A limited company is the most commonly preferred business type in Thailand. It offers the benefit of limited liability, shielding shareholders from extensive financial exposure.
Registration of a Thai limited company involves filing a Memorandum of Association with the Department of Business Development (DBD). It requires providing details of the proposed business objectives, registered office address and identification documents of the shareholders, directors or promoters.
Company Name
This is the most common type of business in Thailand as it is easy to set-up and it offers limited liability for shareholders. It is similar to an LLC in the US or a Pte Ltd in Singapore or GmbH in Germany. It is also a very popular choice for foreign entrepreneurs as it provides a sense of comfort that they might not feel when establishing another type of business structure.
To establish a Limited Company, you will first need to reserve the company name with the Department of Business Development (DBD). The company name must not be identical or too similar to existing registered companies in Thailand and must end in ‘Limited’.
After reserving the company name, you will need to prepare and file the Memorandum of Association with the DBD. This document must include the company name, the province where the company will be located, the company’s objectives, the declaration that the liability of the shareholders is limited, and the names and details of three promoters. The promoters can be either Thai or foreign nationals and must own a minimum of 50% of the shares in the company.
Once the documents have been filed, you will need to obtain an official company stamp which must be applied on all legal documents and bank transactions. It also serves as a proof of the company’s authenticity and authority. The company must also comply with accounting and auditing regulations and submit annual balance sheets to the DBD.
Shareholders
The main advantage of this business structure is that it offers limited liability to the shareholders, which is defined by their share capital contributions. This makes it a popular choice for foreign entrepreneurs who wish to start a business in Thailand. Other structures, such as partnerships and sole proprietorships, do not offer the same level of protection.
In a private limited company, the promoters (shareholders) must be natural persons and may be Thai or foreign. The number of shareholders must be at least three and the maximum percentage of shares that can be held by foreign investors is 49%, depending on the type of entity.
ATA Services can help you to register a private limited company that allows you to maintain full control whilst maintaining a maximum of 49% foreign ownership. There are various ways of doing this, including setting up a nominee director or providing the nominee with Thai bank statements that show they have enough funding to pay for their shares.
The Articles of Association can include provisions for determining the voting rights of the shareholders and other matters affecting the company’s internal affairs such as weighted voting, restrictions on foreign directors and minimum shareholding requirements in order to qualify for certain business licenses. The company must also prepare share certificates and the shareholders’ register book. Annual shareholder meetings must be held within six months of the date of registration and at least once every 12 months thereafter.
Directors
A Thai Limited Company is a legal structure for business ownership that gives the shareholders a clear separation between their assets and debts and also makes it easy for foreigners to gain work permits for employees. As a result, a registered Thai company can seem more professional and credible to potential clients and partners. Depending on the intended business activities, the new company may need to obtain certain licenses or permits in order to operate. These are generally subject to restrictions in terms of foreign share ownership and directorship and minimum capital requirements.
The director of a Thai company is a key decision maker for the business. They are responsible for preparing and filing company documents with the commercial registry in Thailand, attending meetings of the Board of Directors and holding general assemblies. Directors are also obligated to keep records of the company and ensure that all shares have been paid for.
In addition, the law requires that at least one authorized director be chosen to sign documents on behalf of the company. This is akin to a legal representative and can be of any nationality residing in any country but it is recommended that a number of directors be appointed who reside in the country. This is especially important when the company is to apply for a work permit on behalf of a foreigner as the authorities need proof that the company has the financial capacity to support this process.
Registered Office
To register a business, it’s necessary to designate a registered office. This must be located in Thailand and must have permission from the property owner if it’s a rented location. It also needs to be a place that is readily accessible for authorities and stakeholders to visit. The company’s directors must be available to answer questions in person. If a director is a foreign national, he or she must have a valid passport and work visa for the country.
There are several different kinds of business structures in Thailand. The most popular option is a limited company, which offers liability protection for shareholders. This is a good choice for small businesses, as it doesn’t require a minimum capital amount and has a flexible management structure. It’s also easy to establish, and the minimum share requirement is low.
Once a company is registered, it must apply for and receive a tax identity card. It’s also required to follow accounting procedures specified in the Civil and Commercial Code, the Revenue Code, and the Accounting Act. In addition, the company must conduct an audit of its accounts and file a report with the Department of Business Development. A company bank account is also required to handle financial transactions. Choosing which bank and branch, what type of accounts, and who will sign are some of the important considerations.
