Establishing a Limited Company in Thailand

Laws that regulate the establishment and integration of the various types of Thai business enterprises can be found in the Civil and Commercial Code of Thailand law. A private company is established in a process that leads to the registration of a Memorandum of Association and putting the statute of the company on file. A Thai public liability company can be formed within weeks, provided the documents are in order. However, experience has shown that setting up a company in Thailand is always a unique process, making it a more time-consuming than normally estimated.

Registering the Company

The first step is to submit 3 possible names for your company name. This can be done on the website of the DBD (Department of Business Registration) or in person at one of their offices. When the name is approved you will be notified within three days.

Certain names are not allowed in Thailand:

  • names that can be associated with the royal family;
  • names of ministries and government departments;
  • names using the word Thailand;
  • names that are very similar to those of other companies;
  • names violating public morals;
  • names that are misleading.

The approved company name is valid for 30 days in which time you must acknowledge acceptance to continue with the formation of your business.

Memorandum of association

The company’s memorandum of association has to be filed with the Registrar of Company at the Commercial Registration Department of the Trade Register and it must contain the following:

  • the approved company name;
  • the province in which the company will be based
  • the company’s business;
  • the balance sheet;
  • the names of at least 3 shareholders, there must always be one more Thai Shareholder than foreign; i.e. 2 foreigners, 3 Thai.

At least three people have to sign the Memorandum of Association. The shareholders can be both Foreigner and Thai. The use of bogus Thai shareholders by the Foreigners is forbidden by the Foreigner Business Act and Land Code Act.

Share capital

A corporation in Thailand must have a minimum share capital of 1 million Baht. The registered capital must be sufficient for the intended business activities. When a company wishes to request a work permit for a Foreigner, the company must have an authorized capital of at least 2 million Baht for each work permit. So two work permits for Foreigners mean a share capital of 4 million Baht, 3 work permits require a share capital of 6 million, etc.

As soon as the ownership structure is defined, a statutory meeting is called in which the memorandum of association and the articles of association are approved, the Board is chosen and an accountant appointed.

Articles of association

The articles of association are the regulations of the company related to its internal affairs, such as voting rights and matters that prescribe the protection of rights of foreign minorities within the company, these rules can for example relate to the issuing of preferred shares. At a later stage these shares can be connected to shares to be issued, in other words, you have to buy the preference shares by increasing the registered capital.

Share certificate

In Thailand all shareholders of a company must receive a share certificate registered in their name from the company. The company itself must keep an up-to-date registration of shareholders at its main office. Bearer shares are not allowed. A share certificate is the property of the person who is registered as the shareholder at the Business Registration Department.

The share capital of the company cannot be changed in any other way than by a change of the memorandum of association of the company, ST(Statutory Meeting) or AGM(Annual General Meeting)

Statutory meeting

Within three months after the date of the statutory meeting of the members of the board, the application must be submitted to the registry, in order to establish the company.

VAT, corporate tax and sales tax

A newly founded company is liable to income tax and must request a tax ID card and a registration number for the company from the Revenue Department within 60 days. If it is expected that the gross income will exceed 1.8 million Baht annually, registration for VAT (Value Added Tax) must be done within 30 days after the date at which the gross income of 1.8 million Baht has been reached.

A newly established company must keep accounts in accordance with the procedures described in the Civil and Commercial Code, the Revenue Code and the Accounting Act. Documents can be drawn up in any language provided there is a copy in Thai available. After 12 months from registration the annual statement of accounts must be drawn up.

The tax rate for companies with a paid capital of no more than 5 million Baht at the end of the fiscal year has been set at 15% on the 1st million Baht of profit, 25% on the profit between 1 million and 3 million and 30% for profits exceeding 3 million Baht.

Management of a private company in Thailand

A company is managed by at least one director authorised by the shareholders. The director(s) (is/are) responsible for, but not limited to, the following.

  • the existence and regular keeping up-to-date of the books and documents in compliance with law
  • actual payment for the shares by the shareholders
  • the correct division of dividends in compliance with the law
  • Recording the minutes of the Annual General Meeting and inviting all the shareholders

If a company neglects to call and hold an AGM of shareholders in compliance with the Civil Code of Commerce a fine of 20,000 Baht will be enforced.

Share capital
A Company in Thailand must have a minimal share capital of 1 million Baht. The registered capital must be sufficient for the intended business activities. When a company wishes to apply for a work permit for a Foreigner the company must have an authorized capital of no less than 2 million Baht for every work permit.

Thai employees
In order to apply for a work permit; you must have at least 4 Thai citizens on your payroll for each work permit, however, there is an important exception to this. There are exceptions to this rule which are governed by the business registered.

Taxes and social contributions
In Thailand you can establish an Ltd WITH and WITHOUT tax. When you expect an income of less than 1.8 million Baht per year, you can set up a company WITHOUT TAX. In such cases you only need to submit your tax return once a year. A company WITH TAX has to submit a tax return once a month. In addition to that the company must have paid social contributions for its Thai employees for at least one month and be able to prove this. In some regions these contributions may be required for more than one month. This is an important subject when wishing to apply for a work permit.


As every application is unique and the list of required document might vary due to legislation up-dates, you should allow 6 to 8 weeks for some registrations.

If you think it could be beneficial to arrange a FREE consultation to discuss your needs, simply contact us via: [email protected] or call: +66 (0) 81 846 9193