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Business registration services Limited company Limited Partnership and Foreign business license in Thailand

Business Registration

(Business Registration Services) Nowadays, more foreign investors are interested to invest in Thailand as Thailand is considered as the gateway to ASEAN and the Excellent Strategic Investment location according to the significant factors such as market size with quality purchasing power of ASEAN, China, and India, resilient macro-economic stability and growth, leading production and exporting hub, diversity of strength: from modern agriculture to manufacturing , infrastructure readiness and the government policy on attracting the investors to invest in special economic zone by giving benefit and more incentives if invest in the Eastern Economic Corridor project area (EEC project) located in Rayong, Chachoengsao and Chonburi, connect with 10 target industries under the Thailand 4.0 policy which takes into account the shifting of Thailand’s economy to value-based, innovation-driven economy. If you are the foreigner who can see the opportunities and want to do business in Thailand, we can help you to set up the business in Thailand with the best solution according to your objective and needs, there are various different kind of legal entities that can be selected on business registration in order to meet your business objective and conditions;

Limited company

A Limited company is the most popular form of business organization among foreign investors on doing business in Thailand. A company which is formed with a capital being divided into shares of an equal value, the ownership and management are legally separated. The liability of the shareholder being limited to the amount unpaid on the shares held by them. Only the director(s) have the authority to sign any documents to be binding the company. The requirements for forming the limited company are as follows:
  • It needs at least 3 persons to be promoters and at least one director.
  • Physical address for registration
  • At least 51% of a company’s share must be held by Thai Citizen.

Limited Partnership

A Limited Partnership is a business organization where two or more people agree to join common understanding undertaking and share profits on doing business, it needs two or more persons to be promoter on registration.
There are two types of partners as follows:
1. One or more partners whose liability is limited to such amount as they may undertake to contribute to the partnership.
2. One or more partners who are jointly and unlimitedly liable for all the obligation of the partnership

A limited partnership must be managed only by the partners with unlimited liability, it must be registered and are taxed as a limited company, with no tax advantage if comparing to the limited company.

Public company

A Public company is a company established for the purpose of offering shares for sale to the public and the shareholders shall have the liability limited up to the amount to be paid on shares, no minimum amount of registered capital and public company must be registered as a legal entity. The requirement for public company registration are as follows:
  • A minimum of 15 promoters is required for formation and registration of a public company.
  • The board of directors must have a minimum of 5 members, at least half of whom must have a domicile in Thailand.
  • Each share of the company shall be equal to value and be fully paid up at only one time.
  • No less than one half of the total number of promoters have their domicile in Thailand
  • The promoter shall subscribe for shares and all the shares so subscribed must be paid up in money in an aggregate amount equal to not less than 5 percent of the registered capital and the shares cannot be transferred within two years form the registration, except with the approval of the shareholders at a meeting of the shareholder.

Other services: Company Secretary

Representative Office

A foreigner entity may establish “Representative Office” in Thailand in order to render the service to their head office or their affiliated company or the group of companies in foreign country.

The characteristics of Representative Office

  • Be the juristic person established in accordance with the foreign law and established an office in Thailand in order to operate the service business to their head office or their affiliated companies or the group companies in foreign country only;
  • Render services to the head office, affiliated company or group company without receiving income from service, except for funds to cover the expenses of the Representative Office that are received from the head office;
  • The Representative Office has no authority to receive purchase order or to offer for sale or to negotiate on business with any person or juristic person.

The scope of service of the representative office

The scope of service of the representative office is restricted to render in any or all of the following 5 categories.
  1. Finding sources of goods or services in Thailand for the head office.
  2. Inspecting and controlling the quality of goods purchased in Thailand by the head office.
  3. Providing advice and assistance concerning goods of the head office sold to agents or consumers in Thailand.
  4. Disseminating information concerning new goods or services of the head office.
  5. Reporting on business developments in Thailand to the head office.

Branch Office

A Branch Office is the juristic person established in accordance with the foreign law and established an office in Thailand, it is considered to be the same legal entity as its head office. The Branch Office’s liabilities arising from doing business in Thailand will not be limited within Thailand but extends to the head office overseas. The branch office is the difference from a representative office as branch office are allowed to conduct a much broader range of activity than the representative office, it is able to conduct various activities such as sell and buy goods, sign contracts, render services, regardless of whether they generate any income or not. If the business to be operated is a restricted business under the Foreign Business Act B.E. 2542 (FBA), it needs to apply to the Ministry of Commerce for obtaining Foreign Business License (FBL) before starting the operation.
According to the requirement of Foreign Business License, the investment capital must not be less than 25 percent of the estimated average annual operating expenses of the operation for the first 3 years but not less than 3 million baht.

Foundation

Foundation is assets which are provided for the objectives of public charities, religion, arts, science, literature, education, or any other public interest only, Foundation shall not pursue any interest to allocate for their members, Asset management of foundation must not be the benefit for any person, except used for operation in pursuant to the objective of that foundation.

The requirement for foundation registration

  • Foundation must have an asset for value at least THB500,000, at least THB250,000 in cash and this amount cannot be used for any expenses, it must be retained in the bank account.
  • Must have regulation of the foundation and it does not conflict with the law.
  • Must have at least three persons to form a board of director for the establishment and manage the foundation in pursuant to the objectives.
  • Must have official name and address to be registered under the Commercial and Civil Code, the revision edition B.E. 2535
Foundations are juristic persons can take legal actions, enter into contracts, employ people, sponsor Visa and Work permit, foundations are taxable, the tax rate is 2% or 10% which depending on the source of income.

