Thailand continues to be an attractive destination for foreign investors and entrepreneurs due to its strategic location, well-developed infrastructure, skilled labor force, and growing economy. One of the most popular business structures for both local and foreign investors in Thailand is the Thai limited company. This structure provides flexibility, limited liability, and a formal legal identity for conducting business activities.
This guide will walk you through the key steps, requirements, and legal considerations for registering a Thai limited company, especially for foreign business owners.
What is a Thai Limited Company?
A Thai limited company is a business structure similar to a private limited company or LLC in other jurisdictions. It is a separate legal entity from its owners, and its liability is limited to the unpaid value of shares.
A limited company in Thailand requires:
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At least two promoters/shareholders (previously three, but reduced in 2023 to streamline business formation)
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A registered address in Thailand
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Thai majority ownership in most cases, unless the company qualifies under exceptions
This type of company is governed by the Civil and Commercial Code of Thailand, and its operations must comply with the Foreign Business Act (FBA) and other applicable laws.
Key Benefits of a Thai Limited Company
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Limited liability for shareholders
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Access to tax incentives and VAT registration
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Ability to obtain work permits for foreign directors/employees
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Separate legal identity for contracts and litigation
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Greater credibility with Thai customers and authorities
Step-by-Step Guide to Thai Company Registration
Step 1: Company Name Reservation
Before registering a company, you must submit at least three proposed company names to the Department of Business Development (DBD) for approval. These names must be:
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Not identical or similar to existing registered names
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Inoffensive and not misleading
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Follow naming rules set by the DBD
The approved name is reserved for 30 days, during which time you must complete the registration process.
Step 2: Prepare the Memorandum of Association (MOA)
The MOA is a foundational legal document that outlines:
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Company name
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Registered office address
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Objectives of the company (must align with permitted business activities)
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Registered capital (minimum requirement varies by industry and need for work permits)
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Name and details of the promoters/shareholders
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Number of shares and value per share
The MOA must be filed with the DBD and signed by all promoters.
Step 3: Convene a Statutory Meeting
Before registering the company, a statutory meeting is held to:
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Approve the Articles of Association (company bylaws)
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Confirm the registered capital
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Appoint directors and the company auditor
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Approve any contracts or expenses made by promoters
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Issue shares to shareholders
This meeting is a formality but must be documented and signed as part of the registration process.
Step 4: Company Registration
Within three months of the statutory meeting, the company must officially register with the DBD. You’ll need to submit:
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Application form
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MOA and Articles of Association
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Minutes of the statutory meeting
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List of shareholders
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Consent letter from the landlord (proof of office address)
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Director appointment forms and ID copies
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Company name approval document
Once approved, the DBD will issue a Company Registration Certificate and assign a company number (similar to a business license).
Step 5: Tax Registration and VAT (if applicable)
After company registration:
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If annual turnover exceeds 1.8 million THB, VAT registration is required.
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Apply for a Tax Identification Number (TIN) within 60 days at the Revenue Department.
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If hiring employees, register for social security within 30 days of their start date.
Capital Requirements
There is no minimum capital required by Thai law for most businesses. However:
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If the company plans to hire foreign employees, a minimum of 2 million THB in registered capital per foreign employee is generally required.
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Capital must be fully subscribed, and at least 25% must be paid-up at the time of registration.
Note: The capital does not need to be deposited immediately, but authorities may require proof of availability, especially for visa and work permit purposes.
Foreign Ownership Restrictions
Under the Foreign Business Act (FBA), certain business activities are restricted for foreign-owned companies. These fall into three categories:
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List 1: Completely restricted to foreigners
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List 2: Allowed with Cabinet approval
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List 3: Allowed with a Foreign Business License (FBL)
If a foreigner owns more than 49% of a Thai company, and the business activity falls under a restricted list, the company must apply for an FBL or qualify for exemption under treaties such as:
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US Treaty of Amity (for American investors)
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BOI Promotion (Board of Investment incentives)
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IEAT licenses (Industrial Estate Authority of Thailand)
Work Permits for Foreign Directors and Staff
A Thai limited company can sponsor work permits and visas for foreign staff if:
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The company has at least 2 million THB registered capital per foreign employee
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Maintains at least four Thai employees per foreigner
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Has a physical office and active business operations
Applications are submitted to the Ministry of Labour and Immigration Bureau.
Ongoing Compliance Requirements
After registration, a Thai limited company must:
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File annual financial statements with the DBD
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Submit corporate income tax returns annually and quarterly
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Maintain accounting records per Thai accounting standards
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Hold annual general meetings (AGMs) of shareholders
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Notify the DBD of changes in shareholders, directors, or company address
Non-compliance can lead to fines, penalties, or even dissolution of the company.
Common Mistakes to Avoid
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Using nominee Thai shareholders illegally: This violates the FBA and can lead to criminal charges and company dissolution.
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Ignoring visa/work permit regulations: Operating without proper permits is illegal and penalized.
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Not having a proper office address: Virtual offices are not accepted for company registration requiring work permits.
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Choosing restricted business activities without legal support: Always confirm eligibility under Thai law.
Conclusion
Registering a Thai limited company is a practical and legally sound option for doing business in Thailand. However, navigating the regulatory environment can be complex, especially for foreign investors. Understanding the process—from name reservation to tax registration and compliance—is crucial to starting a successful venture.
