Doing business in Thailand
- How quickly can I set up a business?
- What is the minimum investment needed?
- How can I raise finance?
- What are the legal requirements for setting up my business?
- What structure should I consider?
- What advice can you give me in regards to payroll and taxation requirements?
- Is there anything else that I should know?
How quickly can I set up a business?
In Thailand, there are 3 types of business organization recognised: Partnerships, Limited companies and other forms of corporate presence.
The time required for incorporation shall be varied depending on the desired business.
If you register partnerships, it shall be easier than the other form structures.
The most popular choice among foreign investors are limited companies, which comprised; private limited companies and public limited companies.
In general, it takes approximately a week to register private limited companies, while up to one month for public limited companies.
What is the minimum investment needed?
If you require a permit to legally work in Thailand, the minimum amount required is Baht 2 million, which allows company to have one work permit.
How can I raise finance?
Thai Banks are reluctant to lend money to start-up companies and small international entities.
There should be other channels to seek funds for their businesses.
What are the legal requirements for setting up my business?
To start business in Thailand, there are 3 important steps.
Step 1: Reserving a company name. Certain names are not allowed. It is recommended you research details more from the name reservation guidelines of the Department of Business Development, Ministry of Commerce.
The approved corporate name is valid for 30 days.
Step 2: Preparing of necessary documents. This depends on the type of business, which may include the Memorandum of Association, application form and shareholder’s list, minutes of meetings, signed director forms, Declaration of Business Operation form, the details of office and branches and etc.
Step 3: Registering the company with The Department of Business Development, Ministry of Commerce. This shall be done at the office of the Business Registration in the area in which business is located.
What structure should I consider?
Unless business is under the promotion of Board of investment (BOI), foreign shareholders shall be limited at 49% while 51% goes to Thai nationality.
This minority percentage may also be exempted if business receives a Foreign Business Licence.
It’s important to comprehensively understand Thailand’s Foreign Business Act 1999 which states activities that foreign entities are prohibited from conducting.
In addition, it is required to learn more about the BOI scheme especially tax incentives which includes (depending on activities and certain conditions), exemption of Corporate Income Tax for up to 13 years, a 50 percent reduction in Corporate Income Tax for 5 years, and exemption of import duties on raw material or essential material used in research and and development purposes.
Meanwhile, non-tax incentives from the BOI include 100% foreign ownership (except certain activities and industries), the permit to own land and the permit to bring in skilled workers and experts to work in Thailand.
In addition, you will need to process tax registration and obtain license applicable to your business line.
Business liable for Corporate Income tax must obtain tax I.D. card from the Revenue Department.
If business’ gross income in the same fiscal year has reached Baht 1.8 million, the business is generally required to be in Value Added Tax (VAT) system.
What advice can you give me in regards to payroll and taxation requirements?
Location: The important locations are Bangkok (the nation’s capital in the central region), Eastern Seaboard zone, Export incentive zone, Industrial estate zone.
Payroll: Minimum wage of Baht 300 per day. Salary of Baht 15,000 per month for fresh graduate to over Baht 200,000 for Management level.
HR requirement: Business has to follow Labour law, Social Security law, Workman’s Compensation law, Work permit for foreigner.
Tax on business: It comprised; Corporate Income Tax, Withholding Tax, Value Added Tax (VAT), Special Business Tax (SBT), Double Taxation agreement (DTA), and Property tax.
Is there anything else that I should know?
To drive business in Thailand, the Thai Government Agencies we need to know comprised:
– The Department of Business Development, Ministry of Commerce, has all information on various business types and how to incorporate business in Thailand.
– The Revenue Department, will respond to all tax inquiries of business in Thailand.
– The Thailand Board of Investment (BOI), has incentive information, condition and procedures for applying those incentive schemes for certain business in Thailand.
– The Immigration Bureau, has provision services in cross-border travelling and services to foreigners while residing in Thailand.
– The National Innovation Agency (NIA), has solutions and innovations to drive product and business in Thailand.
– The Immigration Department shall issue and renew VISA period according to the period approved by BOI.
– The Labour Department shall issue and renew Work Permit period according to the period approved by BOI.
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