TL;DR: Company setup in Thailand typically requires THB 50,000 in registered capital, but foreign-owned companies hiring foreigners must have THB 2 million per foreign employee (reduced to THB 1 million if married to a Thai). Paid-up capital must be deposited in the company’s account and can then be used for operations, with future adjustments requiring shareholder approval and DBD registration
Setting up a company in Thailand requires an understanding of capital requirements, which vary depending on factors such as company structure, foreign ownership, and work permit needs. For most private limited companies, a minimum of THB 50,000 is often chosen, but foreign-owned businesses seeking work permits face higher requirements of THB 2 million per foreign employee.
Companies planning to hire foreign employees, apply for BOI promotion, or operate under a Foreign Business License (FBL) must also meet specific capital thresholds. Additionally, exceptions exist, such as reduced capital requirements for foreigners married to Thai nationals and potential exemptions for LTR visa holders.
Key Points
- Companies requiring work permits for foreign employees must have THB 2 million in registered capital per foreign employee.
- Foreign ownership is subject to specific capital requirements, with businesses needing at least THB 3 million in registered capital per restricted business activity when obtaining a Foreign Business License.
- Exceptions to standard capital requirements exist, such as reduced capital of THB 1 million for foreign employees married to Thai nationals and potential exemptions for Long-Term Residency (LTR) visa holders.
- Changing registered capital requires an extraordinary shareholders’ meeting, formal approval, documentation preparation, and submission to the Department of Business Development (DBD).
What is the Legal Minimum Capital Requirement for Company Setup in Thailand?
Under Thai law, the minimum value of a share is THB 5, and since starting a business in Thailand requires at least two shareholders, the theoretical minimum registered capital is just THB 10. In practice, however, private limited companies must register sufficient capital to realistically support their business operations.
For a regular Limited company in Thailand, in practice the required minimum capital amount is 50,000 THB (approx. 1,500 USD). However, if the foreign investor wishes to work for the company, they are required to have a work permit.
In order to be able to apply for a work permit, the company must have a registered capital amount of 2,000,000 THB (approx. 60,000 USD) per work permit. This is a mandatory requirement and represents a significant investment for investors.
If your company’s registered capital is less than 2,000,000 THB and you plan to hire a foreign employee in the future, you will need to increase the capital later to meet work permit requirements.
Minimum Capital Investment Requirement for BOI Companies
If a company is successful in their BOI application, the BOI will require the company to satisfy some conditions before being awarded the BOI Certificate. As part of the requirements for the issuance of the BOI promotion certificate, the company must transfer the capital investment in order to obtain the BOI certificate. The amount of required investment is decided by the BOI and is stipulated within the BOI acceptance letter.
In relation to the capital investment for projects with foreign shareholders, the BOI requires that the minimum investment according to the percentage of ownership of the foreigners must come from abroad.
The minimum investment amount is at least 1 million THB (approx 30,000 USD), however, it can be more depending on the BOIs evaluation of your application and business plan. Additionally certain types of promotion have an already established minimum investment amount.
Can Companies use their Capital After it has been Transferred?
It’s important to note that in Thailand, the registered capital for the purpose of supporting a work permit application must be ‘paid-up’ capital, meaning that the declared amount must be deposited into the company’s bank account. Once this money is deposited, it can be used by the business.
How does Foreign Ownership Affect Capital Requirements?
Foreign ownership in a Thai company can significantly impact the minimum capital requirements, especially when hiring foreign employees or obtaining special permits. The key considerations include:
Work Permits
To support a work permit for a foreign employee, a company must have at least THB 2 million in registered capital per foreign employee.
Since THB 2 million is required for each work permit, businesses hiring multiple foreign employees may need a higher capital investment. For example, a company planning to hire four foreign employees without a Thai spouse or an exemption (such as an LTR visa) would need at least THB 8 million in registered capital to support their work permits.
Please note, this capital requirement does not apply to companies that have obtained a BOI promotion.
Foreign Business License (FBL)
Under the Foreign Business Act, approximately 50 business activities are restricted to foreign businesses. If a business wishes to undertake one of these activities, foreign ownership of a limited company is capped at a maximum of 49.99% (unless an FBL or a BOI promotion has been obtained).
If a foreigner owns 50% or more of the shares of a company, it is considered a foreign company. Companies with Thai shareholders who own over 50% of the shares are considered Thai companies and are not subject to the restrictions of the FBA.
A Foreign Business License (FBL) is a licence awarded to foreign companies or investors intending to engage in business activities typically restricted to Thai companies under the Foreign Business Act. The FBL allows foreign businesses to operate legally in Thailand and participate in certain industries or sectors otherwise limited to Thai citizens.
In order to obtain a FBL, the company is required to have a minimum registered capital of THB 3 million per restricted business activity for which they have been awarded an FBL.
Read more:
Foreign Business License in Thailand – Ultimate Guide
Are there Exceptions or Reductions for Registered Capital Requirements?
While Thailand has capital requirements for foreign-owned company in thailand, there are some exceptions and reductions available.
Capital Requirements for Work Permits for Foreigners Married to Thai Nationals
If a foreign employee is married to a Thai national, the registered capital requirement for obtaining a work permit is reduced to 1 million THB per foreign employee instead of the standard 2 million THB.
Read more:
Work Permits for Foreigners Married to Thai Nationals
Long Term Residency Visa
The Long Term Residency visa is designed for wealthy individuals, retirees, highly skilled professionals, and remote workers who wish to stay in Thailand long-term. One key advantage is that companies employing LTR visa holders may be exempt from standard capital and work permit requirements, depending on the visa category and company qualifications.
