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Thai Business Partnerships

Thai Business Partnerships. Thailand’s robust economy and strategic location in Southeast Asia make it an attractive destination for foreign investment. If you’re considering entering the Thai market, a business partnership can be a strategic way to leverage local knowledge and resources. But before you shake hands, understanding the legalities of Thai business partnerships is crucial for a successful venture.

Types of Partnerships in Thailand

Thai law recognizes two main types of business partnerships:

  • Ordinary Partnership: This is a simpler structure formed by an agreement between two or more parties. Here, all partners share unlimited liability for the partnership’s debts and obligations. While registration is not mandatory, it offers benefits like establishing a separate legal entity.

  • Limited Partnership: This offers more protection for some partners. There are two types: general partners and limited partners. General partners have unlimited liability for the partnership, while limited partners’ liability is capped at their investment amount. Limited partnerships must be registered.

Choosing the Right Structure

The best partnership structure depends on your specific business needs and risk tolerance. Here are some key considerations:

  • Liability: If you prioritize limited liability for yourself, a limited partnership might be ideal. However, limited partners have less control over management decisions.
  • Management: In ordinary partnerships, all partners share management responsibilities. Limited partnerships have designated managing partners, usually general partners.
  • Transparency: Ordinary partnerships are less regulated, while limited partnerships require more documentation and filing with Thai authorities.

Key Considerations for Foreign Partners

Foreigners can participate in both types of partnerships. However, there are some restrictions, particularly for certain business sectors. It’s essential to consult with a Thai legal professional to ensure your partnership complies with the Foreign Business Act.

Benefits of Business Partnerships

Partnering with a Thai national can offer several advantages:

  • Local Expertise: Your partner can navigate cultural nuances, legal frameworks, and business practices in Thailand.
  • Network Access: Local partners often have established relationships with suppliers, distributors, and potential customers.
  • Risk Sharing: The financial and operational risks associated with starting a business are shared among partners.

Challenges to Consider

While partnerships offer benefits, there are also potential challenges:

  • Communication Barriers: Cultural differences and language barriers can create communication difficulties.
  • Conflicting Interests: Aligning the goals and priorities of both partners is crucial for success.
  • Exit Strategies: Having a clear exit strategy outlined in the partnership agreement protects both parties if the partnership dissolves.

Conclusion

Thai business partnerships can be a powerful tool for foreign investors. By understanding the different types of partnerships, their legal implications, and the potential benefits and challenges, you can make informed decisions and pave the way for a successful venture in the Land of Smiles. Remember, seeking expert legal advice is vital to navigating the legalities and maximizing your chances of success.

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Foreign Business License

Foreign Business License. The Land of Smiles, Thailand, beckons foreign investors with its thriving economy, strategic location, and abundant business opportunities. But for those who want to establish a foothold and operate a business, a Foreign Business License (FBL) is a prerequisite. This article sheds light on the intricacies of acquiring an FBL in Thailand.

Who Needs a Foreign Business License?

Not all businesses in Thailand require an FBL. Thai law restricts certain business activities for foreign ownership or majority foreign shareholding. Here’s a breakdown of who needs an FBL:

  • Foreign-owned companies: Businesses with a majority of shares held by foreigners must obtain an FBL if they operate in activities restricted by the Foreign Business Act (FBA).
  • Limited partnerships or registered ordinary partnerships: If the managing partner or manager is a foreigner, an FBL might be necessary depending on the business activity.
  • Thai juristic persons: Businesses registered in Thailand but with at least half of their capital shares held by foreigners may require an FBL, depending on the business type.

Types of Restricted Businesses

The FBA outlines a comprehensive list of businesses reserved for Thai nationals or with limitations on foreign involvement. These include activities in:

  • Land ownership: Foreigners are generally restricted from owning land outright.
  • Media and publishing: Ownership and operation of certain media outlets are limited for foreigners.
  • Retail: Some retail sectors, like convenience stores or large-scale supermarkets, have restrictions.
  • Certain professional services: Fields like accounting, law, and architecture may have limitations on foreign ownership or practice.

