incorporation
What is the cost of registering a company in Thailand in 2024?
21/10/2021
Company registration services are offered by a variety of service providers, such as law firms (local and international) and accounting firms whose prices can start as low as 10,000 THB and could rise to over 100,000 THB.
Each of these companies will provide their own service and will include and exclude different aspects. It is important to note that the official fees for registering a company in Thailand are THB 7,500. Not all firms include the official fees in their quotes, so please keep this in mind when engaging any services.
The process for registering a company in Thailand is a straightforward process on paper, but in reality many unforeseen difficulties and expenses may arise depending on the initial structuring and your business activities. It is vital that companies looking to register their company in Thailand do their research and make sure their business needs are met and they cover all their bases.
What is a fair price for registering a company?
As is often the case, the safe spot is in the middle, so between THB 40,000 to THB 60,000 (excluding VAT and Government fees).
Firms who charge less may not offer a complete package, or use staff with little experience (you get what you pay for) or worse – their company registration service is simply bait used in order to lure you in to try and sell you other services. Sadly, this isn’t uncommon as these additional services are where such companies can increase their margins (this is often the case with accounting firms).
Firms charging more usually provide a complete package and have experienced staff but the premium is not always justified. This is typically the case with international law firms who do not have to apply efficient processes as they keep their margins high.
With Belaws, our company registration services start from 25,000 THB for 100% foreign or Thai owned companies and 40,000 THB for a mix of Thai and foreign shareholders. There is an extra 20,000 THB for preparing articles of association with a preference share structure. Both packages include a business eligibility study (to ensure that your chosen business structure will fit your needs) and advice on the post registration duties.
We have detailed below the main points that must be taken into account when registering a company. This list will be helpful to you when navigating the different offers that you may receive.
What should a company registration package contain?
As we mentioned above, choosing the right package for your business needs is vital. A company registration package must include the following at the very minimum:
- The preparation of the company registration forms (reservation of the company name, Memorandum of Association, shareholder list etc.).
- The translation of the Company Affidavit and List of Shareholders in English for the foreign shareholders
- The preparation of the certificate of shares for each shareholder (in English and Thai)
- The preparation of the Share Registrar Book which is used to keep a record of the share transfers. Please note that the penalty for not issuing a share certificate and not keeping an updated Share Register Book is up to THB 10,000 and THB 20,000 respectively.
While the above duties are of great importance, they only scratch the surface of the company registration process. When looking to start a company it is essential to perform your due diligence and make sure you have identified the best possible structure for your company. Thailand offers numerous different corporate structures, each having their own strengths and weaknesses. You should always instruct your advisor to check the following:
- Is a Limited Company in Thailand the best structure for your company’s business activities? A Limited Company is the most popular vehicle to do business in Thailand but a Representative Office or Branch Office should also be considered as they both offer unique advantages which may be beneficial. Could you also qualify for a Thailand Board of Investors (BOI) promotion as well?
- Thailand’s regional presence in South East Asia, also unlocks further unique opportunities for businesses. Alternative structuring options in Singapore or Hong Kong could be available as well. These additional regions could bring further benefits to your business which you may not have been aware of.
9 important things to consider before registering a company in Thailand
Can I operate a 100% foreign owned company in Thailand?
It is indeed possible for foreigners to own 100% of a company in Thailand. However, it is important to note that depending on the company’s business activities, a 100% foreign owned company will probably need to obtain a Foreigh Business Licence in order to operate. Your advisor should always check your company’s eligibility for a promotion from the Board of Investment or a Foreign Business License.
Can I keep the control of a company with a local Thai partner?
To ensure the effective control by the foreign minority shareholder over the company, well drafted documents (preference shares structures with articles of association, shareholder agreements with reserved matters, option agreements) must be prepared. It is important to make sure your advisor has a clear understanding of how you want to control your company and can draft the documents properly to ensure you won’t come across any issues at a future date.
What is the minimum capital to register my company?
Under Thai law the value of a share must be no less than THB 5. The minimum number of shareholders must be 3, therefore on paper, the minimum registered capital amount required to incorporate a private limited company is THB15. However, in practice this is not the case, private limited companies usually have a minimum registered capital which is equivalent to the amount sufficient to start their business.
