Two entrepreneurs visiting Bangkok to learn about setting up a company in Thailand

There are many reasons for company registration in Thailand. The economy is growing, Thailand produces lots of valuable products for export, and it’s also one of the top spots for relocation due to its pleasant weather and culture.

In this article, we’ll guide you through the various options for establishing a legal presence in Thailand. It’s important to take your time to understand your options to avoid future problems.

Let this article help you on your journey to doing business in Thailand.

Types of companies foreigners can own in Thailand

Thailand provides various types of legal entities where foreign ownership is either partially or wholly allowed. Here are the types relevant to foreign investors:

  • Private limited companies. This is by far the most common type of foreign-owned company in Thailand. It’s a standard limited liability company, however there are restrictions depending on your nationality and line of business. More of that is below.
  • Board of Investment (BOI) promoted companies. Companies that are promoted by Thailand’s Board of Investment can have the majority or 100% foreign ownership, depending on the industry and the specific incentives granted by the BOI.
  • Foreign Business License (FBL) holding companies. Foreigners can operate businesses in the restricted categories under the FBA if they obtain a Foreign Business License.
  • Representative Offices. Foreign companies can establish representative offices in Thailand to engage in non-trading activities. These offices can be 100% foreign-owned but are limited to specific functions such as sourcing of goods or services in Thailand for the head office.

There are other types of legal entities in Thailand, e.g. publicly traded companies, but for this article, we’ll exclude them since they are rarely used to expand a company to the Thai market.

Before setting up a company in Thailand, you should ask yourself the following questions:

  • What are you going to do in Thailand?
  • Will you be earning revenue in Thailand?
  • Will you be having local Thai partners?
  • What’s your timeline? How quickly do you need a legal entity?

Based on those questions, our consultants will be able to suggest you the most suitable legal entity type in Thailand.

In a nutshell, if you don’t plan to earn revenue in Thailand, you should probably register a representative office. If you plan to (or be allowed to in the future) earn revenue in Thailand, then you are most likely going to open a private limited company.

According to the government’s Department of Business Development (DBD) statistics, in the year 2022:

  • 70% of all companies with foreign ownership registered in Thailand were private limited companies (with Thai majority shareholders);
  • 20% were BOI companies; 
  • 10% were FBL companies.

Private limited company registration in Thailand

As mentioned above, the private limited company is by far the most common type of legal entity to establish among foreign investors in Thailand.

Private limited companies are often referred to as “Thai-majority companies” in Thailand. This is because in most cases private limited companies must have at least 51% local ownership.

Private limited companies have a minimum capital requirement of 2 million THB unless the business activities require higher capital investment.

Foreign Ownership Restrictions in Thailand

Most private limited companies in Thailand can have up to 49% of foreign ownership. There are some notable exceptions:

  • American nationals can own up to 100% of private limited companies in Thailand;
  • Board of Investment (BOI) promoted companies, essentially companies that bring some new and innovative solutions to Thailand;
  • Foreign Business License (FBL) companies that are seen as strategic interest for Thailand;
  • Some industries are entirely closed to foreign (or even local) investors.

Controlling Thai-majority-owned companies

Setting up a company with a Thai majority is the easiest and fastest way to open a company in Thailand. Typically, the incorporation process takes just 3-5 working days.

However, it poses a challenge how to control the company when the local shareholders have a majority.

The answer is very simple, Thailand allows different voting rights for different types of shares. As a foreign investor, you can have control over the company by allocating yourself ordinary shares and giving Thai shareholders preferential shares with minimal voting rights. This allows you to change shareholders as needed.

Here is a typical capital structure of a Thai-majority company in Thailand:

ShareholderNationalityShares% SharesTypeVoting Rights% Voting RightsDividends
Foreign Individual/CompanyForeign9,80049%Ordinary9,80079.35 %90%
Thai Individual/CompaniesThai10,20051%Preferential2,55020.65 %10%
20,000100%12,350100%100%

The best way to structure your capital table depends on a few aspects, such as:

  • How is the company going to generate revenue?
  • Does the company hold significant assets in Thailand?
  • Are the local shareholders purely “silent” shareholders or actual business partners?

