Establishing a Thai Limited Company is one of the most popular and practical ways for both local and foreign investors to conduct business in Thailand. The Thai limited company structure offers flexibility, limited liability protection, and a clear regulatory framework under the Civil and Commercial Code (CCC). However, before a company can begin operating, it must go through a defined series of registration steps with the Department of Business Development (DBD) under the Ministry of Commerce.
Understanding these initial steps is essential for ensuring compliance with Thai law, avoiding unnecessary delays, and laying a strong foundation for business success. This article outlines the key first steps in the registration process for a Thai limited company, including preliminary planning, document preparation, legal requirements, and procedural guidance.
1. Preliminary Planning and Name Reservation
The first formal step in registering a Thai limited company is reserving the company name.
The proposed company name must be:
- Unique and not identical or similar to existing registered companies.
- Free of restricted or prohibited words (for example, “Royal,” “National,” or words implying association with government bodies).
- In compliance with DBD naming regulations.
Applicants can submit up to three preferred names in order of preference to the DBD’s online name reservation system. Once approved, the name reservation is valid for 30 days, during which time the company must proceed with the next steps of registration.
2. Preparing the Memorandum of Association (MOA)
Once the company name is reserved, the next step is to prepare and file a Memorandum of Association (MOA) with the DBD.
The MOA is a key document that outlines the company’s basic information, including:
- The reserved company name.
- The registered office address in Thailand.
- The business objectives of the company.
- The total registered capital and the number of shares.
- The names, addresses, and signatures of the promoters (the founding shareholders).
A minimum of three promoters is required to form a limited company. These promoters may be either Thai or foreign nationals. However, if the business falls under the Foreign Business Act B.E. 2542 (1999), the company may need to comply with foreign ownership restrictions or apply for a Foreign Business License (FBL).
Each promoter must subscribe to at least one share upon registration.
3. Capital Requirements and Share Structure
Under Thai law, there is no minimum registered capital for a limited company unless specific conditions apply (such as applying for work permits for foreign employees or engaging in certain regulated sectors).
However, the DBD generally requires that the capital be realistic and sufficient to support the intended business operations. For companies with foreign shareholders seeking work permits, a minimum of 2 million Thai Baht per work permit is typically recommended.
The company’s capital is divided into shares with a par value of at least 5 Thai Baht each, and at least 25% of the registered capital must be paid up at the time of registration.
4. Convening a Statutory Meeting
After the Memorandum of Association is filed, the promoters must call a statutory meeting. This meeting serves as the company’s first official gathering to finalize its formation.
During the statutory meeting, the following key matters are addressed:
- Adoption of the Articles of Association (company by-laws).
- Ratification of any expenses incurred by the promoters.
- Fixing the number of directors and their powers.
- Appointment of the company’s Board of Directors and an auditor.
- Determination of the number of shares to be allotted to each shareholder.
Once these resolutions are passed, the promoters formally hand over the company to the appointed directors.
5. Company Registration with the DBD
Following the statutory meeting, the directors must submit the application for company registration to the Department of Business Development.
The following documents are typically required:
- Memorandum of Association (MOA)
- Articles of Association (if any)
- Statutory Meeting Minutes
- List of Shareholders (Form BOJ 5)
- Director’s consent and details
- Identification documents of shareholders and directors
- Proof of registered office address (such as a lease agreement)
- Evidence of capital payment (bank slip or acknowledgement)
The registration fee is 5,500 THB for every 1 million THB of registered capital, capped at 275,000 THB. The registration process can typically be completed within 3–5 business days once all documents are in order.
6. Obtaining a Company Tax ID and VAT Registration
After the company registration is approved, the next step is to register with the Revenue Department for a Tax Identification Number (TIN).
- All companies must apply for a Tax ID within 60 days of incorporation or within 60 days of commencing operations, whichever comes first.
- Companies with annual revenue exceeding 1.8 million THB are required to register for VAT (Value Added Tax).
Even if a company is not VAT-registered, it must still file monthly withholding tax returns and maintain accurate accounting records.
7. Opening a Corporate Bank Account
Once the company receives its official documents and Tax ID, it can open a corporate bank account in Thailand.
Most banks require the following:
- Company Affidavit issued by the DBD.
- List of shareholders and directors.
- Company seal (if used).
- Identification of authorized signatories.
- Board resolution approving the account opening.
The account will be used for company transactions, capital injection, and future business operations.
8. Work Permits and Business Licenses (If Applicable)
If the company employs foreign directors or staff, it must secure:
- Non-Immigrant “B” Visas for foreign personnel.
- Work Permits from the Ministry of Labour.
Additionally, depending on the nature of the business, specific licenses or permits may be required—for example:
- Food or beverage licenses.
- Factory operation licenses.
- Tourism or service licenses.
Foreign-owned companies must also ensure compliance with the Foreign Business Act, which may limit foreign ownership in certain sectors or require a Foreign Business License.
9. Accounting, Audit, and Compliance Requirements
After registration, a Thai limited company must adhere to ongoing legal and tax compliance obligations, including:
- Maintaining accurate accounting records.
- Filing annual financial statements audited by a licensed auditor.
- Submitting annual returns to the DBD within five months after the fiscal year-end.
- Paying corporate income tax (currently 20%) on net profits.
Failure to meet these obligations can result in penalties or suspension of the company’s registration.
Conclusion
Establishing a Thai Limited Company is a strategic and rewarding way to enter one of Southeast Asia’s most dynamic markets. While the process involves several administrative steps, understanding the initial requirements—from name reservation to tax registration—ensures a smooth and compliant setup.
The limited company structure provides a balance between flexibility and legal protection, making it ideal for both Thai nationals and foreign investors. With proper planning, professional guidance, and adherence to Thai corporate laws, your business can establish a firm legal presence and enjoy long-term success in Thailand’s growing economy.