Thailand is a vibrant and dynamic market that offers numerous opportunities for business. One common way to establish a business presence in Thailand is by registering a limited company. This type of business entity is favorable for both small and large enterprises as it limits the owners’ liability to their shares in the company. This article provides a step-by-step guide on how to set up a limited company in Thailand, including the necessary steps and requirements.
Requirements for Registering a Limited Company in Thailand
Here are the key requirements for setting up a limited company in Thailand:
- Shareholders: A minimum of three shareholders is required, who can be either individuals or juristic persons.
- Directors: At least one director is needed. The director can be of any nationality but must be of legal age.
- Capital: The minimum capital requirement varies based on the type of business and whether the company will be hiring foreign employees.
- Company Secretary: Although not mandatory, having a company secretary is advisable to ensure compliance with statutory requirements.
- Registered Address: The company must have a registered address in Thailand, which cannot be a P.O. box.
- Compliance: The company must comply with all relevant laws, including the Civil and Commercial Code, the Revenue Code, and the Foreign Business Act.
Step-by-step Guide on How to Set up a Limited Company
Step 1: Name Reservation
Before you can register a limited company in Thailand, you need to reserve a company name. This can be done online via the Department of Business Development (DBD) website. The name should not be the same or too similar to existing companies. Once approved, the name reservation is valid for 30 days.
Step 2: File a Memorandum of Association
The next step is to prepare and file a Memorandum of Association with the DBD. The Memorandum should include:
- The proposed company name
- The province where the company will be located
- The company’s business objectives
- The capital to be registered (which should be sufficient for the intended business operation)
- The names of the shareholders
All shareholders must sign the Memorandum of Association, and their signatures must be certified.
Step 3: Convene a Statutory Meeting
Once the Memorandum is filed, the next step is to convene a statutory meeting. During this meeting, the shareholders will:
- Approve the company’s Articles of Association (AoA)
- Ratify any contracts entered into and any expenses paid by the promoters
- Determine the method of payment for shares
- Appoint the initial directors and auditors and set their respective remuneration
Step 4: Register the Company
Following the statutory meeting, the directors have 3 months to apply to the DBD to register the company. They will need to submit a list of documents, including the approved Memorandum of Association, a report of the statutory meeting, a list of shareholders, and details of directors and their powers.
Step 5: Register for Tax
After the company is registered, it must obtain a corporate tax ID number from the Revenue Department within 60 days. The company must also register for VAT if its annual income exceeds 1.8 million baht.
Setting up a limited company in Thailand involves several steps, from name reservation and filing a Memorandum of Association, to convening a statutory meeting and registering the company with the DBD and the Revenue Department. Understanding these steps and requirements can help streamline the process, and help you successfully establish your business presence in Thailand. Always consider consulting with a local legal advisor to ensure a smooth process and compliance with all local laws and regulations.