13 steps to incorporating in Thailand in 2023
- Prior to starting the incorporation process, our Client i) settles Healy Consultants’ engagement fees ii) signs our Client Engagement letter and iii) provides us at least 75% of the due diligence documents;
- Because of the complexity of Thailand incorporation requirements, Healy Consultants drafts a detailed engagement project plan. This plan will map out, week by week, each step to engagement completion, optimizing transparency and setting Client expectations;
- Our Client and Healy Consultants agree the optimal corporate structure, including the number and nationality of shareholders and directors. Healy Consultants’ Thailand company incorporation specialists perform a company name check with the Department of Business Development (DBD) and reserves the preferred company name on the Client’s behalf;
- Healy Consultants Group prepares a quality detailed business plan to assist with company registration and upon our Client’s approval, we submit the same to the Thai government to confirm if i) the Client’s documents required to be attested and translated in Thai and ii) a business regulatory license is required.
- Healy Consultants Group receives company name reservation approval from DBD; and proceeds to order the company seal for our Client’s Thailand LLC. This copper stamp\seal must be placed on company registration forms before the Government issues a certificate of incorporation;
- Thereafter, Healy Consultants prepares the M&AA and incorporation forms for Client signature and courier return. Upon receipt of the same, Healy Consultants Group stamps the incorporation forms and timely submits a quality complete incorporation application package to DBD;
- For our Clients with United States citizenship, Healy Consultants prepares and files an application with the US Commercial Service requesting eligibility certification letter for Amity Treaty application, as doing so will ease incorporation procedures in many sectors. Furthermore, we obtain a certification letter from US Embassy. Only then can Healy Consultants submit the application for Amity Treaty approval and Foreign Business Certificate with the Ministry of Commerce, Department of Business Development, and Foreign Business Section;
- DBD issues a certificate of incorporation. Healy Consultants Group publishes our Client’s Thailand certificate of incorporation in the local Gazette for 7 days;
- If the majority of our Clients company’s shares are owned by foreign shareholders, before starting any business operations, our compliance team will assist secure a Foreign Business License with the Thai Ministry of Commerce;
- To enable Healy Consultants apply for VAT registration with the Ministry of Finance Revenue Department, our Client provides us i) building owner documentation ii) photos of building entrance and/or office entrance, showing street address or office number, company name sign iii) street location sketch map (Thai language) iv) proof of building ownership v) personal or corporate identity documents of building owner vi) certification letter from building owner, certifying that company is a registered business tenant under lease. Within four weeks The Ministry of Finance Revenue Department approves VAT registration;
- Healy Consultants’ banking team will then assist our Client to open a corporate account in Thailand. Our Client will deposit i) at least 25% of company’s share capital for a resident LLC ii) US$93,000 if involved in business activities restricted to foreign investment iii) US$62,000 for foreign LLC involved in other business activities. Upon receiving the bank certificate of deposit, Healy Consultants will assist the Client to activate the internet banking facility;
- For companies engaging in import/export activities, Healy Consultants apply for the import/export license and complete a paperless registration with the Thai Customs. Required documents include i) copy of Thai VAT registration certificate ii) Thai corporate bank account statement iii) a copy of company seal registration iv) company board resolution and v) completed KSK application form;
- Following engagement completion, Healy Consultants couriers a company kit folder to our Client’s preferred international address, containing original corporate documents, unopened bank correspondence and a Client feedback survey.
Foreign Business License procedures
Only foreigners owning majority shares in a Thai LLC or engaging in the permitted activities that are regulated under the Foreign Business Act (FBA) are required to apply for a Foreign Business License.
Restricted activities for which a foreign business license is required include
- Professional services relating to accountancy, law, engineering, construction, financial brokerage;
- Wholesale and retail trading business;
- Mining and forestry;
- Media, publicity and advertising businesses;
- Hospitality, food and beverage or tourism related commercial activities.
The complete negative list of activities are included as FBA List 2 and 3 of the permitted activities to foreigners.
Before an application is submitted to the Thai authorities, our Clients should consider in what grade their business meets all three below criteria:
- Benefits and advantages of the proposed business activities;
- Size of the business and the number of local jobs it will create;
- The economic and social impact toward the development of Thailand.
The authorities will also check the business is appropriately funded to finance business setup and operational costs. As a rule of thumb, a minimum paid up capital must be at least 1/12 of the total expected expenses of the business during its three first years of operations. The authorities will also verify the existence of other source of income for the remaining 11/12, for instance the availability of bank loans.
As an example, refer to the BOI’s 7 year Investment Promotion Vision for other such considerations.
Steps to secure a foreign business license
While the procedure to submit an FBL application is simple, the process can span from 2 to 5 months and approval is challenging. Our Clients should expect multiple requests for additional information and supporting documents required by the Thai authorities before receiving an outcome from the Board of Investment.
Generally, we assist our clients with the following:
- Prepare a detailed feasibility study, comprising a 3 year investment plan, financial and operational projections, recruitment plan and technology transfer;
- Complete application form TOR 2 and submit the same together with the business plan to the Commercial Registration Department (CRD);
- Liaise with the different Thai authorities, BOI, CRD and a Foreign Business Committee throughout the application review process on behalf of our Client without their presence in Thailand.
Thailand reporting requirements (post incorporation)
In accordance with Sections 1206 and 1207 of the Thai Civil and Commercial Code, the directors of the company must take careful consideration in maintaining the company’s i) records with accurate minutes of all meetings and ii) accounting books and financial statements in line with the Thai Financial Reporting and Accounting Standards. The reports can be prepared in any language but a Thai translation must also be provided. Refer to the Thailand accounting page for detailed accounting considerations for Thai companies.
Frequently asked questions
I want to incorporate a Thailand company. Are resident directors mandatory?No. A Thailand incorporated company does not need resident directors.
As a foreigner, is it difficult incorporating in Thailand?
Thailand incorporation procedures can be fairly complex for foreigners. Majority foreign owned companies may not be able to invest in certain industries, or will have to obtain a Foreign Business License after a troublesome application process. American citizens may alternatively apply for US-Thailand Amity Treaty, which will allow them to establish a company in an industry that is restricted for other foreigners.
Healy Consultants will guide our Clients at every step.
Should I incorporate a Thailand LLC, branch office or representative office?We recommend out Clients to opt for a Thailand LLC, as setting up a branch office can be more difficult than setting up an LLC. A representative office in Thailand is not allowed to engage in commercial activities, or invoice Clients and customers.
Is there a Thai authority that can guide me on Thailand business incorporation options?The Board of Investments and the Department of Business Development can provide you with more information.