What is a Thai limited company?
A limited company (LC) in Thailand is established with capital divided into shares. According to Section 1096 of the Civil and Commercial Code, shareholder liability is limited to the amount, if any, unpaid on their respective shares. Company formation in Thailand requires at least three persons to promote and establish a limited company by subscribing their names to a memorandum and adhering to the requirements and procedures to register a Thai limited company.
Two types of limited companies can be established in Thailand: a private limited company (Co., Ltd.) and a public limited company (PLC). A Private Limited Company is legally registered separately from its shareholders so that the company owns the assets, liabilities, and profits, not the shareholders. A Public Limited Company is a publicly traded company where public members can buy shares and, as a result, become shareholders in the company.
Register a Thai limited company in 6 steps
Registering a Thai limited company requires several steps, and foreigners must understand each step to avoid complications. Here are the seven steps in Thai limited company registration.
Step 1: Register your company name
Thai limited company registration starts with reserving a company name with the Department of Business Development (DBD). The name must be available, not coincide with any name of already registered companies, and comply with the DBD’s rules for naming. To improve your chances of approval, apply for three name choices.
Step 2: File a Memorandum of Association
To register a Thai limited company, you must sign and file the Memorandum of Association (MOA). Every limited company must have a memorandum that includes all of the vital information about the company, including the nature and principles of the company and its objectives. The memorandum must be filed with the Department of Business Development.
The memorandum must contain the following information when registering a Thai limited company:
- The proposed company’s name ends with the word “Limited”
- The address of the registered office within Thailand
- The objects or purpose of the company
- A statement that shareholder liability is limited
- The amount of the total share capital proposed to be registered and divided into shares of a fixed amount
- Their names, addresses, occupations, signatures, and the number of shares each takes
Step 3: Organise a statutory meeting
The third step of registering a Thai limited company is holding the statutory meeting, also known as the First Annual General Meeting. In the statutory meeting to be held within 30 days of incorporation, the company’s articles and by-laws will be established and must be attended by 2/3 of the directors. The company auditor will be appointed in the statutory meeting, and the meeting minutes must be filed with the Department of Business Development within 15 days.
Step 4: Company registration
A Thai limited company needs to register with the Department of Business Development (DBD) within the Ministry of Commerce. The DBD deals with business registration, supervision, and promotion, including e-commerce and trade associations. A business will have no formal legal entity or right to operate in Thailand without proper Thai company registration.
Step 5: Open a business bank account
After the registration of the company in Thailand has been accomplished, the next particular step is to open a corporate bank account.
To open a corporate bank account in Thailand, you must provide the following:
- Certificate of Incorporation
- Articles of Association
- Memorandum of Association;
- List of directors
- List of shareholders
- Power of Attorney and passport of the grantee (in this case, if the signing party is not the director of the company)
- Minutes of the board meetings
- Copy of the citizen ID card or passport of directors and signers if not a director
Step 6: VAT or SBT registration
Registration for Value Added Tax (VAT) or Specific Business Tax (SBT) is required to register a Thai limited company, depending on its business operations. VAT applies to the sale of goods and services, with a standard rate of 10%; however, this rate is currently reduced to 7% until September 30, 2025. In contrast, Specific Business Tax is imposed at fixed rates on the gross income of certain businesses that are not liable for VAT. These specific businesses include commercial banks and similar financial entities, which are taxed at 3%.
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Frequently Asked Questions (FAQs)
Can foreigners start a limited company in Thailand?
Yes, foreign nationals can start a limited company in Thailand, although some business operations may need a Thai majority ownership or a Foreign Business License.
How much does it cost to establish a Thai limited company?
Setting up a limited company in Thailand entails formal registration charges anywhere from ฿ 5,000 ($149) to ฿ 250,000 ($7,435), based on the registered capital, and charges for legal advice and administrative expenses generally amount to between ฿ 40,000 ($1,190) and ฿ 60,000 ($1,784).
How long does it take to set up a Thai limited company?
Setting up a Thai limited company usually takes 3 to 10 business days, depending on document preparation, name approval, and government processing times.
What are the requirements for Thai limited company registration?
Registering a Thai limited company requires a Memorandum of Association (MOA), Articles of Association (AOA), company affidavit, shareholder and director identification, name reservation of the company, proof of registered address, completed registration application form, and a Power of Attorney where necessary.
Can a Thai limited company buy property in Thailand?
Yes, a Thai limited company, an independent legal entity, can purchase land in Thailand if it has a majority of Thai shareholdings and conforms to land ownership rules.
How to register a company in Thailand?
To register a Thai company, you should begin by reserving a company name and preparing the documents to be submitted to the Ministry of Commerce. You must then register with the Department of Business Development (DBD) as per the law. Further steps involve acquiring a Tax ID and VAT registration if required and following specific licensing rules dependent on the nature of the business being formed, whether it is a partnership, limited company, or public company.
