Setting up a company in Thailand can be a complex process, especially when you’re new to this country, the culture, the language, the laws, and the proverbial: “Way things get done”. With Antares, establishing a company is straightforward, simple and cost-effective process.
We do the legwork and take the hassle out of navigating through the legal and procedural maze.
Our experienced legal staff will help you plan your Thai enterprise, and then together we choose the structure that fits your business needs, including shareholder agreements and the articles of association that will govern your company’s internal policies. Once we’ve completed your business, tax and VAT registration, Antares will assist you in organizing the company and starting operations, allowing you to concentrate on the development of your core business right from the start.
In addition to the above packages, Antares provides comprehensive assistance for companies that require integrated marketing support such as: competitor/market reviews, brand strategies, creation and production of logos, business cards, stationery, brochures, print advertising, websites/internet marketing, as well as PR and launch services.
• Limited Company
• Branch Office
• Representative Office
• Regional Office
• Regional Trade & Investment Support Office
• Board of Investment (BOI) Company
• US Amity Treaty Company
• Sole Proprietorships
• Joint Ventures
Antares can assist you with any corporate structure requirements or needs. Contact our legal staff for more information.
There are two types of limited companies:
1. Private Companies
These types of companies are governed by the Civil and Commercial Code.
Under a private company, a Thai person or company will hold no less than 51 percent of the company’s shares (however, the foreign shareholder may maintain the control). This company can engage in all kind of activities. There is no current requirement to have a Thai director, except for some activities for which specific operating licenses are required. This allows the company to be run and maintained by one or more foreign directors holding valid Work Permits.
2. Public Companies
These types of companies are governed by the Public Company Act.
Thai Private Limited Company is the preferred form of a juristic entity for foreign individuals or companies interested in establishing a full juristic presence in Thailand.
The three main steps involved in the company registration process are as follows:
1. Reserve the Company Name- The first step is to reserve the desired company name with the Department of Business Development (DBD) at the Ministry of Commerce. Once approved, this registration is valid for 30 days. Once you gave us three company name suggestions, we will apply in person on your behalf.
2. File a Memorandum of Association- This document must contain the objectives of your company, the approved company name, the authorized capital, the desired location of the company, the extent of liability of the directors, as well as the names, nationalities, addresses, occupations, and ages of at least three promoters. These promoters should be natural persons, and will have to sign the original application form. Each promoter must subscribe to a minimum one share of the company.
3. Submit the Articles of Association- Finally, the Articles of Association have to be submitted defining the specifics of the company, i.e. share structure and distribution, types of shares, voting rights, quorum, directors, dividends, auditors, and any other essential regulations and characteristics of the company. In principle, the filing of these documents completes the registration process and the company’s Certificate of Registration with supporting documents will then be issued.
Contact us today in order for us to review your requirements and give you a free estimation of the duration and cost involved.
A Branch Office is a 100 percent foreign-owned branch of an overseas Head Office. A Branch Office as such (unlike a registered limited company) is not an independent legal entity, and there are no shareholders or directors.
The advantage of this legal form is that there is no requirement to have a local shareholder. The disadvantage is the comparatively high establishment costs and time of incorporation. In addition, it is not an automatic process (unlike the registration of a limited company), but rather an application that will be considered by the committee based on its merits (we have to show that your company will bring a number of benefits to Thailand such as transfer of technology, will no compete with Thai operators).
There is no special requirement for foreign companies to register their branches in order to do business in Thailand. However, most business activities fall within the scope of one or more laws or regulations, which require special registration, either before or after the commencement of activities. Foreign business establishment must, therefore, follow generally acceptable procedures.
As a condition for approval of an Alien Business License to a branch of a foreign corporation, working capital amounting to a total of three million Baht in foreign exchange must be brought into Thailand within certain intervals over a three-year period.
The branch may be allowed to operate for an indefinite period of time, unless a shorter period is indicated in the application as a result of a contract to be performed in Thailand.
It is important to clarify beforehand what constitutes income subject to Thai tax because the Revenue Department may consider revenues directly earned by the foreign head office from sources within Thailand as subject to Thai taxes.
We can also help you establish a Representative Office, a non-trading legal entity. A Representative Office is a 100 percent foreign-owned extension of an overseas Head Office. It is not an independent legal entity, and there are no shareholders or directors.
