Company Formation and Restructurings
Our corporate advisers will assist you in forming your company in compliance with your purposes and business needs ensuring company registration in the Revenue Department and other relevant authorities. We will also help you with restructuring an existing company, that may include any changes in the statutory documents such as objectives of the company addition, capital increase, shareholders an directors substitution, ownership transfer, address change etc.
There are a lot of laws and regulations that foreigners must comply with in setting up a business in Thailand. These include Civil and Commercial Code, Revenue Code, Accounts Act and Foreign Business Act. All of these specify how a foreigner may set up and run a business here in Thailand.
A Business can be set up by foreigners in different forms: partnership business, joint ventures, branches of foreign companies, public limited companies and private limited companies.
A Private limited company is the most popular type of business in Thailand. It has basic characteristics similar to those of European companies. The company is formed with the Capital divided into shares, and the liability of the shareholders is limited to the amount, if any, unpaid on the shares respectively held by them. A minimum of three shareholders is required. Foreigners can be the shareholders and hold a maximum of 49 percent of the company shares.
A company is managed by a director or a board of directors according to the company's by-laws. The liability of the directors may be unlimited if so provided in the company's memorandum of association or the articles of incorporation.
Company Formation Procedures:
1. Corporate Name Reservation
To confirm that the company’s name has not been duplicated or is similar to that of another company it is necessary to reserve the name. The approved corporate name is valid for 30 days. No extension is allowed.
2. File a Memorandum of Association
A Memorandum of Association, which has to be filed to the Commercial Registration Department, must include the name of the company that has been successfully reserved, the province where the company will be located, the objectives of the company, the capital to be registered and information about the shareholders. The capital information must include the number of shares and their value. At the formation step the authorized capital must be issued, though may be paid partly. Although there are no minimum capital requirements, the amount of the capital should be respectable enough and adequate for the intended business operations. The amount of capital is also depends on whether the company will employ the foreigners.
3. Statutory Meeting
When the shares have been subscribed, a Statutory Meeting is called. The agenda of the Meeting includes the adoption of by-laws, the Board of Directors election and an auditor appointment. After the Statutory Meeting is held, the promoters shall hand over the business to the directors. The directors shall control payment of not less than 25 per cent value of each share by subscribers.
The directors may apply for registration of the memorandum of association and registration of the company on the same day. However, if registration does not take place within three months after the Statutory Meeting, the company is considered as not formed.
5. Tax Registration
All companies must apply for a taxpayer identification card within sixty days of formation. This is mandatory even if the company does not begin operations immediately. Most of the companies have to be registered as VAT payers as well.
6. Registration at Social Security Fund
Every company that has employees must be registered at Social Security Fund.
Some business activities and services provision require the licenses. The license requirements and fees depend on the type of the license.