Establishing a company in Thailand involves a series of legal steps and compliance with specific regulations. Here’s a concise overview of the process and the key laws involved:
1. Choosing a Company Type
- Private Limited Companies: Most common form for foreign investors. It requires a minimum of three shareholders.
- Public Limited Companies: Suitable for large businesses, can offer shares to the public.
- Partnerships: Registered Ordinary and Limited Partnerships have different liability implications for partners.
2. Name Reservation
- The first step is to reserve a company name with the Department of Business Development (DBD). The name must not be similar to or identical to any existing company.
3. Memorandum of Association (MOA)
- All companies must file an MOA, which includes the company name, province where the company is located, scope of the business, capital to be registered, and the names of the promoters. The MOA must be filed with the DBD.
4. Convene a Statutory Meeting
- After filing the MOA, a statutory meeting is held to appoint directors, auditors, and discuss and approve the company registration and articles of association.
5. Registration
- Within three months of the MOA approval, the company must be registered. This step officially forms the company under Thai law. Registration fees are based on the company’s capital.
6. Tax Registration
- Businesses earning over a certain amount must obtain a tax ID card and number from the Revenue Department within 60 days of incorporation or the start of operations. VAT registration is also required if the annual revenue exceeds a specific threshold.
7. Specific Licenses
- Depending on the nature of the business, additional licenses may be required (e.g., FDA for food businesses, factory license for manufacturing).
8. Foreign Business License
- If foreigners are involved and the business is restricted under the Foreign Business Act, a Foreign Business License must be obtained from the Department of Business Development.
9. Reporting Requirements
- Thai companies are required to keep books and follow accounting procedures specified in the Civil and Commercial Code, the Revenue Code, and the Accounts Act. Annual audits and filings with the DBD and Revenue Department are mandatory.
Key Laws to Consider:
- Civil and Commercial Code: Governs business operations, company management, and commercial rights.
- Foreign Business Act: Controls foreign participation in Thai businesses.
- Revenue Code: Specifies tax obligations for companies operating in Thailand.
Navigating these steps typically requires the assistance of legal and accounting professionals to ensure compliance with Thai laws and smooth operation of business activities in Thailand.