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Setting up a company in Thailand can be an attractive option for both local and foreign entrepreneurs. Among the different types of business structures, the Private Limited Company (often referred to simply as a “Thai Limited Company”) is the most common because it offers limited liability, a flexible structure, and credibility in dealing with customers, suppliers, and financial institutions.
This article provides an in-depth look at the process, requirements, benefits, and considerations involved in registering a Thai Limited Company.
A Private Limited Company in Thailand is a legal entity that provides limited liability to its shareholders, meaning their liability is limited to the value of the shares they hold. It is similar to a limited company in many other jurisdictions.
Key features of a Thai Limited Company include:
It must have a minimum of three shareholders.
Liability of shareholders is limited to their unpaid share value.
Management is handled by directors appointed by the shareholders.
The company must keep proper accounts and file annual financial statements with the Department of Business Development (DBD).
This structure is especially popular among foreign investors who wish to establish a permanent business presence in Thailand.
Limited Liability – Shareholders’ risk is limited to their shareholding, protecting personal assets.
Credibility – A registered company is viewed as more reliable by partners, suppliers, and banks.
Access to Work Permits – A Thai Limited Company can sponsor foreign employees and directors for work permits and visas.
Ease of Ownership Transfer – Shares can be transferred relatively easily compared to partnerships.
Clear Legal Framework – Governed by the Thai Civil and Commercial Code, providing structure and predictability.
Before starting the registration process, it is important to understand the legal requirements:
Shareholders: At least three shareholders are required at the time of incorporation. They can be individuals or corporate entities.
Directors: At least one director must be appointed, and the director(s) represent the company legally.
Capital Requirements: There is no minimum capital requirement for Thai-owned companies. However, for companies employing foreigners, a minimum registered capital of 2 million THB per foreign work permit is generally required (or 1 million THB if married to a Thai national).
Foreign Ownership Restrictions: Foreigners can hold up to 49% of the shares in a Thai Limited Company. If foreigners hold more than 50%, the company may be considered a foreign-owned business, requiring a Foreign Business License under the Foreign Business Act (FBA).
Registered Office: The company must have a physical registered office address in Thailand.
Accounting and Tax: Companies must keep proper books, file annual audits, and comply with Thai tax regulations.
The process begins with submitting at least three proposed company names to the Department of Business Development (DBD). The name must not be identical or similar to existing company names and must comply with naming rules (for example, certain words like “bank” or “insurance” may be restricted).
Once approved, the name is reserved for 30 days.
The MOA must include:
Company name.
Location of registered office.
Business objectives.
Registered capital and number of shares.
Names and details of the initial shareholders.
The MOA must be signed by all promoters (initial shareholders) and filed with the DBD.
After the MOA is accepted, a statutory meeting must be held to:
Approve the Articles of Association.
Officially appoint directors and auditors.
Approve share allocation.
Confirm the registered capital.
This meeting sets the foundation of the company’s internal governance.
The company must be registered with the DBD within three months of the statutory meeting. The directors file the application and supporting documents, including:
List of shareholders.
Meeting minutes.
Director acceptance letters.
Details of the registered office.
Upon approval, the company becomes a legal entity and receives its company registration certificate.
Companies must register for:
Corporate Income Tax (CIT).
Value Added Tax (VAT) (if annual turnover exceeds 1.8 million THB or if the company engages in activities requiring VAT registration).
Social Security if employing staff.
If the company wishes to employ foreigners, it must meet specific requirements regarding registered capital, number of Thai employees, and office space. Each foreign employee must obtain a work permit and appropriate visa.
Running a Thai Limited Company involves ongoing compliance:
Accounting: Proper bookkeeping in accordance with Thai accounting standards.
Auditing: Annual financial statements must be audited and submitted to the DBD and Revenue Department.
Shareholder Meetings: At least one annual general meeting (AGM) must be held.
Tax Filing: Monthly VAT and withholding tax filings (if applicable), as well as annual corporate tax returns.
Non-compliance can result in fines, penalties, or even revocation of the company’s registration.
Timeline: Company registration typically takes 3–6 weeks, depending on document preparation, name approval, and coordination with shareholders.
Government Fees: Registration fees depend on registered capital, generally about 5,000–25,000 THB for most small to medium companies.
Professional Fees: Using a law firm or accounting firm to assist with registration and compliance is common, with fees ranging widely depending on services.
Foreign Ownership Restrictions: Many business sectors are restricted under the Foreign Business Act, meaning foreigners may need a Thai partner to hold the majority of shares or must obtain a Foreign Business License.
Nominee Shareholding Issues: Using Thai nominees to circumvent ownership restrictions is illegal and can result in severe penalties.
Language Barrier: All official documents must be filed in Thai, requiring certified translations if foreign shareholders are involved.
Ongoing Compliance Costs: Even dormant companies must file annual accounts and tax returns.
While the Thai Limited Company is the most common, foreign investors may also consider:
BOI Promotion: Companies promoted by the Board of Investment may receive exemptions from foreign ownership restrictions and tax incentives.
Representative Office: A non-revenue-generating office for market research or liaison.
Branch Office: An extension of a foreign company, allowed to conduct certain business activities.
Registering a Thai Limited Company provides entrepreneurs and investors with a robust and flexible business vehicle in Thailand. With limited liability, credibility, and the ability to employ foreigners, it is the preferred structure for many. However, it requires compliance with the Civil and Commercial Code, Revenue Code, and Foreign Business Act.
