A Thai Limited Company can be a great vehicle for conducting business in Thailand. However, it can be a complicated process to establish a new one.
Some of the main steps include reserving a name, incorporating the company, and maintaining accounting records. In addition, companies must file annual reports and pay taxes.
Reserving a Company Name
A company in Thailand must have a name registered with the Department of Business Development (DBD). The company name must be in Thai, but it can also be in English. The name must be unique and must contain the word “Limited”. The process can normally be completed within one to three days.
The process starts by submitting a name reservation form with DBD. The registrar must confirm that the company name does not conflict with any ministry rules and that it is not similar to another existing company name. The registrar will then approve the name. Next, a statutory meeting is convened to draft the by-laws of the company and to ratify the Articles of Incorporation. The company must also open a bank account and obtain any needed industry-specific licenses.
Incorporating a Company
A company is a legal entity that is established for a long-term period. It operates until the owners cannot manage it anymore, and the company is dissolved. During the process of setting up a business, entrepreneurs must follow several steps. These include reserving a company name, filing a memorandum of association, holding a statutory meeting, and registering the company. The business must also register for VAT (Value Added Tax) and follow accounting procedures.
To incorporate a company in Thailand, there are some requirements that must be met. The first is reserving a company name. This is done by submitting three names to the Department of Business Development, ordered by priority. The second requirement is preparing the articles of association. This includes the amount of capital deposited, the shareholders and directors of the company, and the purpose of the business.
Maintaining Accounting Records
Regardless of the type of company chosen, it is crucial to follow accounting procedures set by Thai law. The process involves filing a financial statement and keeping clear records for your business.
Incorporated companies in Thailand must prepare financial statements and publish them within one month after the shareholder meeting. Failure to comply can result in a fine of up to Baht 50K.
Incorporated companies must also display their business registration certificate in a visible place in their office. If the certificate is lost, they must apply for a replacement within 30 days. If they wish to open a bank account, they must provide a proof of address. They will also need to pay stamp duty on several documents and register for VAT if applicable.
Purchasing Land
Purchasing land in Thailand is a complicated process that requires the help of competent professionals. It is a good idea to have a lawyer accompany you during this process to verify administrative documents and to accompany you through the Department of Land purchase process. For foreigners, the best way to buy property is through a locally registered company with Thai ownership of 49% or less.
However, to obtain 100% non-Thai ownership, you will have to be approved for a foreign business license or be promoted by the Board of Investment or register through the Treaty of Amity (for Americans). Purchasing average farmland is not easy as many Thais are in debt up to their eyeballs and only willing to sell their property if they have a buyer who is desperate to buy.
Registration with the Tax Authorities
Private limited companies are governed by the Civil and Commercial Code Section 1097. A minimum of three natural persons are required as the promoters (initial shareholders). Foreigners cannot participate directly in company affairs, however they can do so indirectly through directors. The share structure of the company has to be specified, and a statutory meeting held where the articles of incorporation and by-laws are drafted and an auditor and board of directors appointed.
The company is then registered with the Department of Business Development. The company must also be registered for tax purposes with the Revenue Department. Our specialists will help you obtain the necessary certificates. In addition, you will be given a personal taxpayer registration number that is required in order to open a bank account.
