The formation of a Thai company can open avenues for a foreign nationals to purchase property, live, or work in Thailand. Thailand is considered the hub of ASEAN with the gradual removal of trade barriers in the region.
The process of forming a company involves the filing of multiple forms with multiple government agencies. A non-Thai who wants to form a Thai company should seek the assistance of an educated and experienced corporate attorney.
The majority of shares in a Thai company must be owned by a Thai citizen unless it is exempted by special legislation or government program. Foreigners can only own up to 49% of a Thai company. The 49% ownership limit of a Thai company can be exceeded or exempted if a Foreign Business License is granted. A Foreign Business License are granted to foreign owned businesses that are unique and do not compete with Thai businesses. Prohibited foreign owned business are listed in the Foreign Business Act
The owners of the new business has to select type of business organization. The most popular form of company is a private limited company. In a private limited company, shareholders have limited liability. However, the company directors may have unlimited liability. A minimum of three promoters are required for Private limited companies. The promoters can be any natural person, Thai or non-Thai that own shares in the company.
The process with the promoters reserving the name of the company with the Department of Business Development. The promoters must submit a minimum of three names which are not similar with existing reserve names and do not violate any current ministry regulations. The DBD will choose one name out of the three.
Next, a Memorandum of Association must be filed with the Commercial Registration Department. The Memorandum must contain the company name, the value of the shares, and the names of the promoters. Following the filing of the memorandum, a statutory meeting is called. This will establish the particulars of the shares, the directors, and remuneration to the promoters. If the company has foreign workers, there are minimum registered capital requirements and employment requirements for the company.
Within three months of the statutory meeting, the directors are required to submit an application for registration of the company. During the application process, the shareholders and promoters must submit payment for the shares in the new company then sign all of the registration documents. New companies who may be liable for income tax must obtain a tax ID from the Revenue Department within 60 days of incorporation or the start of business.
After registration, the company can begin the process of getting business licenses and start the operation of the business. The new company has to keep track and book income and expenses according to procedures specified in the Civil and Commercial Code, the Revenue Code, and the Accounts Act. There are periodical financial submission requirements for the company to maintain its legal status.