A Limited Company is currently the most sought-after business category in Thailand because of the simple process and protection it offers shareholders. The regulatory body tasked with the registration of Limited Companies is the Ministry of Commerce’s Department of Business Development. The set-up process takes around less than a week.
Registering a private limited company requires at least three shareholders who will act as promoters for the venture. They must be a natural person and will be in charge of signing the registration forms throughout the process. Once the company has been registered with the Department of Business Development, shares can be transferred to Thai or foreign individuals and juristic persons.
Applicants must note that this company structure, Thai nationals or legal entities must hold 51% of the company’s shares or more. If this is not the case, the company is required to apply for a Foreign Business License from the Ministry of Commerce, who will determine the company’s eligibility based on its proposed business activities.
Nonetheless, it is still possible for foreigners to acquire majority voting rights in their company even if they are a minority shareholder depending on whether they hold ordinary or preferred shares.
Shareholders must appoint at least one person to act as a director of the company. This person can be a promoter during the registration process and will be the primary signatory for all legal documents pertaining to the company. Foreign directors are required to obtain a valid visa and work permit in order to legally work in the company.
A Thai limited company confines the liability of shareholders to their investment in the company. This, however, does not apply to directors during their tenure and within two years following their resignation.
The minimum required capital depends on how many foreigners will be involved in the company. Normally, the company must have a registered capital of 2 million Baht per foreigner working in the company to avail for a work permit.
Once the limited company has been formed and is operational, the company must follow accounting procedures that comply with the Civil and Commercial Code, Revenue Code, and the Accounts Act. A balance sheet and a profit & loss statement are to be submitted after each accounting period as well as an external audit. Failure to comply will incur penalties and fines.