A Thai limited company is a business entity that separates the personal finances of its owners. It also offers the advantage of multiple work permits and visas for foreign staff.
It requires at least three promoters, who can be either individuals or corporate entities. It should have a minimum registered capital of 5 million Thai baht (not required to be fully paid up). It must have a local address.
A Thai Limited Company is a legal entity with the rights of shareholders and directors regulated by the Civil and Commercial Code, the Revenue Code and the Accounting Act. Its liability is limited to the remaining unpaid amount of the par value of shares held.
Shareholders are able to vote on issues that affect the company. They also have the right to claim back assets from the company in case of dissolution. The company must keep a book of records and follow accounting procedures as laid out in the Civil and Commercial Code, the Revenue Code or the Accounting Act. Documents may be written in any language as long as a Thai translation is attached.
For a company to be incorporated it must have at least two shareholders. This used to be a minimum of three but has now been reduced to two. A share certificate is required to be issued for each shareholder which must be kept in the company’s registered office.
The directors of a company are legally responsible for the management of the business and can take actions to protect the shareholders’ rights. They can sign contracts, make payments, and purchase assets on behalf of the company. They also have the authority to appoint and dismiss employees, as well as to authorize dividends. Directors can also be held personally liable for the company’s debts, but the maximum liability is limited to the amount paid for the shares.
In a Thai limited company, the director’s signature must be accompanied by a corporate stamp. This is available from printing shops and costs less than 500 baht per stamp. The stamp and the director’s signature must be used as an official seal on all company documents, bank transactions, accounting papers etc.
Foreign investors should note that the maximum shareholding for a private company by a foreign investor is 49% (unless a special law and /or treaty is utilised). Furthermore, the directors of a company must be Thai nationals or must have obtained a work permit to act on their behalf.
Shareholders are those people or entities that hold single or multiple shares in a company. Their rights and responsibilities are defined in the memorandum of association or articles of incorporation of a Thai Limited Company, which serve as the constitution for the business entity.
When setting up a Thai Private Limited Company, the authorised capital must be respectable and adequate for its intended business operation. If the business intends to employ foreign staff a minimum registered capital of two million baht is required per foreign employee, if a work permit will be granted, and should be fully paid up prior to hiring a foreigner.
Once the structure of the company and its authorised capital is determined, a statutory meeting is called during which the articles of association are approved, the board of directors are elected, and an auditor appointed. This process can take 1-3 days to complete.
Company registration in Thailand grants the business a legal status, meaning that third parties such as investors or banks can examine its credibility. In addition, it enables the company to file tax returns and other documentation. In this way, shareholders’ rights are protected and third parties can rely on the company as a reliable partner.
A company can open a corporate bank account in Thailand after it has been registered. The bank will require the company documents, including the memorandum of association, statutory meeting minutes and directors’ identification documents.
A private limited company can be owned by foreigners, but the majority of shares must be held by Thai nationals. Foreigners can also own more than 50% of a public limited company, but they must comply with the Foreign Business Act. The company must have a registered address in Thailand. It can be a commercial or residential address. The company must maintain strict financial requirements, and annual statements must be submitted to the ministry of commerce.