Do you have the next great business plan and want to register your company in Thailand?
Foreigners are attracted to Thailand because it’s a great country to start a business or invest in.
But before making the dive, do your homework and make sure you’re ready to commit a few years to living and growing your company in Thailand.
This guide shows you which company registration choices you have, how to get business visas and work permits, and all the other odds and ends of running a business in Thailand.
If you need help, reach out to us and we’ll put you in touch with someone who can help you set up and market your company in Thailand.
Get your FREE Thailand Starter Kit by entering your email below. The Starter Kit, based on our experience with living and working in Thailand for 10+ years shows you how to start your life in Thailand hassle free while saving thousands of dollars on rent, insurance, banking, and more.
- 1 Exclusive Content
- 2 Incorporation Options
- 3 Incorporating Companies in Thailand
- 4 Planning Your Company
- 5 Setting Up Your Company
- 6 Running Your Company
- 7 Now, on to You
Below are a few ways you can incorporate your company in Thailand.
If you’re not familiar with company laws in Thailand, it can be tough to decide the best way to incorporate your company.
Because of the complexity and time it takes to set up a company in Thailand, use a lawyer who has experience registering companies here.
If you need help registering your business in Thailand contact us. We’ll put you in touch with an ethical and professional layer.
A Limited Company is the most popular registration choice for foreigners who want to do business in Thailand.
With Limited Companies, shareholders can only own a limited amount of unpaid shares they hold.
Also, the directors of the company can apply for work permits.
According to the Thai law, you register a Limited Company by dividing capital funds into shares.
To register a Limited Company, you need at least three promoters and shareholders. The promoters and shareholders can be the same people.
These three people include a director, an auditor, and a registrar to create the Memorandum of Association.
Every promoter gets at least one share, and the first payment on the shares must not be less than 25% of their nominal amount.
Promoters arrange for accounting specified in the Civil and Commercial Code and the Revenue Code of Thailand and submit balance sheets to the authority every year.
Even if the Limited Company seems best for foreigners to register a company in Thailand, Thai law limits foreign ownership to 49% of all shares. The share structure is 51% for Thais and 49% for foreigners.
Board of Investment Promotions
For those who want to own 100% of their company, the Board of Investment is your only choice in 2019.
Companies promoted by the BOI get help with visas and work permits and don’t have to pay corporate taxes.
But not all companies can get a BOI promotion.
The BOI has their own categories to specify which types of companies they promote.
And each category has different needs. You can find out how to register a 100% foreign-owned BOI company in our in-depth guide.
Applying for a BOI promotion is challenging and time-consuming. After you apply, you need to go to the BOI several times for your company. The whole process takes about one to two months.
After the BOI promotes your company, you have to report financial status regularly so the BOI continues to promote you.
Although you can do everything yourself, get in touch with a corporate lawyer or an accounting firm to help you.
Feel free to get in touch with us for more help.
A sole proprietorship is a registered company owned by one person, who is also the operator.
Even though foreigners can do business as a Sole Proprietorship, it may be hard to incorporate if the company doesn’t qualify.
According to the Thai Civil and Commercial Code, there are three types of partnerships in Thailand:
- Unregistered Ordinary Partnerships
- Registered Ordinary Partnerships
- Limited Partnerships
Unregistered Ordinary Partnerships
With this partnership, all partners are jointly liable for all obligations of the partnership.
Also, Unregistered Ordinary Partnerships isn’t considered a legal entity. The partners are still accountable for any mishaps.
Registered Ordinary Partnerships
For this kind of partnership, you have to register with the authorities.
With Registered Ordinary Partnerships, the company has legal rights, duties, and liabilities separate from its partners.
This kind of partnership has two types of partners:
- Unlimited Liability Partners
- Limited Liability Partners
Unlimited Liability Partners are liable no matter how much capital the partners contributed to the partnership.
Limited Liability Partners are liable only for the amount of capital the said partners contributed to the partnership.
