Incorporation in Thailand
How to incorporate a company in Thailand?
The most common type of a business entity for foreigners to incorporate is a Thai Limited Liability Company (LLC). The registration for this type of company is very straightforward. The process of incorporating a company is as follows:
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Company Name
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Submit 3 names options for Department of Business Development (DBD), Ministry of Commerce. The name reservation is valid for 30 days upon approval.
Paid-in Capital
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Company must hold a statutory meeting once the company gets approval for the memorandum and the articles of association. The founders/promoters shall hand over the business to the directors after the meeting. The directors shall thereupon ask the promoters and subscribers to pay in at least 25% of the registered capital.
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MoA Registration
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Register the company, social security and workmen’s compensation fund and obtain TIN at the Partnership and Companies Registration Office, DED, Ministry of Commerce.
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VAT Registration
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VAT registration is mandatory for all companies when the threshold of THB 1.8 million. Application must be submitted to Bangkok Revenue Office.
Social Security Office
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An employer and each employee must be registered as an insured person with the Social Security Office (SSO). The employer shall collect the application form at the Social Security Office and submit the registration form at the Zone Office of Social Security.
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What are the Laws, Rules, and Regulations for doing business in Thailand?
After you have successfully incorporated a company, you will still have to deal with a few legal hurdles and ensure compliance with regulations. This includes:
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1. Secretarial and Administrative Function
Every Thai company must employ a qualified corporate secretary who is experience and proficient in Thai corporate law.
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2. Social Fund Registration
Social contributions on the employees’ salaries must be paid each month and the Annual Fund Contributions must be submitted at the end of each year.
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3. 20% Corporate Income Tax
Withholding Tax: Ranging 0% to 10%
Value Added Tax: 7% or 0% or NA
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4. Financial Compliance
Consolidation, accounting, and preparation of group financial statements in accordance with the Thai Financial Reporting Standards for Non-Publicity Accountable Entities (TFRS for NPAEs)
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5. Minimum Registered Capital
Foreign majority owned companies are required to have at least=t THB 2 million registered capital depending on the type of business
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6. Work Permit
A Thai company hiring a foreigner must have applied for Tax ID and VAT registration and have a minimum paid up capital of THB 2 million per foreign employee
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7. Foreign Worker Quota
A Thai company must have a ratio of at least four Thais for every foreign worker (4:1)
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8. Regulations & Licenses
Thai Law regulates the activities in which foreign companies may engage in while some activities are completely prohibited, some may be engaged in with prior government approval.