Latest update on Company structure and registration.

Created : 22 Aug 2023

Updated : 23 Aug 2023

How To Set Up A Thai Limited Company

As many people nowadays are turning to start their own businesses, these ventures could range from small family enterprises to companies that expand and grow over time. Once you've decided to establish your own company, "company registration" becomes a crucial step that cannot be avoided. Here's a simple guide to the process:

Company registration can be classified into two main types based on the individuals who will collectively establish the company:

1.Partnership Registration or Sole Proprietorship (บุคคลธรรมดา): This type of registration is suitable for small businesses and is owned by one or more individuals who are personally liable for the company's debts and obligations. In a partnership, two or more individuals can come together to operate the business jointly and share its profits and liabilities.

2.Juristic Person Registration (นิติบุคคล): This category refers to companies that have a separate legal identity from their owners. Such companies can own assets, engage in contracts, and be held accountable for their own debts and obligations. This category includes various forms such as private limited companies, public limited companies, and limited partnerships.

For those wondering whether it's possible to register a company with only two individuals, the answer is yes. Generally, registering a partnership can be done with just two people. Furthermore, as of February 7, 2023, the laws have been amended to allow the registration of limited companies with two or more founders. This change was announced by the Department of Business Development.

The process of registering a company typically involves the following steps:

The process of company registration is crucial, particularly as your business expands, especially when your earnings surpass 750,000 Baht. For individuals earning this amount, the tax rate can reach up to 35%, whereas through company registration, the maximum income tax rate is capped at 20% only. This highlights the tax-saving benefits and enhanced business credibility that company registration offers. Contrary to common beliefs, the process of company registration is not as complex as perceived. It requires adequate preparation of documents and adherence to the subsequent steps outlined in the company registration process below.

1.Study Company Registration Information

Before deciding to register a company, it's important to study and understand the necessary information. Learn about the different types of company registration and determine which type aligns best with your business activities. This preparation is crucial to ensure readiness in terms of documentation, company name selection, and other aspects. Company registration can be completed in as little as one day.

2.Prepare Documents for Company Registration

A crucial step in the company registration process is preparing the necessary documents for submission. Other documents related to the company need to be endorsed with a certified signature from any one of the shareholders. As for the identification cards of each shareholder, they can personally sign these documents. The documents must be ready prior to going for a one-day company registration at the Department of Business Development.

Regarding company registration for companies with foreign shareholders, there are two main scenarios to understand:

Foreign Shareholding Not Exceeding 49%: This refers to cases where the foreign shareholder is of a nationality other than Thai and holds shares in the company not exceeding 49% of the total shareholding. In this case, the company is considered a Thai juristic person.

Foreign Shareholding of 50% or More: This pertains to instances where the foreign shareholder is of a nationality other than Thai and holds shares in the company equal to or exceeding 50% of the total shareholding. In this case, the company is considered a foreign juristic person. Subsequently, certain conditions apply:

• The business must obtain a Foreign Business License.

• The company is prohibited from owning land.

• There are limitations on conducting business activities according to the Foreign Business Act.

3.Company name reservation

For choosing an appropriate company name to prevent future issues, it's important to avoid using misleading terms. Do not incorporate the name of the current monarch or members of the royal family, and refrain from using country names, ministry names, department names, or any names associated with government entities.

The process of checking and reserving a company name involves two steps:

Free Membership Application: Apply for free membership with the Department of Business Development.
Access Name Reservation/Examination of Juristic Person Application: Navigate to the "Name Reservation/Examination of Juristic Person Application" section.

You can reserve up to 3 company names. The chosen names must not be duplicates or closely resemble names of existing companies.

4.Registering the Memorandum of Association and Submitting to the Registrar

The process of registering the Memorandum of Association involves submitting a document expressing the intention to establish a company to be further submitted to the registrar. This submission must be made within 30 days after the registrar's signature is affixed to the document.

5.Arranging Share Subscription and Scheduling Shareholders' Meeting

Shareholders need not necessarily be the founders of the company. Each person must hold at least 1 share or more. Once the company's shares are fully subscribed and sold, a letter must be issued to schedule a shareholders' meeting. The meeting should be scheduled at least 7 days after the issuance of the letter.

6.Convene a statutory meeting

‍A statutory meeting is convened to make all the appointments once the share structure for the company has been defined, the Memorandum of Association and the Articles of Association are approved, the Board of Directors is elected and an Auditor is appointed.

7.Establishing the Company Committee

The subsequent step is to convene a meeting to establish the company committee. This process is carried out to ensure that individuals are designated to collect 25% of the actual share price as share payment, representing the founders of the company. This step is essential for proceeding with the company registration application. The registration application must be filed within 3 months from the date of the committee establishment meeting. Failure to do so within the specified timeframe would require the organization of a new meeting.