Even though registering partnerships is easier than registering other company structures, the three partnerships above don’t let you apply for work permits.
You also can’t open corporate bank accounts under the company’s name.
Incorporating Companies in Thailand
You must prepare the documents required by the DBD and meet the qualifications.
The DBD has offices in Bangkok and other provinces, making it convenient to register a company outside of the city.
You can submit your documents for company registration at any office, no matter where your company is.
But if you make any changes to your company, you must do it at the DBD in your area.
For Sole Proprietorship and Partnerships, the registration’s procedures and lists of documents are simple.
But for Limited Companies, you need more procedures and documents to register your company.
To incorporate and register Limited Companies, you have to reserve your business’s name according to the guidelines of the DBD.
Afterwards, you have to arrange a meeting to incorporate your company, then prepare all documents for submitting and registering a Memorandum of Association and Company Registration.
You must do this on the same day, within the time frame set by the DBD.
If you need help incorporating your company in Thailand, reach out to us and we’ll put you in touch with someone who can help.
Planning Your Company
A lot goes into starting a company in Thailand. And planning should be the first step.
Below is an example of how you should research your business, find a Thai partner, and define your business goals.
Researching and Finding Your Niche
Most people’s companies fail in Thailand because they choose to take shortcuts or “go with the flow.”
The first and arguably most important step in starting a business in Thailand is doing your market research and finding your niche.
Spend some time doing market research, analyzing competitors, and immersing yourself in the community. See what is lacking in Thailand and find out how to fill that need.
Learn Thai as well. It could help you talk to your Thai employees, partners, and service providers.
You can also talk to other business owners and got their opinions on the local market.
If your marketing plan involves an online business, talk to a local digital marketing agency like Enabler Space. They know the Thai market and can suggest marketing ideas to help you execute strategies to increase your profits.
Once you know your market, you can think about marketing strategies to promote your company.
If you open a restaurant, for example, give away free shots to first-time patrons or give away free drinks throughout the night.
But you should find ways to set your company apart from competitors, network, and have a back-up plan for low seasons.
There are many commercial risks a company could face. Do your research before starting a company.
Finding Thai Partners
If you’re considering staying in Thailand long-term and starting a company, find a genuine Thai partner.
Someone who knows the landscape, speaks the language and can handle administrative and staffing procedures is a huge asset.
Thais can handle the local authorities and staff much better than you can and likely know people, and that helps lower costs.
This is because, in Thailand, local services are generally offered at a higher rate to foreigners.
Thais quote locals a cheaper price for cleaning services, taxi services, or general contracting services.
Your Thai partner can get quotes from 50% to 75% cheaper than what you might get.
This is key, even though you can still own and run on your own company. Having a Thai national as a partner makes things much easier.
Some people choose to have a paper partner, someone who owns 51% but has no say or genuine ownership of the company.
Though this practice is common with foreign-owned companies, it could pose problems down the road. People use other tricks to get past this rule.
In Thailand, the laws change all the time, and only someone who follows those changes can tell you what’s best.
Make friends with a Thai professional in your field. They can help you run your company and hold company shares.
If you have a Thai friend you trust, they can hold company shares on your behalf and sell the shares to you when you ask for them.
In Thailand, a foreigner can only own 49% of a company. But having a trusted friend own shares is a common practice if you want to control your company.
Defining Clear Goals
The next step is to set clear goals between all the people involved, set your salary, and think about a budget for staff, rent, and other expenses.
To give you an idea on what you could spend every month on a small company with five employees, check out the table below.
Below is a list of costs. They aren’t exact. But they give you an idea of what to expect.
|7 Staff Salaries||80,000 baht|
|3 Partner Salaries||75,000 baht|
Make sure you have enough to cover these costs for the first six to twelve months.
Setting Up Your Company
Setting up a company is the most challenging part. This is where you face all the legal hassles.
And if you come across any problems, it could throw you for a loop and deflate the excitement of starting your own company.