This entity is not permitted to sell or distribute any goods or services, or in any other way directly generate revenue in Thailand. All operating expenditure in a total of at least 2 million Baht must be remitted entirely from aboard.
In order to operate such a business, a foreigner must obtain a Certification Letter from the Department of Business Development (DBD). The Representative Office do not generate income and therefore is not subject to Thai taxation.
We have successfully incorporated many Representative Offices in Thailand.
In early 1996, the Board of Investment (BOI) announced the establishment of Trade and Investment Support Offices (TISO), becoming a new category of activities eligible for investment promotion. This measure was taken in support of the government’s policy to develop Thailand as a regional center for trade and investment.
Activities found in this realm go beyond regional offices. There is a broad range of activities including:
• Controlling & advising affiliated companies
• All types of consulting services, except those engaged in: buying and selling securities and foreign currency exchange. For accounting, advertising, legal affairs, architecture and civil engineering some exceptions will be made possible via permission of the Department of Commercial Registration or other government agencies.
• Information services related to sourcing and procurement, but not brokerages or agencies
• Engineering and technical services, except those related to architecture and civil engineering
• Testing and certifying standards of products, production and services standards
• Exporting of all types of products
• Wholesaling of all types of products within Thailand, excluding local agricultural products, arts and crafts, antiques, and natural resources
• Provision of training on the use of machinery, engines, tools and equipment
• Installation, maintenance, and repairing of machinery, engines, tools, and equipment
• Calibration of machinery, engines, tools, and equipment
• Computer software design and development
The office of the Board of Investment will consider any other activities that seem appropriate for investment promotion under the Trade and Investment Support Offices on a situational basis.
The types of projects found in this category are eligible for Board of Investment non-tax incentives. The incentives include the following:
• Permission to own land for offices
• Permission to bring in foreigners to conduct investment studies
• Permission to bring in foreign technicians and experts with no limit
• Permission to take or remit foreign currency abroad
• No limitation on the number of shares owned by foreigners
Eligibility for Regional Trade and Investment Support Offices
• To be considered, applicants must either be companies fully established under Thai law or companies who plan to establish under Thai law
• Operating licenses must be acquired from all relevant government agencies
• Operating expenses must amount to no less than 10 million Baht per year. This consists of sales and administrative expenses and is set forth by the Revenue Code.
• The Board of Investment must approve the operating plans
The approval process takes approximately 2 to 4 months.
Under the U.S. Amity Treaty, American citizens are allowed to own the majority or all the shares of a company in Thailand. This company can do nearly anything a Thai business could do, except for the following:
• Own land
• Engage in the business of inland communication
• Engage in the business of inland transportation
• Engage in fiduciary functions
• Engage in banking involving depository functions
• Exploit land or other natural resources
• Engage in domestic trade in indigenous agricultural products
According to the U.S. Amity Treaty, American shareholders (either individuals or entities) shall hold a majority of shares and comprise a majority of shareholders in the new company. American or Thai directors will be allowed to control the management of the company.
After incorporation, the new business should apply for a Certificate of Treaty Protection from the Department of Business Development. This is officially called an Alien Business Certificate. A minimum of 3 million Baht in capital is required for Treaty protection.
The professional fee we charge for drafting, preparation and filing of all documents necessary to obtain the Alien Business Certificate will be made available upon contact.
It takes an estimated 30 days from the date in which we have all required information, documents and required signatures on hand to acquire the certificate application.
One person owns this type of business with unlimited liability. A proprietor’s business and personal assets are subject to attachment and other forms of legal action. Unless a foreigner is covered under the United States-Thailand Treaty on Amity and Economic Cooperation, they are not allowed to operate sole proprietorships.
Any person or company supplying goods or providing services in Thailand with an annual turnover exceeding 1.8 million Baht has to register for VAT in Thailand. Registration has to be undertaken before the registration of the business or within 30 days after the threshold has been reached.
The registration application must be submitted to Area Revenue (Branch) Offices. In case the taxpayer has multiple branches, the registration must be filed at the company’s headquarters.
