Starting a Business in Thailand
Starting a business in Thailand requires that you look at the different types of partnerships available and the issue of work permits, taxes and licences. Lets look at the basics of starting a business in Thailand.Starting your own business in Thailand can be financially rewarding – but it can also be tedious if you do not know exactly what requirements and procedures are necessary. Before beginning any of those procedures, however, you first need to decide what type of business or business organization you want to begin.
Sole proprietorships are businesses which are owned by a single person who has unlimited liability. Both the business and the proprietor’s personal finances may be subject to forms of legal recourse. Unless foreigners are safe beneath the United States-Thailand Treaty on Amity and Economic Co-operation, they cannot start up a sole proprietorship.
Partnerships are a different story. Thailand recognizes three different kinds of partnerships, wherein the main difference between all three is the degree of liability. Unregistered ordinary partnerships refer to businesses in which all the partners involved are liable for their obligations to the partnership. Registered ordinary partnerships mean that the business is now a legal entity, and thus separate from each partner. Limited partnerships have to be registered; with limited partnerships, an individual partner’s liability is restricted to the amount of capital he or she contributes to the overall partnership. There is also the option for a limited company, of which there are two types, beginning with Private limited companies, which are comparable to Western corporations. In order to have a private limited company, the foreigner involved has to have enough capital to accomplish the objectives of the company. Private limited companies can be completely owned by foreigners and immigrants.
Public limited companies must have at least fifteen promoters involved in the formation and registration of the Memorandum of Association. No less than half of the promoters must be legal residents of Thailand. As mentioned, there are also several procedures required for starting a business in Thailand. They are as follows:
To begin with, you must apply for a company name. This takes about 2 days to complete and it is generally free, although sometimes 20 baht is required to apply at the Registrar.
Secondly, you must get approval from the Department of Business Development of the Ministry of Commerce, for memorandum of association. This takes about 1 day to complete and requires fees of 700 baht and, sometimes, 25,000 baht for government fees, but this fee is not always applicable. Information that has to be submitted for approval includes:
– the company name, in both Thai and the native tongue for the immigrant applying;
– the nature of the business;
– what capital will be registered;
– the number and total value of shares involved;
– the company’s address;
– the names, ages, and addresses of any promoters;
– the number of shares each promoter has;
– the signatures of every promoter.
– The third procedure requires applicants to deposit capital into a Thai bank. It takes about 1 day and costs nothing.
– The fourth procedure involves acquiring a corporate seal. It takes about 4 days t complete and costs between 300-500 baht.
– The fifth procedure involves filing an application to register the company as a legal business. It takes about 1 day to complete and the costs vary from 5,200 baht, at minimum, but government fees can cost a maximum of 250,000 baht. These forms require authorized signatures from the director of the company.
– The sixth procedure involves registering with the Revenue Department for tax services. It takes 2 days to complete and there is no charge.
– The seventh procedure involves registering for social security and worker’s compensation. It takes 1 day to complete and costs nothing.
– Lastly, company work regulations must be submitted to the Office of Labor Protection and Welfare of the Ministry of Labor, wherever the company will be headquartered. It takes about 21 days to complete and there is no charge.
Some of the most common business foreigners open in Thailand include restaurants and exporting companies, as well as computer specialist companies, entertainment companies, and banking companies. The benefits of opening a business in Thailand are many, because in addition to living somewhere filled with beautiful landscapes and polite, respectful, and very amenable people, the economy in Thailand is currently excellent. However the economy is also a negative, because it tends to fluctuate on a dime sometimes. The weather is another negative, because one never knows when a tsunami might completely wreck everything. As well, making sure to extend and renew visas and work permits can be tedious, and because of the difficulties inherent in acquiring property in Thailand, it can sometimes be difficult to find somewhere to live.