Registering companies in Thailand is a challenging process. But here’s a summary of what you need to do:
First, book your company’s name so your company’s name isn’t the same as other companies in Thailand.
Then you prepare your company’s registration documents, including a list of share holders, meeting notes, and proof of payment of share capital.
Then you register your company at the DBD. The DBD lists the registration procedure on their website.
You can do it yourself if you know how to read and write Thai since all paperwork is in Thai. You need to fill in the form with the exact wording that’s expected by the DBD.
If you can’t do it yourself, hire a lawyer to help you.
Once you register your company, you may have to register for VAT and get licenses for your line of business.
You may need other licenses to do business in Thailand. But this depends on your company size and type.
Applying for VAT
You need to get a VAT license once your company makes over 1.8 million baht in annual revenue.
Once your company exceeds the annual revenue of 1.8 million baht, you need apply for VAT within 30 days with the Revenue Department in your area.
Applying for Other Licenses
Depending on your company type, you may need to get other licenses.
If you open a restaurant, you need a license for liquor and music. If you run a shipping company, you need an import and export license. If you import food and drugs to sell in Thailand, you need a license from the FDA.
Double check with your lawyer to avoid fines or other problems down the line.
You can also used an accounting firm. They make sure you have the right paperwork and apply for you.
Firms may ask for photocopies of your bank account and a map of your company’s location. You then have to wait for these licenses.
The wait times differ by province, region, and license, so do your homework as Thai bureaucracy changes these processing times.
You have to pay about 600 baht to 2,000 baht for each of these licenses. You need to renew some licenses, like liquor and music licenses, every year.
If you run a restaurant, the most important license most people forget about is the music license. You can get a fine by the so-called music police if you don’t have one.
This license is mainly to make sure the local and international artists get paid their royalties for the music you play in your restaurant.
If you play anyone else’s music then you need a license. Having a license stops the music police from harassing or extorting you.
Finding Office Spaces
You have two choices when it comes to office spaces: serviced offices and traditional offices.
Serviced offices are a good choice if you don’t want to deal with all the small details that come with setting up an office: buying furniture, setting up phone and internet accounts, supplying your employees with drinks and coffee, finding maids and cleaning equipment. The list goes on.
With a serviced office you can sign a contract, bring your laptop, and start doing business the same day.
Traditional offices, on the other hand, are more complicated and expensive to set up. You need to invest in furniture, set up phone and internet accounts, and you might even need to hire an administrator to keep up with the inner workings of the office.
Using traditional offices does make sense in some cases, like if your office is attached to your business or your team is getting big. For us, we use a traditional office because we run a restaurant and have room for an attached office.
Do you need help finding an office? Reach out to us, tell us what you need, and we’ll put you in touch with a reliable office provider.
Getting Visas and Permits
Getting visas and work permits for you and your employees is challenging.
Hire a lawyer who specializes in this field. Below is the process to get visas and work permits.
Although you can do it yourself, you can also hire an accounting firm to help you handle the paperwork.
You can apply for a business visa at any Thai embassy outside of Thailand. Malaysia, Cambodia, Laos, and Singapore are popular countries.
To apply for a Non-Immigrant B Visa, you need:
- copies of your company registration
- a letter from the local labor ministry
- a letter from the Thai partners of your company offering you the position you’re working
Here’s a list of the documents you need.
You can find an agent near Thai embassies who double-checks your paperwork and applies on your behalf. The fee is around $20.
Having a Non-immigrant B Visa doesn’t entitle you to work. The only way you can legally work is to get a work permit.
Once you have your work visa, you have to fly back to Thailand and apply for your a permit.
Foreigners who get work permits needs to have four Thai workers per foreigner working in the company, plus two million baht in capital, unless you’re promoted by the BOI.
For two work permits, you need eight Thai employees and four million baht in capital.
You can work once you have applied for a work permit and are waiting for it to be approved.
The entire process takes more than a month, from applying to receiving your work permits.