Joint Venture

Joint Venture is described as a group of persons (natural and/or juristic person) entering into an agreement in order to carry on a business together. Joint Venture can be incorporated joint venture or Unincorporated joint venture, it is required at least one of the joint venture partners be a juristic person, the joint venture must have two elements:
  • A Joint in investment and sharing profit or loss according to the joint venture agreement.
  • The partners have a mutual right to control the project and have the joint responsibility to third parties that involved in the joint venture.
The Revenue Department treats a joint venture as a juristic company for purpose of tax liability so joint venture must apply for a taxpayer identification card as well as Value Added Tax registration is required.

Foreign Business License (FBL)

According to list 3 in Foreign Business Act 1999 which allowed the foreigners to do business in Thailand with over 49% foreign ownership. If you are the foreigner who wishes to do a business under this category, you have to apply for obtaining a Foreign Business License (FBL) before you can commence operation.
Business in list 3: in respect of which Thai Nationals are not ready to compete with foreigners.
  1. Rice milling and production of flour from rice and economic plants.
  2. Fishery only in respect of the hatching and raising of aquatic animals.
  3. Forestry from a grown forest.
  4. Production of plywood, veneer wood, chipboards or hardboards.
  5. Production of lime.
  6. Provision of accounting services.
  7. Provision of legal services.
  8. Provision of architectural services.
  9. Provision of engineering services.
  10. Construction, with the exception of:
    (a) Construction of structures for delivery of infrastructure public services in the sphere of public utilities or transportation requiring the use of special apparatuses, machines, technology or expertise, with the minimum capital of five hundred million Baht or upwards from foreigners;
    (b) Construction of other types as prescribed in the Ministerial Regulation
  11. Brokerage or agency businesses, with the exception of:
    (a) being a broker or an agent in the sale or purchase of securities or in services related to futures trading of agricultural commodities or financing instruments or securities;
    (b) being a broker or an agent in the sale, purchase or procurement of goods or services necessary for the production or the provision of services amongst affiliated enterprises;
    (c) being a broker or an agent in the sale or purchase, procurement, distribution or acquisition of domestic and foreign markets for the distribution of domestically manufactured or imported goods, which is in character the operation of international trade, with the minimum capital of one hundred million Baht or upwards from foreigners.
    (d) being a broker or an agent of other types as prescribed in the Ministerial Regulation.
  12. Sale by auction, with the exception of:
    (a) a sale by auction which, in character, involves international bidding of items other than antiques, objects of antiquity or artistic objects that are artistic works or handicrafts or objects of the antiquity of Thailand or of historical value of the country;
    (b) sales by auction of other types as prescribed in the Ministerial Regulation
  13. Internal trade related to traditional agricultural products or produce not yet prohibited by law.
  14. Retail sale of goods of all types with the total minimum capital in the amount lower than one hundred million Baht or with the minimum capital of each store in the amount lower than twenty million Baht.
  15. Wholesale of all types with the minimum capital of each store in the amount lower than one hundred million Baht.
  16. Advertising business.
  17. Hotel business, with the exception of the hotel management service.
  18. Guided touring.
  19. Sale of food and beverages.
  20. Cultivation, propagation or development of plant varieties.
  21.  Other service businesses, with the exception of service businesses as prescribed in the Ministerial Regulation.
A foreigner permitted to operate the business under the Foreign Business Act B.E. 2542 (1999) is under a duty to comply with the following requirements:
  1. Loans from banks or other financial institutions which are incidental to a licensee’s business operations can be made to an amount not exceeding the proportion of one part capital/ remitted foreign currencies to seven parts loan
  2. At least one director/representative who is in charge of the operation of permitted business shall be domiciled in Thailand
  3. Bringing or remitting the minimum capital into Thailand for the commencement of business operation
    3.1. The time period for bringing or remitting. A natural person or juristic person not registered in Thailand must bring or remit foreign currencies as the minimum capital into Thailand from the commencement date of the business operation or the date of license in satisfaction of the following criteria:
    3.1.1. In the case where the period of business operation is less than three years, the minimum capital must be brought or remitted into Thailand within six months.
    3.1.2. In the case where the period of business operation is 3 years or more, the minimum capital must be brought or remitted within 3 years:
      – During the first three months, not less than twenty-five percent of the minimum capital must be brought or remitted into Thailand;
      – Within one year, fifty percent of the minimum capital must be brought or remitted into Thailand;
      – The remainder must be brought or remitted into Thailand each year in the amount of not less than twenty-five percent of the minimum capital (provided that the amount of minimum capital must be converted into Thai Baht pursuant to the reference exchange rate at the date of bringing or remittance of minimum capital into Thailand).
    3.2. Evidence of bringing or remittance of the minimum capital into Thailand must be submitted to the Department of Business Development within fifteen days from the date of bringing or remittance of minimum capital into Thailand.
Application for applying FBL, required applicant’s profile, type of applied business, characteristics of business and stage of operation, capital structure, business structure, size of business, employment and most important is technology transfer plan which will be considered to be advantage to Thai economy and society as well as it needs to provide 3 years financial business plan.

For more information, please contact us Greenpro KSP Consulting Co., Ltd.
Tel: 02 210 0281

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