8.Payment of Registration Fees for Company Registration

- Certification fee for each document: 40 Baht

- Certification fee for certified copies of the registration application: 50 Baht

- Fee for issuing a certificate of registration: 100 Baht

- Stamp duty fee: 200 Baht

- Company affidavit registration fee: Calculated based on the registered capital, starting from 500 Baht with a minimum payment of 500 Baht and a maximum payment of 25,000 Baht.

- Limited company registration fee based on registered capital: 500 Baht per 100,000 Baht of registered capital, with a minimum payment of 5,000 Baht and a maximum payment of 250,000 Baht.

9. Receiving the Certificate and Registration Confirmation

Arriving at the final step of company registration is the process of receiving the certificate and registration confirmation. These documents are legally significant for conducting your business. When you reach this stage, it indicates that your company has been formally established and the registration process is completed. You can request these documents from the Registrar at the Department of Business Development in the area where your company is located or from the Commercial Affairs Office in your province.

Today, our page is presenting information about Thai Company set up, hoping that it will be beneficial for all of you who come here to read. Additionally, The Property Center page also has many other great articles that you can read. If any of you are looking to find a house or other real estate, you can entrust your property to us for sale. We have clients contacting us every day, and we will professionally handle the work on your behalf. The Property Center warmly welcomes all homeowners. We have a team that posts on various online media platforms and creates advertisements in newspapers and marketplaces. These services are free, and we only charge a commission fee of 3-5%. Please contact us promptly.

Thanks for the information

http://kasikornbank.com/th/kbiz/article/pages/company-registration.aspx
https://wonderfulpackage.com/article/v/1631/

Related articles (3)

MAY

Land Titles

Title deed, chanote, nor sor sam gor, nor sor sam, land ownership There are a number of different land classifications in Thailand pertaining to titles of land. The most common denominations are: “Chanote” or “Nor Sor See” = Freehold Title Deed

MAY

House Construction Laws In Thailand

House Construction Laws In Thailand Construction in Thailand is mainly regulated by the Building Control Act and the Town and City Planning Act. The Building Control Act provides for governmental control of virtually all types of construction by means of various applications and punishment in case of violation, the Town and City Planning Act deals with the permissible uses of land in different zones. In addition there are under both Acts Ministerial Regulations specifying regulations and zone restrictions. Building and construction can also be restricted by environmental and other laws (Nature Reserve Act, Forest Act, etc.) or if the land is burdened with a right of servitude. The relation between a customer/ employer and a builder in Thailand is primarily governed by a construction contract and the Civil and Commercial Code (specifically the chapter ‘hire of work’). In addition to the zone regulations (12) for Samui specifying the type of use to which land/ property may be put in specific areas issued under the City Planning Act there are general building zone regulations (4) issued under the Building Control Act, giving standard building requirements and restrictions depending on its distance from the beach. These restrictions relate to the maximum size, distance to the land border, design and the height of the building (sample). Similar building regulations exist in Phuket, Pattaya, Koh Phangan, Hua Hin, etc.. Building or buying a home in Thailand Foreign land ownership restrictions in Thailand relates to land only, not to the building on the land or condominium registered under the Condominium Act. The land and any structure on the land can be owned independently by different persons. Foreigners buying a home in Thailand can lease land (and optional obtain a right of superficies) and own the house as a personal property. In any land leasehold structure it is recommended to obtain ownership over the house, but ownership over the land remains the higher absolute right and the right to own the house on the land is relative to the right to use the land. The right to own the house on another man’s land always follows the term of the land lease or superficies agreement and cannot exceed a term of 30 years after which the lease and/or superficies must be renewed. How to own a house distinct from the land it is on Buildings (apart from condo apartments) do not have a separate ownership title deed document. The procedure to obtain ownership of a structure separate from the land is as follows: If buying from a developer (depending on the sale and tax structure and liabilities the developer chooses) the sale of a house separate from the land lease is either by: a building sale and purchase agreement (see procedure under 3), or a building construction contract with a building permit in the foreign purchaser’s name. In case an individual person is developing a plot of (leased) land the building permit should be issued, or during the construction changed by the Or Bor Tor, in the name of the person that leases the land. Sale of a completed or existing building separate from the land requires the current owner and purchaser of the house to: sign a standard land office Thai script sale of a structure document (signed at the land office in front of the competent land official) followed by a 30 day public announcement/ posting of the house sale at specific locations after the announcement period the parties return to the land office to complete the transfer. Sale of completed existing house The sale of an existing house separate from the land (land lease combined with house sale/ ownership) must be registered with the local land office (the Samui, Phuket, Hua-Hin, Bangkok or any other local Land Department’s branch office) to be complete and property ownership transfer fees and taxes must be paid. Local property developers (in Samui) tend to offer a sale and purchase agreement for the house but skip the official transfer procedure (ownership has not transferred), or lease land and house (not recommended). The transfer of ownership of a building will take at least 30 days from the first visit to the land office to the issuance of the sale of a structure document (sample right or view sale document with short translation). The official land office sale document, stamped and signed by the local land office, is the document that proofs the purchaser’s rights to the house and completes the transfer. Required documents: ID-card, passport (seller/ buyer) House registration book (Tabien Baan) Land title document House building permit Property transfer fees Building permit Thai construction workers on building site under palm trees The seller of a house must have a building permit (sample top right) issued by the local Or Bor Tor. The building permit is the evidence that shows he owns the building and obtained approval to build the house. The building permit must be submitted to the Land Registry for the transfer of the house. It should be checked if the house is actually built according to the building permit. If the seller can’t show a building permit the house could be illegally built or may not be built according to local building regulations. The building Control Act imposes heavy fines and even imprisonment on violators. If any violation is found the authority has the power to issue a stop-work order and demand rectification of the building or an incorrect part within a reasonable time. If the building or an incorrect part cannot be rectified, the authority has the power to order a demolition thereof. When a land leaseholder hires a builder the building permit could be issued in the builder’s name or land owner’s name. In this case the name on the building permit should be changed by the local Or Bor Tor to the lessee’s name at any time during the construction, but prior to the issuance of the house registration book (tabien baan). The building permit is proof that you own the building and the building does not belong to the land owner but to the land leaseholder. Separate ownership of the house increases the lessee’s right and also lowers property tax liabilities (housing and land tax). Research by the Agency for Real Estate Affairs indicates the new city plan for Koh Samui will mandate that property projects cannot be constructed higher than 150 meters above sea level read more…. Similar to Phuket where the Ministry of Natural Resource and Environment issued a notification to protect the environment in Phuket prohibiting any building and renovation in the area 80 meters and more above the average sea level. Construction is not allowed even though the land could have a full land title deed. General considerations when planning to build or buy a house in Thailand (also for leasehold land for foreigners) what is the land title (this should at least be a Nor.Sor.3.Gor/ Khor or better a Chanote land title deed); is the land tile deed correctly issued and the title cannot be revoked on the grounds of any illegal issuance process (read warning under ‘articles news’); is there a solid legal structure for a long term interest in the land (proper land lease and/or superficies registered with the Land Department); what are the zoning and building regulations and restrictions for the specific area (what use and construction is allowed in the area); is there a private servitude, public or municipality road connecting the land with the public road; are there any mortgages, encumbrances, claims or security of any kind registered against the land title deed; are there any conditions in the previous sale or gift (right of redemption); the land is not subject to any promise or agreement, court order or other judgment or decree; the land owner is not involved in any action brought before court or bankruptcy/ insolvency proceedings; the land is not encroached nor is there encroachment on the land; the land is not subject to any land expropriation plan by the government; the land is not located in a land reform zone according to the laws on land reformation for agricultural purposes; the land is not located in a forest or nature reserve zone, or other area reserved for the public; the seller has not (implicitly or explicitly) declared the intention or done any act to give the land whether in whole or in part to the public; the seller does not hold the land as an agent on behalf of any third party, nor is there any third party having priority right to the land. Information above on behlf of samuiforsale

