A foreign business entity wanting to establish and operate a business interest in Thailand needs to choose which business type it wants to have and then have it registered with the proper government agency.
The registration of the business entity can take up several weeks. Further, the foreign investment entity needs to be aware that in Thailand, not all types of business endeavors are open to foreign companies. It is limited to several activities only.
The Types of Business Structures
The common business structures are the following:
The Company Registration Process
The process in registering a company in Thailand can be briefly described as follows:
The company needs to reserve a company name. The name should follow the Ministerial Regulation otherwise it cannot be considered by the concerned government agency and thereby be rejected immediately.
To qualify, the company name should not use the name of the King. It must also be unique, meaning to say, it should not bear the same name with that of an existing company. Further, the company should submit not only one but three company names, one of which is the primary name and the other two are the alternative names in case the primary one is rejected.
If in case the primary and the two alternative names are all rejected then the company must submit another set of proposed company names.
The second step in the company registration process is the filing of the company’s Memorandum of Association (MOA). The MOA should be signed by every company shareholders and then be submitted with other pertinent documentation at the Ministry of Commerce for evaluation.
The MOA should bear the following:
- Shareholders’ names
- Other information on the shareholders
- Company address
- Proposed company activity
- Registered capitalization
A statutory meeting should then be convened where the company directors would be appointed and all contract entered thereunto by the company promoters would be ratified. It is also within this third step when the company auditor would also be appointed.
During the statutory meeting, the Articles of Incorporation (By Laws) of the company would be approved by the convened body.
After the statutory meeting, the company directors should then submit the application for registration of the company. The minimum registration fee is pegged at 5,000 THB and the maximum at 250,000 THB.
The registration of the company is not the end of the process as it still needs to be registered at the Revenue Department. If it is liable for income tax then it should acquire a Tax ID Card and Number from the said government agency. If the company is earning above 600,000 THB annually then company proponents should also register their business entity for VAT and this should be done within a month after gaining 600,000 THB in sales.