[email protected]
Two Pacific Place Building, 142 Sukhumvit Road, Klongtoey, Bangkok 10110 Thailand
Establishing a Thai Limited Company is one of the most common and preferred ways for both local and foreign investors to conduct business in Thailand. A limited company offers a well-structured, legally recognized, and flexible business entity that provides limited liability protection to its shareholders, a formal corporate structure, and a clear legal framework under Thai law. This type of company is governed by the Thai Civil and Commercial Code (CCC) and supervised by the Department of Business Development (DBD) under the Ministry of Commerce.
Setting up a Thai limited company involves several legal and procedural steps — from reserving the company name and preparing the necessary documents to registering with the authorities and obtaining relevant licenses. This article provides a detailed overview of the process, requirements, and benefits of Thai Limited Company registration.
A Limited Company (บริษัทจำกัด) in Thailand is a legal entity separate from its owners (shareholders). It is established to engage in commercial activities, generate profit, and protect shareholders’ personal assets from business liabilities. The liability of each shareholder is limited to the amount of their share capital.
A Thai limited company is typically classified into two types:
Private Limited Company (Ltd.) – Common for small to medium-sized businesses.
Public Limited Company (PLC) – Suitable for large businesses planning to offer shares to the public or list on the stock exchange.
This article focuses on the Private Limited Company, which is the most common form for local and foreign entrepreneurs.
Separate Legal Entity – The company is distinct from its owners and can own property, enter into contracts, and sue or be sued in its own name.
Limited Liability – Shareholders’ liability is limited to the unpaid value of their shares.
Minimum Requirements – At least three shareholders are required at incorporation.
Registered Capital – No minimum capital is mandated by law (except in foreign-controlled companies, where specific requirements apply).
Management – The company is managed by one or more directors appointed by the shareholders.
Tax Obligations – The company must register for corporate income tax and comply with Thai accounting and tax regulations.
Foreign investors can own up to 49% of shares in a Thai limited company, while Thai nationals must own at least 51%. This structure allows the company to be treated as a Thai entity, enabling it to engage in most business activities without restrictions.
However, if foreign shareholders hold more than 50%, the company becomes a foreign company under the Foreign Business Act (FBA). In such cases, it can only operate in business categories that are not restricted to foreigners — or must obtain a Foreign Business License (FBL) or Foreign Business Certificate (FBC).
Foreign companies may also benefit from exemptions under treaties such as the U.S.-Thai Treaty of Amity or Board of Investment (BOI) promotions, which allow full foreign ownership in approved sectors.
The registration of a Thai limited company involves several key steps, each governed by the DBD.
The first step is to reserve the company name through the DBD’s online system. The proposed name must:
Not be identical or similar to an existing company’s name.
Not violate any trademarks or contain prohibited words.
Include the word “Limited.”
Up to three alternative names can be submitted in order of preference. Once approved, the name reservation is valid for 30 days.
The Memorandum of Association is a foundational document that outlines key company information, including:
Company name.
Registered office address.
Objectives of the company.
Authorized capital and number of shares.
Names, addresses, and signatures of promoters (at least three individuals).
The MOA must be filed with the DBD. Each promoter must subscribe to at least one share.
After the share subscription, a statutory meeting is held to:
Approve the Articles of Association (company bylaws).
Appoint the company’s first directors and auditor.
Determine share payment structure and capitalization.
Ratify any expenses incurred during incorporation.
Once the meeting is completed, the company proceeds to formal registration.
The company must be registered with the DBD within three months after the statutory meeting. Documents required for registration include:
Memorandum of Association (MOA).
Articles of Association (AOA).
List of shareholders.
Minutes of the statutory meeting.
Director(s) information and consent forms.
Proof of registered address.
Government fees (based on registered capital).
Upon approval, the DBD issues a Certificate of Incorporation, confirming the company’s legal existence.
After incorporation, the company must complete the following registrations:
Tax Identification Number (TIN): Register with the Revenue Department within 60 days of incorporation.
Value Added Tax (VAT): Required if the company’s annual revenue exceeds THB 1.8 million or if it engages in VAT-applicable activities.
Social Security Office Registration: Employers must register employees within 30 days of hiring.
A Thai limited company is governed by its shareholders and directors:
Shareholders: Must be at least three at all times. Shares can be held by individuals or legal entities.
Directors: Responsible for managing company affairs. They are appointed by the shareholders and have authority to bind the company legally.
Auditor: A licensed auditor must be appointed annually to audit the company’s financial statements.
There is no minimum capital requirement for Thai-owned companies. However, foreign-owned companies typically need at least THB 2 million in registered capital per foreign work permit holder, or THB 3 million for a company applying for a Foreign Business License.
Shares in a Thai limited company must have a par value of not less than THB 5 each and must be fully subscribed before registration. Payment of shares can be partial upon incorporation, but at least 25% of the registered capital must be paid initially.
A Thai limited company must maintain proper accounting records and comply with annual reporting obligations, including:
Financial Statements: Prepared annually and audited by a certified auditor.
Annual General Meeting (AGM): Must be held within four months after the end of each fiscal year to approve financial statements and appoint auditors.
Annual Report Filing: Submit audited financial statements and shareholder list to the DBD within one month after the AGM.
Corporate Income Tax (CIT): Filed twice per year — mid-year and year-end.
Failure to comply with reporting obligations may result in fines or administrative penalties.
Once registered, the company can open a corporate bank account in Thailand. The bank typically requires the company’s incorporation documents, tax ID, and identification of directors and authorized signatories. Some banks may request the company’s business plan or evidence of local operations.
Setting up a Thai limited company offers multiple business and legal advantages:
Legal Recognition: The company is recognized as a separate legal entity.
Limited Liability: Protects shareholders’ personal assets.
Tax Benefits: Eligible for corporate income tax rates as low as 15–20%.
Ease of Ownership Transfer: Shares can be transferred easily with shareholder approval.
Eligibility for Work Permits: Enables foreign directors and employees to obtain work permits.
Market Access: A Thai-majority company can operate freely in most industries without FBL restrictions.
Foreign investors should consider the following points when establishing a Thai limited company:
Use of Thai Nominee Shareholders: Illegal if used solely to circumvent the Foreign Business Act.
Registered Office: Must have a physical address; virtual offices are generally not accepted for registration.
Legal Assistance: Engaging a local law firm or business consultant ensures compliance with regulations and smooth registration.
Registering a Thai Limited Company is the most effective and flexible method for establishing a business presence in Thailand. It provides a strong legal foundation, limited liability protection, and the ability to conduct a wide range of business activities. With Thailand’s strategic location in Southeast Asia, robust infrastructure, and government support for foreign investment, forming a limited company opens the door to numerous commercial opportunities.
While the registration process is relatively straightforward, it requires careful attention to legal details, documentation, and compliance. Seeking professional legal and accounting assistance ensures that the company is properly structured and fully compliant with Thai laws.