MAY

Buying Property In Thailand

There are several distinct purchasing options open to foreigners interested in how to buy a property in Thailand. Under Thai law, foreigners are unable to own land however foreigners are able to own structures, properties or apartments built on a piece of land in their own name. Foreigners are effectively able to own and control the land upon which their property sits through a Thai limited company or via a lease. Both leaseholds and Thai limited companies have been a viable and highly successful vehicle for foreigners buying property in Thailand for many years. A third option is to buy a condominium unit as foreigners are able to own condominiums freehold under Thai law. BUYING PROPERTY WITH A THAI LIMITED COMPANY A foreigner can set up a Thai limited company with the articles of association within the company protecting the foreigner 100% thus giving the foreign managing director complete control of the company. The foreigner can then use this company to buy property in Thailand with complete control whether it be a house, apartment, villa or plot of land. Some property owners sell their land or villa along with a Thai company simply by transferring the name of the foreign company director or if that is not the case, a Thai or international lawyer can easily set up a new company to buy the property through. BUYING PROPERTY LEASEHOLD Foreigners buying property in Thailand also have the option of controlling the land upon which a villa, house and apartment sits with a 30 year lease (the maximum leasehold term under Thai law). This lease can be re-newed for an additional 30 years plus additional 30 years, giving a total of a 90 year lease. BUYING A CONDOMINIUM FREEHOLD There is one freehold option for Foreigners wanting to buy property in Thailand with the Thai condominium act allowing foreigners to buy freehold. One important fact is that the condominium developer must ensure that only 49% of the total area of the development is sold to owners freehold. The other 51% of space in the development is available for foreigners to buy, but the only options would be to own the with a Thai limited company or leasehold as described above. No-matter what purchasing method is used the property will be officially registered at the local land office. The foreigner will also hold a property registration document sometimes referred to as the blue book.

MAY

Land Titles

MAY

House Construction Laws In Thailand

MAY

Buying Property In Thailand