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A Private Limited Company requires seven members/promoters before an application can be submitted. A minimum of one share per promoter and 25% paid up capital is required. A Memorandum of Association and the Articles of Association outlining the rights and responsibilities of shareholders must also be submitted. |
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Statutory meetings must be held, Director names recorded and auditors appointed. Some nationalities are excluded from ownership of shares in Thai Companies. Your lawyer will advise you on this and even assist you if you are on the exclusion list. |
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The Public Companies Act (2535) 1992 allows a Company to be set up by a qualified lawyer for non-Thai directors / owners. A Public Limited Company registration requires fifteen applicants. Application for incorporation of a Public Company requires that 50% of applicants must reside in Thailand and full disclosure of holdings by Company Directors are registered. Public Company shares must be paid up shares and be held a minimum of two years. Statutory meetings are mandatory and minutes recorded outlining the appointment of Directors and a Company auditor. |
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The Board Of Directors
The percentage of non-resident Directors is restricted. There is greater responsibility and stricter ethical guidelines than for a simple Private Limited Company. Share dealing Company investment loans and debentures are monitored by the Securities and Exchange Commission (SEC) and on Public offerings by the Stock Exchange of Thailand (SET). Bonds may be traded and margin calls on wholly owned stock subject to regulations in force. Please seek advice from legal counsel and a stock trader or financial analyst before undertaking any action. |
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Partnerships In The Kingdom Of Thailand
There are three types of Partnership entities available in Thailand:
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an unregistered ordinary Partnership has Partners who are all jointly responsible, without any limitation on the Partnership's total obligations. A new Partner becomes liable for all obligations incurred by the existing Partnership before or after the association begins. This is not classified as a legal entity and all taxes are calculated as for individual liabilities.
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a registered ordinary Partnership is a juridical entity, separate and distinct from the individual Partners by virtue of its registration with the Commercial Registrar. A registered ordinary Partnership is treated as a Corporate entity for tax purposes.
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a limited Partnership is one in which there are one or more Partners whose individual liabilities are limited to their respective capital contributions to the Partnership.
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Branch Offices In Thailand |
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A Company incorporated under foreign laws may establish a Branch office to do business in Thailand. Branch offices are required to maintain only those accounts relating to activities of the Thailand entity. It is important to clarify beforehand what constitutes income subject to Thai law. The Thailand Revenue Department may consider revenue directly earned by the Head Office as being subject to Thai taxation. |
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The Thailand manager must have a power of attorney granted from the Foreign entity. |
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Your certified legal advisor can guide you through the process of registration and establishment of all legal requirements for both the Foreign entity and Branch Office. |
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A Foreign entity may establish a Representative office in Thailand to engage in limited non revenue earning activities. these activities are restricted to:
- searching for local sources of goods or services for its Head Office.
- inspecting and controlling the quality and quantity of goods procured by its Head Office.
- providing advices in various fields relating to products directly sold by its Head Office to local distributors or consumers.
- disseminating information about new products and services of its Head Office.
- reporting to its Head Office on local business developments and activities.
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Examples Of Representative Offices include Finance Companies, Banks and Credit Offices. |
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Regional Offices |
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A Multinational Corporation may establish a Regional Office in Thailand to conduct limited, non revenue earning activities. These activities include:
- contacting, coordinating and supervising the activities of affiliated businesses in the region.
- providing services to affiliated Branches or subsidiaries such as, advise and management services, training and personnel development, financial management, marketing control and sales promotion.
All expenditure incurred by the regional office must be borne by the Head Office of the Corporation.
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Joint Ventures In The Kingdom Of Thailand. |
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A Joint Venture can be described in accordance with general practice as a group of persons (natural and/or juristic) entering into an agreement in order to carry on a business together. To date, the Civil And Commercial Code does not recognise the Joint Venture as a legal entity and income is subject to Corporate Taxation under the Revenue Code. |
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Distributorships And Agencies |
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Thailand does not impose any restrictions or conditions on agency / distribution agreements between Foreign and Thai citizens. Such agreements may be made and terminated freely at the discretion of the Parties involved. In general, one party agrees to provide goods and the other party markets the products. Normally there is a defined geographical area and targets of performance agreed upon. Registration is not required and the entity will not be recognised under Thai law. The offshore entity is excluded from the Thai Revenue Code and are treated under the Civil and Commercial Law regulations. |
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Licenses |
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Licensing permits an enterprise the rights to use technology for a financial consideration. The licensor is obligated to provide the means by which the technology can be effectively transferred, such as blueprints, manuals and training. Although licensing agreements must be registered, there are effectively no restrictions on them. Businesses may license trademarks and patents directly to a Thai entity. Thai Company or Corporate taxation will be applied to the tangible goods, services or derived profits. |
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Manufacturing Agreements |
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These are the terms and conditions under which a Foreign Company sub-contract the manufacturing process to Thai Companies. They may also allocate Thai Companies the right to distribute products within outlined territories. |
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Agencies |
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Agencies are governed by the Civil and Commercial laws. An agent operating in Thailand will be deemed to have the authority of the Foreign entity unless the signed agreement states otherwise. Taxes are applied under the Revenue Code and Corporate Tax applied. |
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If a double taxation treaty is in force certain taxes may not be levied. |
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Immigration And Work Permits |
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A visa, from whatever source, does not constitute the permission to work in Thailand. This document is granted by the alien occupation division (Immigration Department). A work permits is granted bytThe Ministry of Labour and Social Security. Entry on a non-immigrant visa (O, OA or B) is a prerequisite in obtaining a Work Permit. |
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Work Permit |
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A work permit can be a complicated process requiring the applicant to deal with several government departments. Dealing with the relevant Ministries can be time consuming and it may be necessary for the applicant to leave the country and return to avoid overstaying. During the process, applicants must be aware of how long they have been in Thailand and the penalties imposed if you inadvertently overstay. ie mandatory imprisonment and fines. On receiving a Work Permit the holder still has reporting responsibilities which must be understood and followed. The Aliens Act (2521) requires all foreigners who wish to work in Thailand to obtain a valid permit before commencement of any work. The definition of work is very broad and does not necessarily require the foreigner to be paid to be classified as working. Work Permits are granted solely at the discretion of the Provincial Governor. Our highly trained staff have extensive experience in obtaining and renewing Work Permits and can guide you through the process. |
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Thailand Immigration |
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The Kingdom of Thailand has many types of visas available for foreigners. The type of visa required depends upon what the holder expects to do while in Thailand. If the purpose of the visit is for tourism, then a simple tourist or transit visa will suffice. Many nationalities can obtain a 30 day visa upon arrival at any border immigration checkpoint. |
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Other Visa Categories |
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Below is a list of various Non-Immigrant Visa's available to Foreigners. All these category visa's should be obtained from a Thai Embassy or Consulate before arriving in The Kingdom. Each category visa listed is available to be extended from the Department Of Immigration within Thailand: |
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Business (B) - Available for conducting Business |
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Other (O) - Generally only available for Foreigners with Thai dependents. |
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Retirement (OA) - Reserved for Foreigners over 50 years old. |
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Education (ED) - Available for students to study, or attend a conference or training course. |
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Diplomatic or Official |
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If a Foreigner holds a one year extension, they need to be aware that leaving the Kingdom invalidates the extension. Prior to departure they are responsible for acquiring a Re-Entry Permit which allows the extension to be continued once the Foreigner returns to Thailand. |
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