Here’s a practical guide from Enterprise Singapore and our knowledge partner RSM on the nuts and bolts of setting up shop in Thailand. It covers:
To do business in Thailand, one of the first things to consider is your business structure. Different regulations may apply depending on your business structure and activities.
Foreign companies doing business in Thailand use three main types of business entities:
A private limited company may be wholly owned by foreigners, except those in businesses reserved for Thai nationals under the Foreign Business Act (“FBA”) where foreigners can own up to 49% of the company.
A private limited company is managed by a board of directors, guided by the Civil and Commercial code and its articles of association. The company is controlled by shareholders.
A branch office is the same entity as its head office overseas. To set up your branch office in Thailand, you will normally need the support of a Government Ministry or Agency, or a major organisation engaged in a particular activity.
You can apply to the Foreign Business Committee to set up a branch office. It usually takes three to four months to process the application after you have submitted all the documents needed.
You may also set up a representative office in Thailand to engage in non-revenue generating activities for your company. The office needs to appoint one resident representative who can be of any nationality.
A representative office is restricted to:
You need at least one director. There is no limit to the number of directors.
Yes, if you set up a representative office or branch office.
A director in your company must be at least 20 years old.
Yes, the entire board can consist of foreigners.
It depends on the nature of your business. If the business is a restricted business for foreigners under the Foreign Business Act, you need to get a Foreign Business Licence, or the majority of shares in the company must be owned by a Thai shareholder.
At least three shareholders.
Depending on the nature of your business, you may need permission from the local authorities before starting. Some examples include:
Business activities such as operating a factory, selling insurance, import and export, running a restaurant, operating a hospital, banking, securities, forex trading etc. need prior government approval.
Foreigners cannot do business in these areas:
They include activities such as operating a factory, import and export, running a restaurant, banking, etc.
Apply for licences after setting up your company.
It depends on the type of licence you hold. Most licences can be renewed after they expire.
Yes, you need to display your business licence.
Under Thai law, the minimum is THB 15 (S$0.61). In practice, it should not be lower than THB 100,000 (S$409).
You do not need approval from the local authorities to increase your share capital, only approval from your shareholders.
At least THB 1 million (S$40,900).
The common unit prices are THB 100, THB 10 or THB 1,000.
You can only issue shares in Thai Baht.
Yes, there are regulations from the Bank of Thailand for various types of remittances.
It is not necessary. You can use only one bank account.
It takes one day to open a bank account at local Thai banks. For international banks, this can take up to months.
No, you don’t need to keep a minimum capital amount in your bank account. You can use the capital for day-to-day business operations.
20% of net profit.
Depending on your revenue, you will enjoy a lower tax rate will if you are an SME with capital under THB 5 million (S$204,500).
Yes, the Board of Investment of Thailand promotes foreign investments in the country. Check out their investment promotions.
You need to file half year (PND 51) and annual (PND 50) corporate income tax returns.
Yes, the tax rate is 10% for repatriation of dividends.
They are 1% on interest, 10% on dividends and 3% on royalties.
Yes. The tax rate is 7%.
You must contribute to your employees’ social security fund. Other benefits such as bonuses, provident fund, medical insurance etc. are optional.
Yes, you will deduct withholding tax based on personal income tax rates. Social security contribution is 5% of the employee’s salary but capped at THB 750 (S$30.1) per month.
Yes, your employee needs a work permit. It takes 15 days to obtain a work permit.
You need to have a physical office address.
Please note all information is provided in good faith for guidance and reference purposes only, and is correct as of 17 September 2018.