How to Start a Limited Liability Company in Thailand in 2021?

The limited liability company in Thailand is a popular business entity among investors because of one of its key features. It is the liability of members limited up to the amount they have put in the company capital.

In Thailand, a limited liability company is normally founded with a minimum of three shareholders and governed by one director. One of the most significant aspects is that the majority of the board members must be Thai citizens.

We would like to remind you that there are two types of shares in this type of company: simple shares and preferred shares. Simple shareholders have more voting rights within the firm, and one of the two directors is elected by the shareholders. The shareholders can only vote on behalf of their percentage, whereas the directors can vote on behalf of the entire Thai firm.

In case you intend to start a small or medium-sized business in Thailand in 2021, forming a limited company could be a good solution. The key stages for forming an LLC in Thailand are outlined in the list below and discussed further in the rest of the article.

Reserve the Company Name: Investors must confirm if their preferred company name is available and fits the Business Development Office’s standards before reserving it.

Create and submit company documents: The company’s Articles of Association are created and filed with the Registrar, together with a Declaration of Compliance and information about the business’s directors.

Register the company: Once all of the documents are in order, they are formally filed for Commercial Registration with the Ministry of Commerce’s Department of Business Development. However, registration must take place within 30 days of the business’s start date.

Make the necessary registrations: LLCs must also register for tax and VAT purposes, as well as submit the necessary paperwork when recruiting personnel.

Each of these stages can be explained in full by our team, which specialises in business formation in Thailand. Before forming a company in Thailand, investors should be aware that the stages outlined below are not exhaustive, and the company may need to take additional steps depending on the industry. This is why we recommend obtaining a pre-registration consultation to learn more about the limited liability company’s criteria.

One of the most essential requirements for forming a company in Thailand is that foreign investors adhere to the required ownership share of Thai nationals. A Thai national is required to own 51 per cent of the shares in most situations. The nationality of company directors is unrestricted; nevertheless, when foreign company directors are appointed, they must have a work permit. According to the exact business industry in which you desire to start the limited liability company, one of our agents who specialises in Thai company formation may provide you with more information on these prerequisites.

The amount of money injected by a foreign investor varies depending on the industry. For example, in certain industries such as farming, fisheries, forestry, inland trading, trading and selling Thai items, and antiquities, the minimum share capital is higher (in general, the businesses that are considered restricted under the Foreign Business Act). Our agents can provide you with more information on whether a Foreign Business License is required.

The value of company shares in private limited businesses shall not be less than 5 Baht, and at least 25% of the value of the shares must be paid in. 100% of the share value must be paid in for public limited businesses.

Compliance with existing restrictions for joint foreign-national ownership is critical, and one of our agents can assist foreign investors interested in registering a business in Thailand. Entrepreneurs that want to avoid business partner fraud can benefit from an advice appointment with one of our experts. In 2021, some additional quarantine or other procedures may be required for travel to Thailand.

Foreign investors who intend to create a business in the country should contact our company formation experts ahead of time to learn how we can provide you with legal representation and manage part of the incorporation process in your name. You will only need to travel as needed to submit an original signature for the firm formation paperwork and to complete other tasks in person.

Choosing the future business’s name, along with two alternatives, and submitting them to the Thai Ministry of Commerce is a crucial stage in forming a limited liability company in Thailand. Our local advisers advise you to avoid any names that are either identical to or reflect a trademark of another company. The name will be accepted if it is deemed valid and does not contradict any ministerial regulations.

The founders of the company must call a statutory meeting to nominate all of the firm’s directors, representatives, and agents. Furthermore, the company’s founding members will be required to sign the company’s founding paperwork.

The process of forming a limited liability company in Thailand is simple. Following the registration of the name, all shareholders must sign a memorandum containing all pertinent information about the shareholders and the company, such as the business’s purpose and capital statistics. The memorandum will eventually be submitted to the Ministry of Commerce for approval as well.

VAT registration in Thailand, or registration for other specialised business taxes, is one of the final procedures. A summary of the key taxes for limited liability companies may be found lower down in this article.

The procedure of forming a limited liability company in Thailand might take anywhere from 2–4 weeks. Following that, Trademark Registration in Thailand is possible.

In Thailand, taxes are on the basis of residency, which means that resident corporations are taxed on their worldwide profits whereas non-residents are only taxed on income earned in Thailand. If a firm is incorporated in Thailand and registered with the Ministry of Commerce in accordance with local requirements, it is considered a resident.

If you want to start a limited company in Thailand, you should be aware of the taxes that must be paid for this sort of organisation. The value of general taxes in 2021 that also apply to the sort of firm specified in this article is listed below:

• The basic corporate income tax rate is 20%, however certain small and medium-sized businesses may be eligible for a lower rate if they meet specific criteria.
• The real property tax, which is on the basis of the rental value of the property, is 12.5 per cent.
• The value of the social security contributions is 5% both from the employer and the employee. However, there is a ceiling in effect.
• The usual value-added tax rate is 10%, however, it is reduced to 7% until September 30, 2019, and there is no VAT on exports of goods and services.

Other taxes that businesses must pay include withholding taxes on dividends, royalties, and interest, which may be lowered when a double tax treaty is in existence. The transfer tax is levied on both movable and immovable property transfers, as well as banking and other related transactions. One of our company formation specialists in Thailand can also give investors with comprehensive information on limited liability company taxation and assist them in starting a company in Thailand in any field they like.

Before forming a Limited Liability Company (LLC) in Thailand, be aware that this entity is needed to file an annual corporate income tax return at the halfway point of the fiscal year. This return must be filed within two months of the end of the current tax year’s first six months. In terms of the final tax return, it must be filed within 150 days of the company’s financial or tax year’s end. The standard tax year is twelve months long; however, a shorter year is only permitted in the year of incorporation or dissolution. Due to fines for late or incomplete filing, business owners are obligated to adhere to the filing deadlines.