But if you have all documents ready, the process can only take a few days.
Check out our in-depth guide to Thailand work permits for more info.
Opening Company Bank Accounts
Once you’ve registered your company and received your registration, you can get a company bank account.
There isn’t a major difference between banks. Choose the one that’s most convenient for you.
You may need someone to introduce or refer you, as banks are hesitant to open accounts to foreigners.
The accounting firm that registers your company can refer you to a bank. Once you open an account, ask the bank to give you an online banking account. It’s going to make it easier to handle your finances.
When getting a company credit card, most banks only give you credit once you have been operating for a few years.
Some people can get company credit cards earlier. But they’re unsecured credit cards, meaning you must deposit the entire amount of credit in the bank as collateral.
When it comes to hiring staff, you have a few choices.
For other positions, you can hang a sign saying “Staff Wanted,” post the job in a local Facebook group, or get referrals from locals.
Aside from salary, you can offer your staff meals, drinks, and snacks on the house. You can let staff drink with patrons and within reason, for free.
You can give all your staff a 2,000 baht bonus every Songkran, or Thai New Year.
But these extras are up to the employer and are not necessary by Thai law. Other employers gave staff a place to sleep and helped with travel.
When you have staff you like, pay them fairly so they don’t leave or get picked up by better-paying companies.
When you pay a fair wage, your employees could recommend your company to other potential employees.
Buying Furniture and Equipment
When it comes to buying office furniture or equipment, plan and budget everything. Know exactly what you need and how you’re planning to decorate your office.
If you use a serviced office you only need a few office supplies costing a few thousand baht.
If you use a traditional office you need to buy furniture, which costs around 10,000 baht per workstation.
If you run a restaurant you need to get kitchen equipment, signs, paint, and decorations.
To give you an idea, here’s how much it could cost to set up a restaurant.
|Kitchen Equipment||130,000 baht|
|Kitchen Supplies||70,000 baht|
|Paint Supplies||10,000 baht|
|Pool Table||50,000 baht|
|Lighting and Fixtures||35,000 baht|
|Sound System||40,000 baht|
You can everything you need for your office from OfficeMate. For furniture, take a look at IKEA.
Also check out Makro, a wholesale cash and carry where you can stock up on supplies.
They have low-priced goods. If you don’t see what you’re looking for, ask to see their catalog. They have more than what’s in their showrooms.
Another great tip for finding equipment is to look online.
Thailand’s towns have extensive Facebook pages for expats. These pages are usually full of quality, second-hand equipment and furniture.
Running Your Company
In the beginning, you need to develop your own cross-cultural management system. Thai have a much more laid back social and working culture than Western countries.
And Thais don’t express their opinions directly. During meetings, they may sit there silently. You may only find out about a problem when you talk to them privately.
You have to be mindful of how you speak to elders, regardless of whether you’re higher in the corporate structure than them or not.
It’s common courtesy to respect your elders in Thailand and use the word khun, like sir or madam, when addressing them.
You need to work through cultural differences and develop systems that help you manage your employees in an effective way.
Another major operating responsibility is filling taxes and renewing licenses.
You should hire an accountant. Usually, the same person who registered your company can do this for you. If you can’t find one, ask local business owners for a good referral.
Not paying your taxes can result in heavy fines, your work permits cancelled, or worse, jail, asset seizure, and even company shut down.
Corporate Income Taxes
The corporate tax rate in Thailand is 10% in 2019 for profits more than 300,000 baht per year, due to Revenue Department regulations.
Normally it’s between 15% and 20%.
You need to hand in corporate income taxes twice a year.
VAT and Withholding Taxes
VAT is calculated on sales of goods and services.
The current VAT rate is 7%. It’s only calculated on the difference between the price you buy the goods for and the price you sell the goods for.
Some types of company service income are subject to withholding tax, or WHT.
The company has to give Withholding Tax certificates for all transactions that fall under this category.