Obtaining Your FBL

The process of acquiring an FBL involves several steps:

  1. Verify Business Activity: Ensure your desired business activity falls outside the exempt categories or doesn’t violate foreign ownership restrictions in the FBA.
  2. Gather Documentation: Prepare documents like a business plan, company registration details, proof of financial stability, and supporting documents for the chosen business activity.
  3. Apply to the Department of Business Development: Submit the application package to the relevant office. Approval timelines can vary depending on the complexity of your business and may involve committee reviews.
  4. Pay Fees: Be prepared for government fees associated with application processing and license issuance.

Important Considerations

  • Minimum Capital Requirement: There’s a minimum capital requirement for foreign-owned businesses to obtain an FBL (typically 2 million baht, with higher thresholds for specific business types).
  • Seek Professional Help: Navigating the FBA and application process can be intricate. Consulting with a lawyer specializing in Thai business law is highly recommended.
  • Alternative Options: Depending on your situation, alternative business structures like partnerships with Thai nationals or Board of Investment (BOI) promotions might be explored.

Unlocking Business Potential in Thailand

Obtaining a Foreign Business License in Thailand can pave the way for a successful foreign venture. By understanding the requirements, navigating the legalities, and potentially seeking professional guidance, you can transform your business dreams into reality in the vibrant Thai market.

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Corporate

Company Registration in Thailand

Company Registration in Thailand. Establishing a company in Thailand can be a lucrative endeavor for both local entrepreneurs and foreign investors. With its strategic location, vibrant economy, and business-friendly environment, Thailand offers ample opportunities for growth and expansion. However, navigating the company registration process can be daunting without proper guidance. In this comprehensive guide, we will walk you through the essential steps and requirements for registering a company in Thailand.

Determine Business Structure:

Before proceeding with company registration, it is crucial to decide on the most suitable business structure for your venture. In Thailand, the most common types of business entities are:

  • Sole Proprietorship: A business owned and operated by a single individual.
  • Partnership: A business owned and operated by two or more individuals or entities.
  • Limited Company (Co., Ltd.): A separate legal entity with limited liability, commonly preferred by foreign investors.

Reserve Company Name:

The first step in company registration is to reserve a unique name for your business. The proposed company name must not be identical or similar to any existing registered companies in Thailand. Once approved, the reserved name is valid for 30 days.

Prepare Company Documents:

Next, prepare the necessary documents for company registration, which typically include:

  • Memorandum of Association (MOA): A legal document outlining the company’s objectives, structure, and regulations.
  • Articles of Association (AOA): Details regarding the management and operation of the company.
  • Company Regulations: Additional rules and policies governing the company’s activities.
  • Shareholders’ Agreement: If applicable, an agreement detailing the rights and responsibilities of company shareholders.

Capital Requirements:

Limited companies in Thailand are required to have a minimum registered capital, although the actual amount may vary depending on the type of business activity. The registered capital can be in the form of cash, assets, or a combination thereof.

Submit Application:

Once all required documents are prepared, submit the company registration application to the Department of Business Development (DBD) or the relevant government agency. Along with the application, provide proof of identity for shareholders and directors, as well as any additional supporting documents as required.

Obtain Business License:

Upon approval of the company registration application, obtain the necessary business licenses and permits from the relevant authorities. The specific licenses required will depend on the nature of your business activities.

Tax Registration:

Register for tax identification numbers (TIN) and Value Added Tax (VAT) with the Revenue Department to ensure compliance with Thai tax regulations.

Conclusion:

Company registration in Thailand is a structured process that requires careful planning and adherence to legal requirements. By following the steps outlined in this guide and seeking professional assistance when needed, entrepreneurs can successfully establish their businesses and tap into the myriad opportunities available in the Thai market.