On a practical note: Thai embassies and consulates do request a copy of a company’s VAT registration when applying for a Non-Immigrant B Visa. Once a company needs to support a foreigner’s Visa and Work Permit, a VAT registration is therefore needed from day one on.
A company is required to file monthly VAT reports from the day of registration, also in case there are zero VAT invoices that month. Companies are required to keep books and follow accounting procedures as specified. Supporting documents may be prepared in any language (once that a Thai translation is attached).
The Labor Protection Acts apply to any business that maintains at least one employee. Domestic workers and other household staff are included in the definition of employee. The Labor Protection Act covers these workers as well. Any employee, whether full or part time, is covered.
According to the law, an employer shall not employ a child under 15 years of age. An worker below 18 years of age must not perform dangerous and hazardous jobs.
If the employer disregard the law, he is subject to fines ranging from 400,000 Baht to 800,000 Baht and imprisonment of up to two years, or both.
If the offense causes the employee a physical or mental harm, or death, the maximum penalty is four years of imprisonment or a fine between 800,000 Baht to 2 million Baht.
The maximum number of work hours for non-hazardous work is eight hours a day or 48 hours a week. In some cases, the employer and employee may arrange the period of hours upon arrangement as long as it still does not exceed 48 hours a week.
Hazardous work is not permitted to exceed seven hours a day or 42 hours s week.
Employees are given no fewer than 13 national holidays per year and a minimum of six days of vacation annually after working consecutively for one year. Female employees are entitled to maternity leave for 90 days including holidays, however, the number of paid leave shall not exceed 45 days.
After working five consecutive hours, all employees are entitled to a daily rest period of at least one hour. It may be arranged that the daily rest period is to be shorter than one hour at each time, but it cannot be less than one hour a day total. A weekly holiday of at least one day per week at intervals of a six-day period have to be arranged by the employer.
Employees may have the option of whether they wish to work overtime or on holidays. For work performed in excess to the maximum number of working hours fixed by law or by agreement, employees are entitled to overtime compensation.
The rates for overtime vary and range from one and a half to three times the normal hourly wage rate for the time worked. The maximum number of overtime allowance is limited to 36 hours a week.
The regulation which stated different minimum wages depending on the workplace’s province has since been given by the Thai Cabinet in 1972.
In Phuket, Chonburi and Rayong a daily rate of 330 Bath applies. In Bangkok and nearby provinces: Nonthaburi, Chachoengsao, Nakhon Pathom, Pathum Thani, Samut Prakan, Samut Sakhon the daily rate of 325 Baht applies. For the rest of 67 provinces daily rates varying from 320 Bath to 308 Bath applies.
The Labor Protection Act covers the conditions for termination of employment.
There is a code that governs and controls unfair practices and dismissals. These unfair practices are usually the result of failure to follow the correct legal functions.
Employee Associations and Labor Unions are required to be registered at the Labor Department and maintain a license for operations. Eventually, a Labor Court will settle employment disputes.
If a contract of employment has no specification to duration, either party is permitted to terminate the contract by simply giving notice at or before any time of payment, to have effect in the next pay period.
Employees who have worked for more than 120 days but less than one year are entitled to 30 days of severance pay. The severance pay is not less than 90 days pay for those employed between one and three years. Employees with three to six years of employment are entitled to six months salary. Those employees with more than six to 10 years of service will receive eight months salary. Employees with more than 10 years of employment will receive 10 months salary.
Employees who retire must also receive a severance pay. The severance pay is not less than six months pay for those employed between three and six years. Employees with six to ten years of employment are entitled to eight months salary. Those employees with more than 10 years of service will receive ten months salary.
The employer who fails to give severance pay to the employee who retire will be subject to a maximum of six-month imprisonment or a maximum fine of 100,000 Bath, or both.
Other than those in transit and citizens of certain countries, all persons are required to obtain a visa in order to enter in Thailand whatever their purpose may be (traveling, working, studying or simple retire in Thailand).
The Immigration Act establishes the following visa categories:
• Transit Visa
• Tourist Visa
• Non-Immigrant Visa
• Diplomatic Visa
• Official Visa
• Courtesy Visa
Furthermore, a foreign must obtain a valid work permit and the correct visa if he wants to work in Thailand. Failure to comply with these strict requirements may lead to severe sanctions such fines, imprisonment or even deportation.