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Doing Business in Thailand
Thailand as of 2009, ranks number 13 out of 181 world economies for the ease of doing business. These procedures for setting up a company to do business in Thailand were current as of the date written.
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Your first task should be to apply for permission to use a company name which typically takes two days to complete and costs ~20 baht to lodge an application to the Registrar at the Thai Department of Business Development. You can search for and reserve a company name either in person or via the Department of Business Development's website at http://www.thairegistration.co.th
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Getting approval for a memorandum of association from the the Ministry of Commerce normally takes one day to complete and costs a minimum 500 baht, and an additional 200 baht for the official duty stamp. There is a maximum fee of 25,000 baht. The application for registration of the memorandum of association must contain the company names in Thai and in a foreign language,the nature of the business, the capital to be registered, the number and par value of shares issued, the address of the headquarters, the names, ages, and addresses of the company directors, the number of shares subscribed by each director and signatures of all directors. This docment must be signed before the Private Limited Companies Registrar, an attorney or auditor registered with the registrar.
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After completing the registration of the memorandum of association, one of the directors shall issue a notice to all shareholders to set the first statutory meeting. The notice must be sent to all shareholders at least seven days before the meeting. Thereafter, an authorized director must prepare application forms and submit them to the registrar.
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At this stage, deposit of paid-in capital in a bank should take less than one day to compete. Once a company gets approval for the memorandum of association and articles of association, it must hold a statutory meeting at which the shareholders must pay in at least 25% of the registered capital.
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The company will need to obtain a corporate seal, this should take four days to complete and cost 300-500 baht. While a company is not required by law to have a corporate seal except for fixation on company share certificates, in practice a Thai company usually affixes its corporate seal to most other documents.
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The next registration requirement is to apply to register the new company as a legal entity This should take approximately one day to complete and costs a minimum of 5,000 baht, and an additional 200 baht for the official duty stamp on the articles of association. This could run anywhere up to the 250,000 baht maximum fee. The authorized signatory director(s) must sign the application for registration of incorporation of the company before the Private Limited Companies Registrar, an attorney, or an auditor registered with the Registrar. Company director(s) with authorized signatory authority must apply for company registration within three months from the date of the statutory meeting. Normally, the final registration as a legal entity can be completed within a day. If the company is a joint venture and has adopted more complicated articles of association, the Registrar may take more time to review the company's articles of association. Thus, the final registration may be prolonged for one to two weeks or more, depending on the content of the articles of association.
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Revenue Department registration for taxes should take two days, there is no cost for this registration. Within sixty days of incorporation, a company must register with the Revenue Department to obtain a taxpayer identification card. The number appears on the VAT certificate and on the taxpayer identification card, which are usually obtained on the same day of application. The VAT certificate will be mailed separately to the registered company address. Businesses that earn more than 800,000 baht per year must register for VAT within thirty days from the date the income was earned. The company must file VAT returns by the fifteenth day of each month. This requirement must be met even if no income was earned in the proceeding month. VAT registration must be filed in person at the same office as the income tax registration. This procedure normally takes one to three days.
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Registration for social security and Workmen’s Compensation Fund at the Social Security Office should take one day to complete, there is no cost for this registration. Employers that have one or more employees must register their employees in person at the Social Security Office / Ministry of Labor.
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Submitting company work regulations to the Office of Labor Protection and Welfare (Ministry of Labor) in the district where the head office of the company is located, can take up to twenty one days to complete. There is no cost for this requirement. Company work regulations are reviewed by the Office of Labor Protection and Welfare who will advise the company on any required revisions. An employer with ten or more regular employees must establish written rules and regulations (in Thai) on work performance. The regulations must be displayed at the work premises within fifteen days of hiring ten or more employees. This procedure takes two to four weeks.
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American companies doing business in Thailand enjoy special privileges and concessions from the Thai Government from the Treaty of Amity. The Treaty of Amity and Economic Relations between the United States of America and the Kingdom of Thailand - commonly known as the Treaty of Amity, was signed on May 29, 1968. There are two major benefits of the treaty.
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The Treaty of Amity allows American companies to maintain a majority shareholding or to wholly own its company, branch office or representative office located in Thailand, and American companies receive national treatment. That is, they may engage in business on the same basis as Thai companies, and are exempt from most of the restrictions on foreign investment imposed by the Alien Business Law of 1972. Americans can refer to the following document for additional details: http://www.amchamthailand.org/ACCT/asp/ViewBusDoc.asp?BusDocID=20 or contact the American Chamber of Commerce Thailand http://www.amchamthailand.com/.
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About The Author
Alex Smith maintains and manages the Cheap Thailand Travel website at http://www.cheapthaitravel.com - All of the materials on this site are the sole property and responsibility of Cheapthaitravel.com. This material may not be reproduced in any form without express written permission.
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Business Do's and Don'ts in Thailand