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Corporate

US-Thai Treaty of Amity

The US-Thai Treaty of Amity is an important trade and economic relationship between the United States and Thailand. Its aim is to promote trade, commerce and cultural understanding between the two countries while granting special rights to citizens of both nations who wish to enter the other country’s territory for business purposes or investment.

The Amity Treaty was signed in 1966 and replaced an older treaty based on the 1833 Treaty of Amity and Economic Relations between the United States and the Kingdom of Thailand (AER). It grants American companies special rights, such as the right to maintain a majority shareholding or wholly own their company, branch office or representative office located in Thailand. It also gives U.S. firms national treatment and exemption from most of the restrictions on foreign investment imposed by the Alien Business Law of 1972.

There are a few important things to keep in mind when considering setting up a U.S.-Treaty of Amity company in Thailand:

First, to get protection under the Treaty of Amity, a U.S.-owned company needs to have a minimum registered capital of 2 million Baht or more, regardless of the type of activity it will be doing. This increases to 3 million Baht if a Foreign Business License is required for the activity.

Second, the CS must certify that the company is owned by an American and will be majority American-owned after it is incorporated. This certification will be sent to the Thai Department of Business Development, which will then register the company with the government.

Third, the Amity Treaty requires the owner of the company to be a US citizen. This will require a notarized copy of the owner’s passport or birth certificate.

Fourth, the Treaty of Amity is a bilateral agreement and is only valid until one party terminates it. Both parties can end it by giving a year’s notice to the other.

Fifth, the Amity Treaty does not allow companies to engage in communications or transportation services, domestic trade in indigenous agricultural products, fiduciary or depository functions related to banking, or ownership of land. It also does not permit companies to be involved in a number of other activities that are prohibited by the Foreign Business Act.

Finally, the Amity Treaty allows companies to be dissolved after a certain amount of time passes. This may be a helpful feature if the owner is planning to sell the company, but it can also be an issue if the owner plans to remain in Thailand for an extended period of time.

The Amity Treaty has many benefits for American businesses in Thailand and it is worth considering if you are looking to invest in the country. However, the Amity Treaty is complex to understand and can be difficult to navigate without the help of a professional. Therefore, it is important to work with a lawyer who can ensure that you are compliant with the Amity Treaty’s requirements from the start. If you need help, contact the experts at Plizz to learn more about how we can help your company set up in Thailand and get registered under the Amity Treaty.

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Corporate

Doing business in Pattaya

The number of registrations of new businesses has risen significantly over recent years as an increasing number of overseas investors have been exploring and exploiting business opportunities in Thailand. The country’s economy enjoyed healthy growth until the recent global “downtown”, but Pattaya, along with most of the rest of the world, is presently experiencing a slowing down in the pace of economic activity.

doing-business-in-pattaya

This fact alone should not, however, deter a shrewd investor. It is now an established part of conventional wisdom that business and investment opportunities may be even more attractive in the long run, if the investment is made at a time when the economy is “cooling”. As always in business, whether you are an established business person, or a budding entrepreneur, it is a case of identifying the right opportunity  in Pattaya and then working hard to bring your plans to fruition. We commend you to consider choosing and establishing the right business structure, which most appropriately suits your needs, as being analogous to laying down the foundations of a new house.

This is where we hope that you will appreciate the value of our knowledge and expertise. By working in close association with our in-house Thai lawyers we can not only advise you with regards to setting up your business;will suit still we can also assist you in implementing your plans. You will further benefit from our practical advice concerning the “dos” and “don’ts” of doing business in Pattaya and hence, avoid making costly mistakes by identifying and circumnavigating any foreseeable obstacles  which your business may face in the future.

Doing business in Pattaya remains potentially very profitable and is relatively straightforward if you receive the right advice from the beginning. This is where we come in; we can assist in guiding you in a practical and down to earth manner through the otherwise quiet difficult red tape. Let our expertise give clarity to your vision.

