Here is the info that I was shared with by a Thai partner.
There are numerous options available to form a company in
Thailand. If you are engaged in the activity of export, exercise a Board of
Investment (BOI) supported activity, are an American citizen, or qualify for a foreign business license, you can fully own the company as a foreigner. In other cases, as per the Foreign Business Act, the company will be restricted in its activities if it is not held by a majority of Thai shareholders.
100% Foreign Ownership options:
- Foreign Business License
A company may make an application for 100% foreign ownership by demonstrating a benefit to the country through technical and knowledge transfer, investment and employment factors. This option has become increasingly easier over the last 6-12 months with Thailand approving a wider range of business applications.
- BOI – Board of Investment Company
A BOI promoted Thailand company can enjoy the benefits of 100% ownership, tax incentives and other government concessions. You must fall into a promoted activity.
- US Treaty of Amity Company Registration
American citizens can exercise 100% foreign ownership of a Thailand company by utilizing the Treaty of Amity agreement.
- Thailand Export Company
A company registered to EXPORT ONLY with 100% of the revenues realized from outside Thailand is eligible for 100% foreign ownership.
- Thailand Manufacturing Company
A company registered to MANUFACTURE FOR EXPORT ONLY with all revenues generated from outside Thailand is eligible for 100% foreign ownership.
- Thailand Hotel Management Company
A company registered as HOTEL MANAGEMENT ONLY is eligible for 100% foreign ownership.
- Representative office, Regional Operating Headquarters & Branch Office
Other corporate registrations for foreign registered companies are possible with each carrying specific restrictions on operations and profit/revenue generations.
Standard 51/49 Thai Company Structure:
In structuring this 51% Thai ownership, we can provide the legal instruments and structuring required to enable
full control of the company from a minority shareholding position:
- By having a preferred shares structure which gives you full voting control and right to full benefits of the company. In practice this means that the Thai shareholder would (only) hold preferred shares with reduced voting rights and only a limited right to dividends.
- By giving you the possibility to replace the shareholder at your discretion, and;
- By drafting a Joint Venture Agreement between yourself and the Thai shareholder, including for example the obligation for the Thai shareholder to offer the shares to you first in case he/she would intent to sell them;
Procedures & Additional Details:
A foreigner working in Thailand needs a work permit, which requires a company to support the application. That company will have to comply with the following basic requirements:
- Have two million Baht in registered capital per work permit. This amount does not need to be shown in cash or in a bank account but can be registered as a shareholders or directors loan
- Be registered for VAT, and;
- Register four Thai staff per work permit into the social fund. (Can be waived first year)
Consequently, the full set up procedure will include the following steps (in chronological order):
- Company set up by reserving the company name and registering the company at the Department of Business Development (DBD);
- VAT registration;
- Business visa application at a Thai Embassy abroad (validity of 90 days);
- Registration of the (minimum four) Thai employees with the Social Security Fund;
- Application for the work permit and business visa valid for one year.
Value Added Tax - VAT
As mentioned above, the VAT registration is required for the company to be able to support your visa and work permit application. The information required from your side concern the
landlord documents (e.g. ID card of the owner, pictures of the building etc.) proving that the company can use the address for the registration purposes. Those documents of course do not need to be supplied if our desk space solution used. Once the company is registered for VAT, it will need to file its monthly VAT returns (even if the turnover is zero).
Social Fund
The labor department at this time requires that you pay the social fund contributions for four Thai nationals. This is 10% of a presumed salary and equates to roughly 900 baht per person. The minimum salary is currently at 9,000 baht per month. You will have to supply Interactive with some basic
information regarding your employees (e.g. copy ID card, salary etc.). Note: a shareholder or director can be an employee, but he/she will not count as an employee for work permit purposes. A director-employee may be invited for an interview by the social fund officer.
VISA AND WORK PERMIT
This process consists of three steps:
- Application for the 90 days business visa abroad once the company is registered at the DBD and for VAT;
- Application for the work permit (in principle valid for one year) once the company is registered for DBD, VAT and Social Fund, and the applicant acquired the 90 days business visa.
- Application for the one year business visa when the applicant has obtained his/her work permit.
Note, for certain nationalities (India, Bangladesh, Nepal, etc.), a pre-approval of the work permit ("WP3") is required. This WP3 will have to be obtained before the applicant applies for the 90 days business visa abroad.
