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Thailand Business Setup: Company Registration in Thailand

Transcript of the above video:

This video is to just briefly go over the types of corporate entities that foreign nationals will sometimes use to conduct business in Thailand. To be clear there's another video on our channel here which discusses what's called the US Thai Treaty of Amity; I suggest those American citizens watching this video go ahead and click on that video because that is going to specifically be more information for you as the US Thai Treaty of Amity provides certain benefits that other foreign nationals do not have.

Okay. That being said, generally speaking there's really only one type of corporate entity that foreigners tend to routinely use in the Kingdom notwithstanding the fact that Thai Law allows for not just limited companies but limited partnerships, unregistered partnerships, sole proprietorships and various other types of entities. For the most part what I routinely see, especially for small businesses I deal with here in Thailand, are Thai companies set up explicitly to allow for a small business for a foreign national, basically one work permit maybe two. I strongly recommend those watching this video who are interested in work permits please click on the video on our channel regarding work permits as there’s more information on that specific issue. That being said, I'm just going to go over Thai Limited Companies with kind of an emphasis for sort of the small business owner looking to get started here in Thailand. Limited companies in Thailand are not exactly unlike their counterparts in foreign jurisdictions and not being a Thai attorney myself to be clear, I can only comment on perhaps the differences I have seen just for my own experience versus corporations in the United States. They do look quite a bit like incorporated entities say in the US or in other common law jurisdictions. One thing that those doing business in Thailand will find, is the Thai Law with respect to corporations is a bit more formalistic with respect to the operation of Thai companies, specifically things like shareholder meeting minutes, director meetings etc. Those are little bit more formalistic undertakings than we are used to dealing with in say the United States or common law jurisdictions, at least as they sit now. That being said, Thai Corporations are rather a good way of setting oneself up to do small business here in Thailand. It should be noted under the Foreign Business Act, Foreign Business Act in Thailand I should say, there's certain corporate activities which are restricted to foreign corporations or foreign majority held corporations. Those interested in doing business in Thailand are strongly recommended to do their due diligence or to find a firm to work for them to do the due diligence to ascertain whether or not the proposed business activities in Thailand are explicitly mentioned in the Foreign Business Act and if they are, if there are exemptions to any restrictions or any restrictions at all, or if such restrictions basically cannot be overcome pursuant to the Foreign Business Act. Assuming that the restrictions can be overcome or there are certain types of businesses that maybe foreign owned, that do not violate the Foreign Business Act, it's possible for a foreign national to come to Thailand and do business under such an entity.

It should be noted that notwithstanding the legality of the business's undertakings pursuant to the Foreign Business Act, an individual's undertaking pursuant to the Thai Labor Code may be restricted notwithstanding the fact that the Foreign Business Act permits a company to undertake certain types of business activity, the labor code may restrict an individual of foreign nationality from doing such activity. A final note regarding so-called 49 / 51% companies, “yes, pursuant to the laws as it currently sits it is possible to have a Thai company with 51% of the equity in said company being owned by Thai Nationals, that company would then be considered a Thai company for purposes of the Foreign Business Act and so the Foreign Business Act would not apply to said company. It should be noted that provisions in the Thai Law, specifically amendments to the Foreign Business Act and relevant acts that pertain thereto, pursuant to those regulations nominees are explicitly forbidden under Thai Law and for this reason one should not really be looking into things like "nominee" companies in Thailand because to engage in such activity could result in the company being dissolved or other possibly even criminal citations under Thai Law. So “nominees” are not a particularly good idea in Thailand. There are other ways to structure companies in Thailand which will allow a foreign national to maintain control of an entity and allow that national to even perhaps get a work permit to undertake the activity that the company has been designed to undertake. That being said it is strongly recommended that those looking into these matters undertake due diligence and possibly hire a professional assistance in the form of Thai attorneys in order to be provided with the information necessary to make a decision with respect to doing business in Thailand.