 

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Corporate

Business Registration in Pattaya

New business registrations in Pattaya have significantly increased over  recent years ; a fact which is reflected in the country’s unprecedented economic growth. Thailand’s growing economy and consequential increase in market demand has attracted many overseas investors who have identified an opportunity to optimize a return on their investment such that they can anticipate making greater profits than they would from making a similar investment in their own country.

Business registration in Pattaya Foreign investors are also attracted to doing business in Thailand for reasons such as strong government incentives and support given  to new businesses. The Thai government also has policies specifically designed to promote the liberalization of business and free trade.  Foreign investors  benefit from Thailand’s modernization over recent decades which has resulted in the establishment of a solid economic infrastructure, including transport, banking, power and telecommunications. If you were visiting Bangkok for the first time, with its plethora of high-rise office, apartment buildings and hotels, you would be hard pressed to distinguish it from any other capital city in the world.  What’s more, the transportation systems are very efficient, with many kilometers of elevated expressways [motor/freeways] which efficiently keep the road traffic from log jamming, and the “skytrain” which is  ultra modern and very popular with commuters.

Last, but not least, Thailand is a beautiful country in which to live and work and, indeed, ultimately retire.  It is widely referred to both as “the land of the smiling people” and “the land of the free”.  Business overheads in respect both of the costs of leasing property or buying property and hiring skilled labour are significantly less than in the native countries of most overseas investors. Living in Pattaya and the cost of living like everywhere else depends on your lifestyle. In our view Thailand’s recent political instability has been largely overplayed by the media. Without a doubt, the tourist industry has suffered, but other businesses have been  unaffected. Thailand is, of course, a monarchy and the King and his family are  universally revered by his  devoted subjects.  This fact underpins the present and future political stability of this emerging economy which is strategically located at the hub of S.E. Asia.

Call our law office in Pattaya today to discuss your business needs in Pattaya, be it is business or bar in Naklua, Jomtien or Pattaya City. We are able to assist you at very reasonable rates!

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Starting a business in Pattaya

For some people, establishing his own business is much better and more satisfying than working for somebody else. After all, personally owning a business is having the chance to do things his way and his own time by using his personal methods.

And for starters and veterans alike, Thailand cannot be a bad choice to start a business. Expatriates are very much welcome in the country. Other than that, the economy is on a favorable condition and its government has been continuously revamping its rules and has embarked on initiatives to help facilitate and fast track the establishment of such ventures.

Actually, the availability of guides in establishing, conducting and managing one’s own business in Thailand is enormous. These guides can simply be found everywhere. One can find them at the bookshops, magazines and through the simplest method, searching them through search engines.

But, not every written step found on these guides can simply be done by anyone, especially, to a newbie in doing business in Thailand. Moreover, faithfully following every step do not really guarantee 100% success rate or 100% kink-free processing of the business application though when in Thailand, to minimize the impact of such risks, there are only two things that a beginner in doing business in the Kingdom must remember: never circumvent or violate any Thai laws and do a research.

Doing a research

This does not necessarily imply for an aspiring businessman in Thailand to diligently adhere to the “basics on research methods.” Doing a research simply means, the soon-to-be proprietor in the Kingdom must know everything that he should know with regards to his prospective Thai market.

Yet, when considering Thailand as his business destination, chances are, this business-minded individual already had an idea on what type of venture he will be introducing to the Kingdom.
With research, he will be informed that expatriates are only allowed to engage to a limited number of businesses types as some of them are restricted for Thais only while some may be allowed to foreigners like him.

Other areas of concern that he must consider including to his research are the following but not limited to:

  • Taxation
  • Type of business allowed to expatriates
  • Licensing procedures
  • Incorporating procedures
  • Legal issues
  • Property ownership
  • Required capitalization
  • Labor and related issues

Also, a good research work in Thailand will bring him to the Thailand Board of Investment center, the One Start One Stop Investment Center (OSOS).

Comparing to the guides found on magazines and the internet, the information that the business-venturing individual can obtain at this center will surely be genuine, up to date and precise.

Why is this so?