Whoever you plan to engage as a local shareholder, this is a step that should not be overlooked and should be handled professionally. With proper legal arrangements, we can protect your assets and avoid any costly legal disputes in the future.

Reach out to our consultants to discuss the best structure for your company.

Companies with special permits to operate

In Thailand, companies can receive special privileges and licenses through two different channels: the Board of Investment (BOI) and the Foreign Business License (FBL). Each has its own set of benefits, restrictions, and application processes, tailored to different types of business activities and ownership structures.

There is also a special treatment for American-owned companies through the US-Thailand Amity Treaty.

Here are the key differences between BOI-promoted companies and FBL companies in Thailand:

Board of Investment (BOI) companies in Thailand

BOI is a Thai government institution that grants special privileges to companies that it deems innovative and that have relevant contributions to the economy of Thailand. Some of the privileges include:

  • Up to 100% foreign ownership;
  • No restrictions on hiring foreign employees;
  • If relevant for the business activities, the company can own land;
  • Simplified visa and work permit requirements;
  • Import duty exemption for machinery and equipment used for production;
  • Up to 8 years of Corporate Income Tax holidays (only for some BOI categories);
  • Minimum capital 1 million THB (higher for some BOI categories).

Unlike the Thai-majority companies, the registration process can take 2-3 months or even longer. You’ll need a detailed business plan and the approval is subject to the BOI’s decision.

If your company plans to bring innovative technology to Thailand, our advice in most situations is to first establish a Thai-majority company and then start applying for BOI approval.

Foreign Business License (FBL) companies

The Foreign Business License is a permit that allows foreign nationals to operate businesses in sectors that are normally restricted to foreign investors under the Foreign Business Act (FBA).

An FBL does not provide tax incentives but grants the legal right to conduct business in Thailand.

FBL companies are relatively rare since the Thai government needs to deem your company as important enough that you should be given an exception to operate in a field normally closed to foreign investors.

Unlike BOI companies that get lots of benefits, FBL companies are usually subject to more restrictions than regular private companies.

Owning a company in Thailand as a US citizen

The US-Thailand Amity Treaty allows for American-owned companies to engage in business on the same basis as Thai companies, with some exceptions. 

The Americans can own the majority or all of a company, but the company must be registered as an American-owned company adhering to the treaty provisions, and the majority of the directors must be either Thai nationals or American citizens.

Even with the Amity Treaty, there are certain restrictions on businesses involved in communications, transportation, fiduciary functions, banking involving depository functions, the exploitation of land or other natural resources, and domestic trade in indigenous agricultural products.

Notably, the treaty does not allow American-owned companies or citizens to own land in Thailand. However, American-owned companies can acquire land on a leasehold basis or own buildings on such leased land.

To take advantage of the Treaty’s benefits, companies must go through an approval process with the Thai Department of Commercial Registration, which includes a thorough review of the company’s shareholders and business operations.

Representative offices in Thailand

If you don’t plan to receive revenue in Thailand or hire more than a few foreigners, a representative office is a better option for establishing a legal presence in Thailand.

Representative offices don’t have shareholders, they represent their parent company in Thailand. As such, they are not subject to foreign ownership restrictions.

The key limitation is that you are only allowed to spend money in Thailand. If you earn revenue, you need to either invoice via an overseas entity or set up a private limited company.

Read more about opening a representative office in Thailand.

Frequently asked questions about company registration in Thailand

What visas are available for foreign investors and employees in Thailand?

Foreign investors and employees can apply for Non-Immigrant B visas, and may also be eligible for BOI-promoted visas if the company is BOI-certified.

Are there any annual compliance requirements for a registered company in Thailand?

Yes, registered companies in Thailand must comply with annual reporting, tax submissions, and, if applicable, audits.

Can I register a company in Thailand remotely?

Yes, the steps that require local presence can be handled by giving us a power of attorney.

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