As a jurisdiction for investment, Thailand enjoys stable popularity among entrepreneurs. We are talking about one of the most developed, promising, and exciting Asian countries, which provides vast business opportunities. The country's economy is quite flexible, accessible, and market-oriented. The jurisdiction offers comfortable conditions for starting and developing one's own business, which increases the state's ratings. Registering a company in Bangkok or any other city in Thailand is associated with many advantages.
Advantages of company registration in Thailand
If you intend to buy a business in Thailand or create a new one, the decision is potentially advantageous due to the following:
- stable economy;
- favorable climate for investment;
- the simplicity of the legal entity registration procedure;
- high level of confidentiality of doing business, as the data on the business is not entered into the register and is not disclosed to local agents;
- no residency requirements for shareholders;
- absence of currency control and stamp duty;
- favorable taxation conditions, in particular, due to low VAT, lack of capital gains tax;
- developed tourist sector.
Main forms of legal presence and business
The decision to open a business in Thailand can practically be implemented in one of several forms:
- Limited Liability Company is the most popular form for foreigners, implemented in the form of JSC. It can be private or public; moreover, in the form of LTD. Liability is limited to deposits. There must be at least three members for a private company and 15 for a public company. Residents of Thailand must own 51%+. The public company can offer and dispose of shares to third parties.
- A partnership is simple (100% liability of participants), registered and limited liability (the last two forms are registered as legal entities).
- Representative and regional offices are limited in areas of activity and may not have anything to do with trade, are engaged only in the distribution of information, and search for goods/services for the "parent" company.
Company registration in Thailand requires some separate steps, namely:
- Select and reserve the name of the legal entity. You will need at least three unique variants, preferably in Thai, but you can also do it in English, with the correct translation. You will need a local specialist for that. The name is reserved for one month and cannot be extended.
- Locate and formalize an official address for the future legal entity.
- Draw up constituent documents - an agreement with information about the company, its address, activities, the amount of capital, the founders, and their shares in the company. It is signed by all participants and two witnesses and is drawn up in two copies.
- Hold a meeting - the shareholders must approve the Charter and appoint the directorate.
- Form and submit the registration package for review. Among other things, it is necessary to fill out an application, which can be submitted no later than three months after the meeting. Thai business owners provide information about their sources of income. The director also needs to draw a receipt confirming the funds' transfer by the shareholders for his Central Bank.
- Registration with competent authorities to pay taxes and fulfill social security requirements. The authorities have two months to obtain a Tax ID. With it, it is possible to get a work permit.
- Opening a bank account with a local or international bank.
- Obtaining a license to carry out regulated activities by a legal entity.
Prifinance lawyers are ready to develop a customized incorporation plan for you, taking into account the peculiarities and background of your business case. Provide details to build a customized strategy for the incorporation of your company in Thailand.
Legislation and regulatory environment
Thailand provides a very favorable environment for entrepreneurship while at the same time remaining focused more on resident entrepreneurs. If we are talking about a local legal entity, 100% of the capital may belong to a non-resident owner only if he received a business license. The government grants it to those who have invested heavily in the Thai economy, transferred strategic technology, or employed many citizens. In all other cases, foreign entrepreneurs can not own up to 49% of the property. There is an opportunity to avoid restrictions. For example, to be engaged only in export operations. It is also possible to concentrate in their hands the management and the right to sign - the company director can be one, and this position is allowed to non-residents. One crucial nuance should be noted - if a foreign investor does not plan to conduct activities within the country (i.e., without an office and local counterparties), then he does not need to engage a resident as a director. It is not necessary for trade, but a resident director may be required for other activities.
At the same time, opening a company in Thailand is an opportunity to purchase land and real estate. Companies and partnerships registered under local law pay income taxes on profits from inside and outside Thailand. Businesses must file regular reports, undergo audits, and pay taxes on earnings of up to 20%. There are reduced rates for some small and medium-sized companies, but in general, it can not be said that Thailand is low-tax, and in the list of such jurisdictions, it is not. If the company's turnover exceeds 1.8 million baht, you will need to get a certificate for VAT. Nevertheless, the incorporation in Thailand can be beneficial in specific industries. Prifinance lawyers are ready to advise you in more detail on the issue.
Thailand's tax system
Suppose you plan to buy a business in Thailand or create a new one. In that case, the decision must be evaluated under the following features of taxation of entrepreneurship in the country:
- Corporate tax - up to 20%.
- VAT - 7%.
- Withholding Tax (for non-residents) - (1) Dividends - 10%, (2) Interest - 15%, (3) Royalty - 15%.
- Capital Gains Tax (corporate/individual) - see corporate tax/income tax.
Open a business in Thailand: how Prifinance lawyers can help
If you decide to open a business in Thailand, the Prifinance lawyers will be happy to help at all stages of its creation, including:
- assess the background of your business case;
- develop solutions for the most convenient implementation of your business tasks and projects;
- select the appropriate form of legal entity for your project;
- collect the necessary data and documents;
- prepare and execute all documents needed for registration of a local legal entity;
- generate and submit the required package of documents for review;
- negotiate with all local state authorities;
- to open bank accounts;
- provide accounting services for the future enterprise;
- assist in resolving any issues that may arise in the course of the legal entity's activity up to its liquidation.
Provide input on your business case for personalized advice and suggestions.