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.