requiring Thai majority ownership due to national security or cultural reasons (e.g., mining, firearm production).
- List Three: Activities where Thai nationals might not yet be as competitive as foreigners (e.g., accounting, legal services, certain retail/wholesale).
It’s worth noting that recent amendments have aimed to ease restrictions for certain service businesses provided to affiliates or subsidiaries, like loans and consulting, to improve efficiency for foreign companies.
Options for Increased Foreign Ownership
While the 49% limit is the standard for foreigners, the Thai government has created clear channels for foreign investors to secure full control of their businesses. The three most common routes are through the Board of Investment (BOI), US-Thai Treaty of Amity, or by obtaining a Foreign Business License (FBL).
Let’s take a look at each of these options:
- Foreign Business License (FBL): If your business falls under List Two or List Three of the FBA, you can apply for an FBL from the Ministry of Commerce. An FBL can allow up to 100% foreign ownership in approved activities, subject to the Ministry’s discretion.
- Board of Investment (BOI) Promotion: Companies in strategic sectors like manufacturing, technology, R&D, and digital services can apply for BOI promotion. This can grant 100% foreign ownership, make it easier to obtain work permits for expatriates, allow land ownership, and provide significant tax incentives (like corporate tax exemptions for up to 8 years and import duty exemptions).
- U.S.-Thai Treaty of Amity: American companies benefit from this treaty, which allows them to operate in many sectors with privileges similar to Thai-owned businesses, including holding majority or full ownership. However, certain sectors like communication and transportation remain restricted under this treaty.
Key Requirements for Thai Company Registration
To successfully register your company in Thailand as a foreigner, you need to decide and have the following in place:
- Company Structure: You’ll first choose a structure. While a Thai Limited Company is the most popular option, other options like a Representative Office or Branch Office also exist depending on your business activities.
- Minimum Capital Requirements: For a private limited company, the minimum capital is typically THB 2 million (approximately USD 60,000) unless the business is restricted under the Foreign Business Act, in which case it may be higher.
- Shareholders: Minimum of three shareholders; at least 51% must be Thai nationals unless exempted through FBL, BOI, or other approvals.
- Resident Director: Your company must have at least one resident director. There are no restrictions on the nationality of the director, but if the director is a foreigner, they must have a valid work permit to legally work in Thailand.
- Business Address: A registered business address in Thailand is required. This can be a physical location or a virtual office depending on your planned business activities.
Since the exact requirement vary depending on your planned business operations, our local experts will help you determine the key requirements applicable to your planned operations.
Step By Step Process to Register Your Company in Thailand as a Foreigner
Once you have determined your ownership strategy (e.g., applying for BOI promotion), you can proceed with the formal company registration. The most common structure used by foreigners is a Thai Limited Company.
Here’s an overview of the company registration process in Thailand:
1. Company Name Reservation
Reserve a company name with the Department of Business Development (DBD). The name must be unique and comply with Thai naming regulations.
The chosen name will also be registered in Thai, even if the primary name is in English. Once approved, the reserved name is valid for 30 days without extensions.
This process is quick and can usually be approved within 1-2 days.
2: File the Memorandum of Association (MOA) and Hold the Statutory Meeting
Once your company name is approved, you must file a Memorandum of Association (MOA) with the DBD. The MOA is a foundational document that outlines your company’s objectives, the names of the initial shareholders (promoters), and the amount of share capital.
After the MOA is filed, the company shareholders must hold a formal Statutory Meeting. In this meeting, the promoters officially approve the company’s articles of association, appoint the company’s directors, and appoint an auditor.
3: Register the Company with DBD
Within three months of the Statutory Meeting, you must submit the application to formally register the company with the DBD.
Registration fees for your company registration is calculated based on the registered capital (e.g., 500 THB per 100,000 THB of capital, with a minimum fee of 5,000 THB).
Once the DBD approves the registration, your company is legally established and will receive its Business Registration Certificate and Company Affidavit.
4. Register for Taxes and Contributions
After the company is registered, there are a few final but very important steps before you can start your operations.
- Tax Registration: Register for tax identification with the Revenue Department within 60 days of incorporation or starting operations. VAT registration is mandatory if your annual revenue exceeds 1.8 million THB or if employing foreign workers.
- Social Security Registration: Employers must contribute to social security funds for both Thai and foreign employees. Registration with the Social Security Office (SSO) within 30 days of hiring employees.
5: Open Your Company Bank Account
After you have your tax registration number, the next step would be to open your business bank account. You would be required to submit company formation documents as well as identity documents for the directors/shareholders.
Refer to How to open a company bank account in Thailand for more details.
6: Obtain Additional Licenses and Permits (If applicable)
While most of the companies can start their operations before this, depending on your business operations, you might also need to secure additional approvals.
For instance, if you are planning to import or distribute medical devices, you would need to secure approval from Thai FDA.
Our experts will help you determine whether any additional approvals are needed during the registration process.
7: Visa and work permit application (If applicable)
After company registration, you must apply for work permits for foreign employees with the Ministry of Labor. The company must meet employment ratio requirements (usually four Thai employees per foreign worker). Foreign employees also need appropriate visas (Non-B Visa) before applying for work permits.
Register Your Company in Thailand with Emerhub
Emerhub helps foreign investors and companies setup their businesses across emerging markets across Asia and UAE in compliance with local laws.
Our local experts provide end-to-end assistance for establishing your business in Thailand. The process usually begins with an initial consultation to understand your needs. Based on your goals, our consultant will guide you on the most appropriate structure and handle the entire registration process on your behalf from your company name reservation to document preparation, FBL or BOI applications, and processing work permits and visas..
You can request a no-obligation consultation with our experts by filling out the form below.
FAQs About Foreign-owned Company Registration in Thailand
Branch Office:
A branch office and a representative office are business entities recommended for foreign ownership in Thailand. A Branch Office is allowed to engage in income-generating activities, enabling it to earn revenue within the country. This means it can conduct business operations similar to a local company, but it often requires an FBL if the activities fall under restricted categories.
Representative Office
A Representative Office, on the other hand, is limited to non-revenue-generating activities. It can conduct market research, source goods, provide technical assistance, or engage in other non-income activities. Unlike a Branch Office, a Representative Office does not require a Foreign Business License but must adhere to specific permitted activities.
Yes, a foreigner can be a director of a Thai company. According to the Thai Civil and Commercial Code, there are no restrictions on the nationality of directors in a private limited company, meaning that a foreign citizen can serve as a director or even the sole director of a Thai company.
However, if a foreign director is physically present in Thailand and engaged in work activities, they must obtain a work permit under the Alien Employment Act. This requirement applies even if the foreign director is not receiving compensation for their role.
Foreign-owned companies incorporated in Thailand are taxed on their worldwide income at a standard 20% corporate income tax (CIT) rate of 20%. However, foreign companies not incorporated in Thailand but conducting business in the country are taxed only on their Thai-sourced income.
Thailand also has tax incentives that are available for foreign-owned companies such as CIT exemptions for up to 13 years. Small and medium-sized enterprises (SMEs) with limited capital and income may benefit from progressive tax rates in Thailand.