Please also note that if you plan to hire and employ a foreigner, you will need to have 2 Million THB registered capital per employee (if you have 2 foreign employees you would need 4 Million THB etc). If the foreigner you wish to hire is married to a Thai national, the amount of registered capital required is reduced to 1 Million THB. There is an exception for companies promoted by the BOI.
Is my company required to have Articles of Association?
Articles of Association are not mandatory but it is highly recommended to draft some. Articles of Association allow companies to optimise the management structure, such as enforcing limited powers for the directors, preference shares with different voting rights and dividend rights, pre-emption rights and the possibility to do digital meetings.
Are the business objectives of my company broad enough to cover all the business activities that will be undertaken?
When registering a company it is necessary to agree upon and state the business activities undertaken by the company. These activities should then be included in the objectives of the company. Failure to do so may carry the personal liabilities of the director for business activities done outside of the company objectives. Amending the objective at a later stage is possible but it requires an EGM (Extraordinary General Meetings of the shareholders).
Do I need a shareholder agreement?
Shareholder agreements are highly recommended as they further detail the rules of the company. Shareholder agreements are important as they allow companies to anticipate future events that may put the company at risk. For example, Call back and leaver clauses for when a shareholder wants to leave the project, pre-emption rights, drag along and tag along rights for when a shareholder wants to transfer his shares, consequences relating to the death of a shareholder and transfer of the shares to their heirs. Having procedures for events like those above and many more can save a lot of time and hassle in the future as there is already an agreed upon procedure in place.
What office address to use?
When registering a company, it is mandatory to specify the registered address. Virtual offices are generally acceptable in practice when registering the company but if the company needs to be registered with the VAT system or hire foreign employees, a proper office is required (a letter of consent from the owner of the office will be required by the authorities).
Can I close a company easily?
Unlike in jurisdictions such as Singapore or Hong Kong, it is not possible to strike off a company in Thailand. Once a company has been registered and the shareholders decide to close the company, they will be required to hold an EGM and then go through a full liquidation process before the Ministry of Commerce and the Revenue Department. A liquidator must be appointed and the company accounts are required to undergo an audit (even if the company did not make any transactions). The process takes at least 6 months.
The fees for closing a company usually start at THB 35,000 but could become a lot higher if the company did not maintain a proper accounting procedure. Failure to ensure accounting compliance will slow down the process as the Revenue Department will want to ensure that all due taxes have been paid before allowing the company to liquidate.
All these questions should be answered with satisfactory consideration and applicability to your needs. Each company is different and will have their own requirements which must be taken into account. Furthermore, there should also be an option available for drafting the Articles of Association and Shareholder Agreements, should they be required.
Can I start my business activities immediately after registering a company in Thailand?
Once the company registration process has been completed, it is natural for the owners to want to start operating immediately. However, this is not always possible and there are a few very important things that must be considered first.
Are any licenses needed?
Depending on your business activities, one or several licenses may be required, for example, a foreign business licence, an ecommerce license or a factory license. Your advisor should check and see whether your company needs to obtain any licenses before operating. If any licences are required, your advisor should always assist you with obtaining them as well.
The prices for obtaining licenses for your company usually starts from THB 10,000. The timeline for obtaining these licences ranges from one week to several months, depending on the type of license applied for.
Opening a bank account
You must open a bank account in order to release the company’s capital. Your advisor must take a pragmatic approach if their client is abroad. This is the case as a director is required to be a signatory on the bank account. The signatories are required to be present at the bank at the time of opening.
The opening of a bank account is often included in our company registration package. When it is not, the fee varies from THB 5,000 to THB 10,000.
VAT Registration
VAT Registration is a mandatory requirement for a company who has an annual turnover of THB 1,800,000 or more per year. Depending on your business activities and transaction flow, you may wish to register straight away.
It is important to note that some activities are excluded from VAT Payment, for example, farming. Your advisor should be aware of such things and inform you if your company is eligible for any exemptions.
The cost for VAT Registration in Thailand with Belaws’ experts starts from 7,500 THB.
Hiring employees
When hiring new employees, the company must first register with the Social Security Fund (SSF). Once this has been done, the company must then register each new employee within 30 days of their hiring. You will also need an employment agreement. Special attention must be paid to salary packages, allowances & bonuses and non competition clauses as they may have a significant impact in the event of termination of an employee.
