The incorporation process does not require the presence of the shareholders or directors in Thailand, as long at the relevant signatures are certified by a Thai Consulate or Embassy officials outside Thailand.
While it is possible to register a company with majority foreign ownership in Thailand, this company will be governed by the rules of the Alien Business Law. Alternatively, in order to avoid the various restrictions imposed on the operations of an alien, or majority foreign owned company in Thailand, a company which is majority Thai owned could still be be established under present legislation. In this structure a non-Thai may own up to 49% of the company while the remaining 51% will be owned by one, or more Thai national individuals.
We can usually have your company set-up and under your full control within 4-6 weeks. However when registering a Thai company for foreign ownership there are a few things to consider to ensure that you can retain control and ownership of your company.
A Thai company must have majority Thai shareholder, however, we can provide nominee shareholder for your company.
To establish a Thai Limited company you will need three promoters, one of these three must be Thai. We can provide Thai nominees for you along with the necessary papers for you to still gain power over your company (e.g. Share Transfer Agreement , Loan Agreement etc.). Our Thai nominee can be one of your promoters and start the company registration process right away.
A Thai Limited Company must have a Thai national holding 51% of the company in term of share holding, which means that foreigners can hold only 49%.
If the Thai limited company has a foreigner holding shares more than 39% or has a foreigner as director, the government will require additional documents, these include, Thai bank statements of all Thai nominee shareholders.
However, we can register your company with a nominee Thai director, in this instance the Thai nominee promoters (shareholders) do not have to provide further documentation to show they have necessary funding to pay for said shares. Upon company formation the nominee Thai director can then be changed to yourself to allow you full control over your Thai limited company. The same can be done to allow you a 49% holding of shares.
To allow you further protection in the instance of a dispute with shareholders you will be afforded ordinary shares which allow you 1 vote per share, while other share holders will be afforded preferred shares which allow them 1 vote per 10 shares. This effectively means despite not owning the share majority of the company, you will still have voting majority and therefore sole control over your company.
Firstly the proposed name is required to be reserved for use as the Company's name with the Ministry of Commerce, in order to ensure that the proposed Company name is not identical or similar to the name of any other registered Company.
Once the Company's name has been approved by the registrar, during the validly period of 30 days, we shall apply for the registration of the Memorandum of Association.
The Memorandum of Association must contain the following information:
There is no minimum capital requirement.
Following the registration of the Memorandum of Association all shares must be subscribed to by shareholders and at least 25 % of the value of each share is required to by law to be paid up.
The promoters shall then hold a general meeting of all subscribers, which is called the Statutory Meeting.
The promoters are required to send to every subscriber a notice of the Statutory Meeting together with a statutory report at least 7 days before prior to the meeting-taking place. The notice of the Statutory Meeting shall contain the agenda of all business to be transacted. Normally the business to be transacted at the Statutory Meeting is as follows:
The completion of the incorporation of a Limited Company takes approximately 3 - 4 weeks.
The proposed company name is required to be reserved with the Ministry of Commerce. It takes one day to obtain the result of the name reservation and is valid for 30 days.
The Ministry of Commerce provides a standard form of objectives of the Company containing 40 clauses.
The shares of the Company must be or par value and the amount of a share may not be less than 5 baht. The shares of the company can be issued only as ordinary or preferred shares. The preferred shares have special rights attached to them as prescribed in the Articles of Association. Normally, to protect the foreign shareholder, two types of share holdings are suggested. The Thai shareholders hold preferred shares with limited privileges (less voting right, limited dividend, or limited right to asset surplus) whilst the foreign shareholders hold ordinary shares with better privileges.
No minimum capital is prescribed, however in order for a company to qualify for the application of a work permit for a foreign national, the minimum capital required by the department issuing work permits would be 2 Million THB for each application.
A Thai Company is a company in which Thai shareholders hold more than half of all issues shares, this is 51%. Foreigners therefore can hold only 49%. A company must have at least 7 shareholders whose names addresses and shareholdings are filed in public records at the Ministry of Commerce. Shareholders can be individuals or corporations of any nationality, and residence. The rights of shareholders are:
There is no requirement for a local Thai director, and there are no restrictions on the number and nationality of the directors. It is therefore allowable to have all directors as foreigners and a director need not be a shareholder.
Authorised Directors shall be appointed from any of the directors of the Company, to sign any document for an on behalf of the Company. There are no restrictions regarding the number and nationality of the authorised directors.
The limited company will need a registered office address in Thailand. Establishing a registered business address must occur before the company can apply for a tax registration number, which is required in order to apply for a work permit or open a bank account.
The Company books and accounts must be kept at the registered office and are to be a true and complete account of the sums received and expended by the Company. The accounts must show the assets and liabilities of the Company and its profit and loss account. The balance sheet and the profit and loss account has to be examined by the Company's auditor and submitted to the general meeting for consideration. Accounts must be audited once a year and filed with the Revenue Department and Commercial Registration.
The Foreign Business Act of 1999 prohibits foreign majority owned companies from pursuing certain activities in Thailand unless they first obtain an Alien Business License. This licence is required for all activities except manufacturing, sourcing Thai products for export, and hotel management services.
Foreign investment in a Thai Company is limited to 49% while Thai nationals must hold the remaining 51 %. This provides for ownership of the majority shares by Thais, however, there are a number of means available to provide minority shareholders with a degree of management control of a company. Thus for example, minority shareholders may be given the sole right to elect a percentage of the Board of Directors, or the right to have more voting rights then the majority shareholders (a foreign shareholder who holds 49% ordinary shares has 1 vote per 1 share whilst a Thai shareholder who hold 51% holds preferred shares and has 1 vote per 10 shares, or by including a stipulation that all shareholders resolutions require a minimum vote of 80% to be passed which ensures that minority approval is required. Thus, it is possible to give minority equity investors a degree of control over the activities of the company.
All provisions regarding the protection of the minority shareholders will be stipulated in the Company's Articles of Association, to be registered with the Ministry of Commerce.