- Legal Brief
Below is a brief overview on requirements for setting up a Thai limited company:
Except where required or restricted by the Thai Foreign Business Act, or other special laws or regulations,all directors and shareholders in a Thai limited company may be foreigners. The Thai Civil and Commercial Code governs the establishment and operation of a limited company.
Such company is managed by a Board of Directors in accordance with the Thai law and its Articles of Association. A minimum of seven shareholders must be maintained at all times for the limited company. Shareholders enjoy limited liability, i.e., limited to the remaining unpaid amount of the par value of their shares.
A Thai limited company formation will begin with the reservation of the Company’s name with the
Department of Business Development, Ministry of Commerce, by a promoter. A few days will be taken for
the Registrar to approve the Company’s name. Reservation when granted is valid for 30 daysand cannot
be renewable. There is no fee for reserving the Company’s name.
The next step will be the registration of a Memorandum of Association (Articles of Incorporation), including the business objectives of the Company, by 7 individual promoters. The Registrar will take 3-7 days to approve the Memorandum of Association. Registration fee is 0.05% on every Baht 100,000 of the authorized capital, with the minimum fee of Baht 500 and the maximum fee of Baht 25,000.
Following the registration of the Memorandum of Association, a promoter will issue a notice of Statutory
Meeting to the share subscribers. Notice must be given at least 7 days before the meeting date. This is
the first meeting of all the share subscribers, which include all the promoters, in order to, amongst others, approve the List of Shareholders, to adopt the Articles of Association (or By-Laws of the Company), to ratify all the past transactions conducted by the promoters, to appoint the first Board of Directors and the auditor together with the auditor’s remuneration.
Within 3 months from the Statutory Meeting date, the company formation application must be filed with the Department of Business Development, Ministry of Commerce. It will take no more than 1 week to approve the application. Registration fees are 0.5% on every Baht 100,000 of the authorized capital with the minimum fee of Baht 5,000 and the maximum fee of Baht 250,000. The Registrar will issue the certificate of incorporation for the Company, which means that the Company has been established under the Thai law.
Once the company has been set up, the company must register its Tax ID Card within 90 days of the date
of the incorporation. VAT must be registered prior to the business commencement. However, for small
business (i.e. those with incomes of Baht 600,000 -Baht 1,200,000) registration is required only
within 30 days of the day which the income reaches that level.
For more information, please contact the writer through the Malaysian-Thai Chamber of Commerce at
Note that the above is for general information only. The contents do not constitute legal advice and should not be relied upon as such. Please seek professional legal advice for specific cases.
By Supasak Chirasavinuprapand — Royal Advocates International Limited