Thailand offers a number of incentives to companies choosing to register there, including a well-educated, English-speaking workforce, an advantageous tax system, and close proximity to numerous fast-growing economies in Asia.
If you are unfamiliar with Thailand’s market and laws, setting up an offshore company in Thailand can be a daunting task. What are the options? How do you go about it? And what are the benefits? In this article, we’ll compare the most popular options for setting up a company in Thailand:
- A Thai limited company
- BOI Thailand
- Thai branch office
Options for setting up an offshore company in Thailand
Thai Limited Company
A Thai limited company is a separate legal entity that is registered with the Thai Ministry of Commerce. It has its own legal identity, separate from its shareholders and directors. The company must also have a registered capital of at least THB 1 million and appoint at least three directors, and each director must hold at least one share.
A Limited Company can have:
- Majority Thai ownership where Thai residents own 51% of the company’s shares.
- Majority foreign ownership where foreigners own more than 49% of the company.
In the case of foreign ownership, companies have to obtain Foreign Business License (FBL) to commence operations in Thailand.
The main advantage of setting up a Thai limited company is that it offers limited liability protection to its shareholders. This means that the shareholders are only liable for the amount of money they have invested in the company. If the company goes bankrupt, the shareholders are not liable for any of the company’s debts.
Another advantage of a Thai limited company is that it is relatively easy to set up. Documents required to establish a Thai limited company are not as arduous as those required to establish a foreign company in Thailand.
BOI (Board of Investment) Thailand offers investment incentives for foreign business owners keen on investing in BOI’s promoted activities. To be eligible, you need to:
- have headquarters in Thailand
- have three shareholders
- have a registered capital of 2 million THB at a minimum
- file the Memorandum of Association (MOA) and hold a statutory meeting.
Thai Branch Office
Multinational companies wishing to operate in Thailand can also consider setting up a branch in Thailand. However, this will also require you to obtain an FBL.
The minimum investment capital for setting up a branch office must be 25% of the average operating expenses estimated for a three year period. However, it cannot be below 3 million Baht. Businesses also have to register for taxpayer ID and VAT. It is important to note that some business activities that compete with local businesses or impact the country’s security are prohibited for foreigners.
The Most Efficient Way to Expand Your Business in Thailand
If you are setting up an offshore company in Thailand, you have many options. However, more businesses are choosing to expand by using PEO and EoR services, due to how it helps companies save time and money. PEO and EoR services are the fastest ways to expand operations, allowing you to onboard offshore staff in as little as 48 hours. Contact our team of professionals to learn more about how we can help!
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Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, PEO/EOR Secondment, outplacement, recruitment and more! Contact us for more information on how we can help leverage your HR function.