This is a significant advantage, as holders of the LTR ( holders of the LTR visa for Work From Thailand category) are eligible for a digital work permit, without having to satisfy any of the traditional requirements such as the 2 million THB registered capital and Thai staff ratio.
Please note, that holders of the LTR visa for Work From Thailand category are not eligible for a work permit.
Read more:
Thailand Long-Term Resident (LTR) Visa: A Guide to Tax Benefits and Eligibility
When do Companies Need to Make the Payment for their Capital?
If the registered capital is less than 5 million THB, the Ministry of Commerce typically does not check whether the capital has been fully paid. However, legally, funds matching the registered capital amount should be deposited in the company account.
If the company plans to hire a foreign employee, the capital must be deposited into the company account to support their work permit and visa applications, as this may be checked by Immigration and the Labor Department.
At the end of the financial year, if the capital is declared as paid, it must be reflected in the company’s accounts. In such a situation, your accountant should ensure the funds have been properly recorded and booked in the financial statements.
For companies with a registered capital exceeding 5 million THB, the full capital amount must be deposited within 15 days after incorporation. Additionally, the company must obtain a bank certificate as proof of the deposit and submit it to the Department of Business Development (DBD).
Can a Company Change their Registered Capital Amount?
There are situations where a company may need to adjust its capital, for instance, to raise funds by attracting new investors or to secure additional investment. This change must be approved in a shareholder meeting and formally registered. Another common reason is to increase capital to meet the requirements for new work permit applications for foreign employees.
To increase the company’s capital, an extraordinary shareholders’ meeting must be held to approve the change. This requires a special resolution, meaning at least 75% of the shareholders must vote in favour.
Following the meeting, the company must prepare signed copies of the meeting minutes, complete the necessary registration forms, and submit these documents to the Department of Business Development (DBD) for approval.
Can I Use Loans Instead of Registered Capital?
If your objective is to meet the minimum capital requirement to support a work permit application, the funds must be contributed as registered capital and fully paid in by the shareholders. A loan, even if provided by a shareholder or director, is not considered registered capital and will not meet this requirement under Thai immigration and labor regulations.
However, once the capital has been paid into the company’s bank account and properly recorded, it is possible for the company to lend part of those funds back to a shareholder or director.
By doing this:
- The company retains the status of having fully paid-up capital.
- The loan is recorded in the accounts as a receivable from the shareholder or director.
- The shareholder or director incurs a personal liability to repay the loan to the company.
- If interest is charged, it may be subject to withholding tax.
This helps the company meet the minimum capital requirement, while giving shareholders or directors temporary access to the funds. However, it also creates a legal obligation for whoever borrows the money to repay it to the company.
If you wish to increase the company’s working capital without increasing registered capital, a shareholder loan can be used. Loan repayments are not subject to corporate income tax, and only the interest on the loan is taxable (capped at 15% per year). This can be more tax-efficient than dividend distributions, which are subject to 10% withholding tax.
How can Belaws help?
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FAQ About Company Setup in Thailand
Technically, you could start a Thai company with as little as THB 10 since shares must be worth at least THB 5 each and you need minimum 2 shareholders. However, this isn’t practical! In reality, most private limited companies start with THB 50,000 (about $1,500 USD) as their registered capital.
This is where things get serious – you’ll need THB 2 million (approximately $60,000 USD) in registered capital for each foreign work permit. So if you’re planning to work in your company, that THB 50,000 minimum jumps dramatically to THB 2 million.
Belaws can help you plan your capital structure strategically from the start to avoid costly capital increases later.
You’ll need to increase your registered capital to THB 2 million per foreign employee you want to hire. This requires calling an extraordinary shareholders’ meeting, getting 75% shareholder approval, and filing paperwork with the Department of Business Development.
Great news! BOI-promoted companies are exempt from the standard THB 2 million per work permit rule. However, BOI companies must meet their own minimum investment requirements – typically starting at THB 1 million but often much higher depending on your project.
If you need to operate in restricted business activities (about 50 activities under the Foreign Business Act), you’ll need THB 3 million in registered capital for each restricted business activity you’re licensed for.
Yes! Foreign employees married to Thai nationals only require THB 1 million in company capital for their work permit instead of the standard THB 2 million. That’s a 50% reduction.
LTR visa holders in certain categories (like Work From Thailand) can get digital work permits without the company needing to meet the THB 2 million capital requirement or Thai staff ratios. This is a game-changer for qualifying businesses!
For companies under THB 5 million in registered capital, the Ministry of Commerce typically doesn’t verify the deposit. However, if you’re hiring foreign employees, the funds MUST be deposited as Immigration and Labor Department will check.
For companies over THB 5 million, you must deposit the full amount within 15 days of incorporation and provide a bank certificate to the Department of Business Development.
Belaws ensures your capital deposits are properly managed and documented for compliance.
Absolutely! Once the registered capital is deposited into your company’s bank account, it becomes working capital that you can use for legitimate business purposes. The key requirement is that it must be “paid-up” capital first.
No, loans don’t count as registered capital for work permit purposes – the funds must be actual shareholder contributions. However, there’s a workaround: you can deposit capital first, then have the company lend some of those funds back to shareholders while maintaining compliance.
You’ll need to hold an extraordinary shareholders’ meeting where at least 75% of shareholders vote to approve the increase. Then prepare meeting minutes, complete registration forms, and submit everything to the Department of Business Development for approval.
For pure working capital (not work permit requirements), shareholder loans can be more tax-efficient. Loan repayments aren’t subject to corporate income tax, and interest is only taxable up to 15% annually. Compare this to dividend distributions which face 10% withholding tax.
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