Step 1: Reserve Company Name

When reserving a company name, follow the name reservation requirements supplied by the Ministry of Commerce’s Department of Business Development (DBD).

Step 2: MoA Filing

The name of the company that has been successfully reserved, the province where the company will be located, its business objectives, the capital to be registered, and the names of the promoters must all be included in a Memorandum of Association (MOA) filed with the Ministry of Commerce’s Department of Business Development (DBD). Despite the fact that there are no minimum capital requirements, the amount of capital should be enough and reasonable for the projected business operations.

Step 3: Statutory Meeting

Once the company’s share structure has been determined, the Memorandum of Association and Articles of Association have been authorised, the Board of Directors has been chosen, and an Auditor has been appointed, a statutory meeting is called to make all of the appointments.

Step 4: Company Registration

Within three months of the date of the Statutory Meeting, the Company Directors must file an application to incorporate the company, along with company registration fees.

Step 5: Registration for Taxes

For tax purposes, all businesses in Thailand must be registered. Within 60 days of incorporation or the start of commercial activities, businesses liable for Corporate Income Tax (CIT) must receive a Tax I.D. card and registration number from the Thailand Revenue Department. Business operators who are subject to Value Added Tax (VAT) must apply for a VAT identification number within 30 days of reaching 600,000 THB in sales.

Step 6: Open Company Bank Account

After a company has been officially registered in Thailand, you can open a corporate bank account. To open a company bank account, you’ll need to know which bank and location to go with, as well as what types of accounts the firm requires and who will sign.

In most cases, the registration process takes at least 9 days (mostly because the statutory meeting shall be held at least 7 days before the registration itself takes place). Both the business and the Memorandum must be registered with the registrar at the Ministry of Commerce’s Department of Business Development in compliance with the required documentary forms and criteria.

Thailand is one of the most attractive investment locations in the Asia-Pacific region, owing to its significant potential in a variety of industries and ongoing investment liberalisation policies. The Foreign Business Act regulates foreign entrepreneurs’ ability to enter specific industries, and while some are prohibited (transport, retail, or wholesale), others are encouraged (technology and innovation).

In some circumstances, Thailand’s free trade agreements with other countries might make conditions easier for international businesses. For further information on the Investment Promotion Act and other related laws, we recommend contacting our Thailand business formation agents. Our experts can help you with every step of the company formation procedure in Thailand.

Activity-based and merit-based rewards are two types of investment incentives offered to entrepreneurs who form a limited liability company. The first category is based on the type of activity in which the company is involved, and there are two types of activities: A and B. Knowledge-based and infrastructure development activities are among the A activities, whereas B activities include those that support specific industries. Merit incentives are given out to stimulate investment and spending in specific types of initiatives that benefit the country.

Watch these videos if you’re interested in starting a limited liability company in Thailand.

Opening a business in Thailand, or the Land of Smiles has never been easier, thanks to the country’s outstanding environment and taxation system. There are numerous options for starting your own small business or corporation in Thailand, and our experts in company registration in Thailand can offer you accurate information about the country’s rules and regulations. We’ve selected a few intriguing company ideas for any foreign entrepreneur who wants to stay in Thailand longer than a vacation.

Restaurant or Fast Food Business

If you want to live in Thailand, a restaurant may be a wonderful business idea. Thai people love to dine in groups and spend quality time together, so a restaurant may be a terrific business concept. Most condominiums in the United States lack kitchen appliances, and individuals, particularly middle-income office workers, like eating on the move. Consider a food truck that serves hot and fresh items such as sandwiches, French fries, crepes, hot dogs, or soups. You can also serve European cuisine specialities or delicacies. You should seek support and assistance from our company registration agents in Thailand in order to obtain a business licence and a work permit.

If you want to operate a restaurant in Thailand, you’ll need to register it as a Thai company because foreigners are not allowed to own a majority stake in the country. In addition, forming a limited liability corporation (LLC) may be a viable choice for launching this type of business.

Jewellery Shop or Business

Thailand’s jewellery industry is the country’s second most developed, providing opportunities for many foreigners. These products are in high demand in this area, and starting a jewellery business may appear to be prohibitively expensive. Importing pieces of jewellery and selling them on the local market is a smart way to start with a minimal quantity or budget. You can also contact local manufacturers to exchange ideas and determine what you can enhance and what advantages you may have. Take into account that forming a corporation in Thailand is rather simple, and our representatives can assist you. For incorporating this type of business, a limited liability company would be a smart choice.

Clothing Business

According to experts and statistics, this industry in Thailand is growing at a rapid pace, and people are very interested in learning more about it.

The textile market is booming, and you may easily get into it by renting a boutique where you can display the current trends, whether they’re your own designs or products from other countries.

Farm Business

Agriculture is the world’s oldest occupation and the only one that thrives as a business anywhere. For starters, you can start with a modest farm.

Starting a small business in Thailand with a poultry operation is also a smart idea. You can either sell the products on the local market or contact a number of restaurants or hotels to present your offer. If you wish to start a business in Thailand, you may obtain the help you need with the paperwork.

Digital Industry

People who own businesses in Thailand are aware of the importance of online development, yet many of them are too busy to construct a website.

As a result, if you have talents in this subject and a solid background in website design, you may absolutely start a business in Thailand to construct and design websites for Thai businesspeople. You should look into the domain because it has a lot of potential for profit.

For more information regarding the process of founding a limited liability company in Thailand in 2021, please contact our team of Company Registration Specialists in Thailand.