The cost for SSF company registration with Belaws’ experts starts from THB 2,500 and the cost for registering a new employee with the SSF is THB 400.
The cost for preparing an employment agreement usually starts from THB 9,000 for a simple draft and can increase to THB 40,000 for an executive position.
Accounting & Tax filings
After registering a company in Thailand, every new company needs to set up an accounting and invoicing system. The bookkeeping should be done monthly as tax filings (VAT, if the company is VAT registered) and Withholding Tax (on service transactions between companies) must be filed and paid monthly.
It is essential that your advisor spends time learning about your business flow in order to get a proper understanding of how best to satisfy your accounting needs. Gaining a proper understanding of a company is so important because some expenses incurred by the company can be capitalised (Intellectual property for instance), amortized (machinery) and tax optimised. Failure to identify if such practices are possible could lead to a company losing out on these perks and enduring unnecessary expenses.
Belaws’ accounting package starts from THB 3,500 and includes a monthly management report and a 1 hour of advisory meeting per month regarding the accounting and tax needs of your company. Our accounting and tax experts ensure our service meets the specific requirements of each client, ensuring your full compliance with the Thai regulatory framework.
Document Drafting
When first beginning their operations, new companies usually require several legal documents to start their businesses. Such documents include NDAs, purchase agreements, terms and conditions, employment contracts, service agreements etc. Again, it is vital that these documents are drafted by expert lawyers with a good understanding of your business in order to protect the company’s interests. Poorly drafted documents could result in disputes arising at a later date.
The cost of drafting a contract or legal document is usually between THB 8,000 to THB 40,000 depending on the complexity of the contract/document and the number of revisions needed. Belaws expert lawyers offer fixed prices in advance for drafting and revising contracts.
Conclusion
Company registration may seem like a straightforward process that shouldn’t cost a lot, but in reality, there are many areas which must be addressed and considered.When undertaking this process, it is essential that your advisor carefully considers your needs and what the company plans to do to ensure the smoothest registration process. Failure to do so could result in costly restructuring later on.
Please note that this article is for information purposes only and does not constitute legal advice.
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Frequently asked questions about registering a company in Thailand
Can a foreigner open a company in Thailand?
Yes it is possible for a foreigner to open a company in Thailand. There are also options available which allow 100% foreign owned companies as well.
How much does it cost to set up a company in Thailand?
The official fees for registering a company in Thailand are THB 7,500.
How do I start a limited company in Thailand?
- Step 1: Choose and register a company name.
- Step 2: Draft and file the Memorandum of Association.
- Step 3: Call and hold a Statutory Meeting of the shareholders
- Step 4: Register the Company with the Ministry of Commerce.
- Step 5: Register the company for Value-Added Tax (VAT) and Income Tax
Is it good to start a business in Thailand?
Thailand is an attractive option for those wishing to start a business. Thailand has a great infrastructure in place and scheme such as the BOI provide great incentives for companies to take advantage of.
How much money do you need to start a business in Thailand?
Typically, it costs between THB 40,000 to THB 60,000 (excluding VAT and Government fees) to start a business in Thailand.The official fees for registering a company in Thailand are THB 7,500.
How can a foreigner start a small business in Thailand?
Yes, foreigners can start a business in Thailand. However, certain business activities are restricted by the Foreign Business Act and in order for businesses to undertake them they must obtain a Foreign Business Licence/Certificate which can be time consuming and complicated.
What is the biggest problem in Thailand?
The biggest problem facing foreign owned companies is being able to undertake their desired business activity as a 100% foreign owned company. Many business activities are protected by the Foreign Business Act and in order for a company to operate in these protected industries, they will be required to be majority owned by Thai Shareholders (unless a BOI promotion has been obtained).
Why is it hard to do business in Thailand?
The Foreign Business Act limits to the business activities a 100% foreign owned company can undertake. This means Thai Shareholders will need to be sought or a BOI promotion obtained in order for a company to legally operate.
Can I own a company in Thailand?
Yes, foreigners can start a business in Thailand. However, certain business activities are restricted by the Foreign Business Act and in order for businesses to undertake them they must obtain a Foreign Business Licence/Certificate which can be time consuming and complicated.
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