It is because the OSOS houses every government departments and offices that an enterprising individual needs to approach and inquire.

Here, the aspiring businessman in Thailand can compare the information that he obtained through the magazines, books and the internet or through small talks with established business owners with the information that he will get at the OSOS.

But, aside from obtaining information and if all the necessary documentation are already in place, the businessman can also submit his application at the center too.

Never circumvent or violate any Thai laws

Circumventing or violating the laws in Thailand should never be an option for an aspiring businessman even if doing such will ensure fast facilitation, approval and establishment of his business in the Kingdom.

Like in any other country, he must abide by the laws and policies of Thailand otherwise his application will be rejected or worse, his shop will be closed down and he will find his immigration status in peril if ever he will be granted with the permit and license to operate a business in the Kingdom.

While he can obtain the information on what Thai laws and government policies to follow at OSOS, it will be of his best interest if he will find a topnotch and reputable corporate lawyer or Thai law firm and tap their expert views and opinion on the legal side of conducting business in Thailand.

Not only that, hiring the services of such lawyer or law firm will also help him ensure that his rights as an enterprising expatriate will be protected as guaranteed by law.

 

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Corporate Pattaya

3 Steps to Starting a Business

Business registration in Thailand is a complex procedure thus the promoters of the company do need a sound and expert advice on the matter. This will help minimize expenses as well as reduce the likelihood of problems in the registration process. When problems in the establishment and registration process are addressed earlier, the registration process of the business can be done quickly.

The most usual type of business entity used in the Thailand is the Private Limited Company.

The 5 Business Registration Steps
  • Corporate Name Reservation – this is the primary step in the registration process. A promoter of the company must file for name reservation at the Department of Business Development of the Ministry of Commerce. The promoter must submit at least 1 company name. The reservation can be done online and the result will be provided within 30 minutes.Moreover, your company name must contain the word Limited at the end of it and that it must have a Thai translation for non-English speakers and also because your company will be registered under Thai language.
  • Memorandum of Association – when the reservation of the name has been approved, the company must then submit its Memorandum of Association. The MOA must include the following information: company name, province where it is located, the scope of the business, capitalization to be registered and the names of the promoters.Furthermore, the MOA also contains: a statement detailing the limited liability of the shareholders, amount of share capital and number of shares of each promoter.Aside from the names of the promoters, the MOA must also contain their addresses, work and specimens of their signatures.
  • Statutory Meeting – a statutory meeting is convened after the share structure has been defined in order to determine the following: Adoption of the Articles of Association (By-Laws), Sanctioning of Contracts and Expenses incurred by the promoters in the promotion of the company. It must also contain: fixing the amount of remuneration to be paid to the promoters, if there is any; fixing the number of preferred shares and the extent of preferential rights; fixing the number of ordinary or preferred shares to be allotted and lastly, the appointment of the initial director or directors and auditor or auditors and the determination of their powers. Also, this is the time wherein the promoters will transfer the business to the directors.
  • Registration – the directors of the newly formed company shall submit the application within three months of the date of the statutory meeting in order to fully establish it. The promoters are required to provide the name, license number and remuneration of auditors that the company is planning to recruit. The fee is 50 Baht per 100,000 Baht of registered capital to register MOA. A fee of 500 baht per every million baht of registered capital to register the company itself.With the ongoing investigations on companies using Thai nominees (a non-legal process of circumventing Thai laws), you can expect that the Thai shareholders of your company will be asked to declare the sources of their investment in your company. The Thai government would want to know whether your Thai partners are legitimate shareholders or if they are just being used as dummies to make it appear that your company is complying with the laws.The rule applies if an applicant attempts to register a company with up to 49% foreign ownership or a foreign director or both. But it does not apply to companies registered with majority foreign-ownership.
  • Registering the Tax Documents – companies subject to income tax must obtain a Tax ID card and number at the Revenue Department within 60 days of incorporation.Your company must also be registered for VAT so that you may be allowed to secure work permits for non-Thai employees of your company.