You must pay WHT to the Revenue Department every month. WHT rates depend on income types as seen from the Revenue Department website on Subject 6.
You can report WHT by paper before the seventh day of each month or by e-filing before the 15th day of each month.
Again, your accountant can handle these filings on your behalf.
Companies have to pay Social Security each month for employees.
Five percent of Social Security for health insurance is levied up to 750 baht per month per employee.
As an employer, you need to take out Social Security for employees and pay an extra equal amount to the Social Security office.
For example, if you pay your worker 15,000 baht, the total amount paid to Social Security is 1,500 baht, or 750 baht from the employee and 750 baht from your company.
You need to pay Social Security before the 15th of every month at the Social Security office, Krung Thai Bank, or Bank of Ayudhya.
You also have to let the Social Security office know within 30 days after you hire a new employee, and before the 15th of the next month when an employee leaves your company.
Group Health Insurance
Medical coverage for Social Security isn’t enough in Thailand.
To maintain the health of your employee and keep them around, consider buying group health insurance.
It’s optional but can attract skillful employees to your company. And you can use the expenses you pay for insuring your employees as a tax write off.
If you’re interested in buying group insurance, get in touch with a reliable broker.
Personal Income Taxes
Although it’s not a must, companies should pay personal taxes for employees.
The tax rate in Thailand is progressive, meaning it changes and your personal tax liability increases.
You can find out more in the tax section of our moving to Thailand guide.
For employees that don’t meet the minimum taxable income in Thailand, which is under 150,000 baht, you only have to pay the social security on their behalf.
Paying Foreign Employees
Thailand has four different classes of minimum wages when it comes to foreign employees. Here’s a breakdown of those classes based on Nationality.
|Minimum Monthly Wage||Worker’s Country of Origin|
|50,000 baht||Western European Countries, Australia, Canada, Japan, and the USA|
|45,000 baht||Taiwan, Hong Kong, South Korea, and Singapore|
|35,000 baht||Eastern European Countries, Asian Countries, Central American Countries, Mexico, South American Countries, Turkey, Russia and South Africa|
|25,000 baht||African Countries, Cambodia, Myanmar, Vietnam and Laos|
The amount for minimum wage changes overtime. You should recheck again with Thailand’s Ministry of Labor.
You need to hire an accounting firm to handle everything related to accounting, including:
- monthly, mid-year, and annual taxes
- paying Social Security funds
- preparing and auditing financial statements
- dealing with the Revenue Department
- providing tax advice
You need send all receipts and invoices to them every month.
Accounting fees depends on your company type and the amount of monthly transactions.
Be careful when choosing an accountant. Hire someone ethical so you avoid unexpected tax problems that could result in fines or jail time.
Some accounting firms may only offer tax fillings. They won’t deal with Social Security or handle unexpected problems with the Revenue Department.
If you want to work with an accountant who can handle everything, get in touch with Banchee Legal House.
You may face other challenges when running a company in Thailand.
To begin with, Thailand is a land of paperwork. You need to prepare and sign a piles of documents at every organization you visit.
For example, when you open a bank account you need to bring:
- A copy of your company’s registration
- A copy of BOJ 3
- Your list of shareholders
- Meeting notes with the exact words needed by the bank
- Copies of passports and work permits of all foreign shareholders
- Copies of ID cards of all Thai shareholders
- A bank application form
- A power of attorney
You may end up having to hire an admin to take care of this and then rent self storage for keeping these documents.
Another challenge is the never-ending changes that seem to arise when it comes to visas, work permits, and regulations.
There are endless changes to the laws and regulations. It’s hard to keep up with them as they seem to change every year.
You should build a network and help each other stay updated on changes.
Now, on to You
Running a company in Thailand can be a fun and rewording experience.
Once you find your niche, hire a professional team to help you set up and market your company.
So instead of doing all the tedious work on the back-end, you can do what you do best, which is serve your customers.
If you need help setting up and marketing your company, reach out to us and we’ll put you in touch with someone who can help.