[1] Requirement / qualification of shareholders
Three or more shareholders are needed. For the service industry, restrictions on foreign investment necessitate that shareholders of Thai nationality (corporations included) equal at least 51%.
Advance
We support your business from entry to withdrawal with consistent service.
3 possible types of corporations in Thailand
We provide legal services which needed for Japanese entities to start business in Thailand.
1. Incorporation of a limited company
This is the establishment of a limited company under Thai civil-commercial law. If the majority of capital is held locally, there are no set limits for operations. For this reason, many businesses choose this option.
[2] Determination of paid-in capital
In cases where Japanese employees are to be relocated to Thailand, a visa or work permit is necessary, requiring two million Baht per individual as paid-in capital.
[3] Appointment of board members and designation of representation rights
Appointment of board members and designation of representation rights are required. It is important for multiple board members to possess the representation right to diversify risk.
[4] Joint venture agreements
In cases where 51% or more of the shareholders are of Thai nationality, it is necessary to agree on rights of shareholders, operations of the company, distribution of profits, buy-back share conditions, process of liquidation, and other related matters in a joint venture agreement.
[5] Articles of Association
Agreements on the joint venture should be reflected in the articles of association. It is also possible to specify provisions on dividends and limitations on voting rights.
2. Establishment of a representative office
The representative office is a business form used primarily to gather information locally, and is not able to conduct corporate business. It is used as a preliminary step to overseas expansion.
Restrictions on a representative office
- The representative office may only undertake activities that do not result in generation of revenue in Thailand.
- The representative office may not conduct selling, purchasing, or business negotiations in Thailand.
- Any and all expenses for the representative office's activities in Thailand must be borne by its head office.
Requirements for a representative office
- The representative office must have readied operating capital of at least three million Baht.
- The head of the representative office must take up residence in Thailand (regardless of Thai or Japanese nationality).
- The representative office's financial status must be reported to the board of trade annually.
3. Establishment of Board of Investment (BOI) business (A company approved by the Thai Board of Investment)
In accordance with the Investment Promotion Act, companies are entitled to certain recognized benefits. Though accepted business activities are limited, operation under 100% foreign investment, preferential tax treatment, and other benefits are allowed.
[1] Benefits
(a combination of the following, dependent on the business type)
- Corporate income tax exemption
- Import tax exemption
- Preferential status for foreign work permits
- Land ownership permission
[2] General requirements to qualify for application of benefit from the BOI
- Business must be above a certain size
- Site location must meet requirements
- Type of business must match incentive targets
[3] Procedures for the establishment of BOI business
- Submission of an incentive application form
- Interview by review officer
- Application examination by appointed commission
- Approval notification
- Issuance of incentive certificate
- Project preparation procedures Land purchase and registration, factory construction, import of machinery and other matters
- Submission of business report to the BOI, etc.