Thailand Business Registration

The surge in incorporation in Thailand reflects its economic and growth potential. This country opens the door to international business for aspiring business minds globally. The establishment legalities for setting up a new venture in this country aren’t that complicated- thanks to a simple and paperless process. From robust government support to a skilled workforce, this country offers everything you need to start a brand-new venture. The journey to a successful business starts with a company registration. So, let’s delve into the same and explore all the requirements.

Company Structures in Thailand: Which One is the best?

The following structures are available in Thailand for company incorporation. Choose them wisely based on your goals, scalability, and risk appetite.

Thai Limited Company (Co., Ltd.)

The Thai Limited Company is quite similar to LLC and Private Limited entities. At least one director and three shareholders are required to run such a company. Local officials should hold a major stake in the company- not less than 51%. Overseas investors seeking to register this structure must secure a Foreign Business License.

US-Thai Treaty of Amity Company

Governed by the Treaty of Amity, this business model primarily benefits US entrepreneurs. It ensures 100% ownership for non-native officials without securing a Foreign Business License. Also, it overcomes foreign investment restrictions, allowing businesses to thrive seamlessly.

Board of Investment (BOI) Promotion

The BOI is an ideal choice for entities under the specified category, regardless of nationality. It promotes investment and renders tax benefits. Notably, those who fail to align with BOI criteria may not get all the benefits.

Branch Office

A Branch Office is helmed by the parent foreign entity, either to scale the operation or reach a wider market. It can serve income-oriented chores as the headquarters but must follow the local norms. The controlling entity addresses liabilities.

Representative Office

A Representative Office is not like BOs on the commercial front but can help the parent company to augment their presence. They cannot perform commercial chores.

Regional Area Headquarters (RHQ)

An RHQ is an administrative arm of the foreign entity managing undertakings in the Asia-Pacific (APAC) region. It remains at the forefront of business planning, administration, and communication.

Regional Operating Headquarters (ROHQ)

A ROHQ is another viable business model preferred by foreign investors. It can provide listed services to the  APAC region's branches, subsidiaries, or affiliates.

Company Registration in Thailand: Establishment Requirements

• At least three natural persons as promoters.
• Local head office with a copy of property registration.
• Two million THB of capitalization for non-restricted overseas businesses and 3 million THB for restricted businesses.
• Bank Certification authenticating the presence of funds in the Thai shareholder's account.
• Memorandum of association filing.
• Signature of all stakeholders and directors on the application documents.
• Work permits and visas of foreign directors and employees.

A Snapshot of Post-Registration Compliances for Registered Entities

Annual Financial Statements: Registered entities are bound to share extensive financial statements on a yearly basis with the competent authority.

Corporate Income Tax Returns: Businesses must file tax returns annually, sharing income details and tax obligations with the authorities.

Withholding Tax Returns: Regularly submitting withholding tax returns is paramount, particularly for foreign payments.

Value Added Tax (VAT) Returns: Regular VAT filing is vital to stay compliant. Sharing VAT will help authorities track taxable transactions and corresponding payments.

Social Security Fund (SSF) Contributions: Periodic contribution to the SSF is mandatory for employers to support employee welfare initiatives.

Provident Fund Contributions: Maintaining consistency regarding PF contributions is crucial for the entities as it confirms hassle-free benefits for the workforce.

Annual Audit Report Submission: Submission of the annual audit report is a mandatory requirement for eligible entities as it helps keep finance transparent.

Annual Report Submission to the Department of Business Development (DBD): Sharing an annual report with the DBD is vital for updating the department on the company's current status and prevailing undertakings.

Mandatory Paperwork For Company Registration in Thailand

• Memorandum of Association (MOA)
• Articles of Incorporation
• Company Name Reservation Certificate
• Statutory Meeting Minutes
• Business Registration Certificate
• Company Affidavit
• Tax ID Cards and VAT Certificates
• Letter of Certification from the Bank
• House Registration (Tabien Baan) and Letter of Consent
• Foreign Business License (if applicable)
• Work Permits and Visas
• Promoters' and Directors' Identification
• Board of Investment (BOI) Application (if applicable)
• Documentation for US-Thai Treaty of Amity (if applicable)
• Application for Registration of Value Added Tax (VAT) (if applicable)

Company Registration in Thailand: A Detailed Guide

The following section illustrates the process of company registration in Thailand:

Step 1: Registering the Company Name

The first step involves name reservation with the Department of Business Development (DBD), meeting conditions cited in the Thai Civil and Commercial Code. The authority approves the name request within 1-3 days, following which the applicant can proceed with the next step.

Step 2: Filing the Memorandum of Association

Following name registration, the company must register charter documents like a memorandum of association. It must reflect vital information such as company details, promoters' names, locations, and business objectives. For foreign businesses, cabinet approval is mandatory.

Step 3: Convene the Statutory Meeting

Convene statutory meetings for the submission of company documents such as statutory meetings, by-laws, and articles of incorporation. After this, the company must appoint a board of directors and auditors.

Step 4: Registration of the Company

Company registration is being performed on the day of MoA registration. A 90-day buffer time is available to the entity from the date of the statutory meeting to complete the registration formalities.

Step 5: Register for VAT and Income Tax

This step requires the applicant to secure the TAX ID cards and VAT Approval from the DBD and revenue administration. Securing these will require submitting an application form and some paperwork, such as registration certification, approval of foreign ministry, etc.

Step 6: Company Bank Account

After securing company registration and tax document, the next important step is the opening of a corporate bank account, which will help your business transactions.

An Overview of Tax Structure in Thailand

Entities reaping international income are subjected to specific tax slabs. Similarly, overseas entities are required to pay taxes on their profits in Thailand. Presently, the tax authority imposes 20 percent of corporate tax on eligible entities.

Companies yet to commence profit-related activities confront final withholding tax (WHT) on specific types of assessable income, such as rentals, royalties, service fees, and dividends.

Furthermore, the standard tax rate is poised at 15 percent, with dividends taxable at 10 percent. However, the companies may experience tax rate fluctuations owing to a double tax treaty (DTT).