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Who ever comes to Thailand and wants to stay longer might think about
opening his/her own business in Thailand. Please be aware that you must
always contact a lawyer or "law office" to set up a company
for you. There are three options used by foreigners to run a business in Thailand:
The Thai Private Firm
This one is mostly used by some bar owners. The business runs entirely
on the name of the Thai partner like girlfriend, wife, etc. Note that
with this sort of firm you have no rights at all in this business,
nor can you apply for a "B" Visa or a work permit. The only
chance to secure your property is, that you rent the building or place
where the business in on, on your name. Not
recommended!
The Partnership Limited
This is a cheap and easy way to set up a small business like
a bar or a restaurant for Foreign/Thai couples. A Partnership LTD needs
at least 3 Shareholders, were at least 51% of the shares must be in
Thai hands. When dividing the shares it should be 49% for yourself,
49% for your wife/girlfriend and the remaining 2% for a person you can
trust and is on your side, (not brother or sister of girlfriend). Usually
the lawyer who arranges the company will hold the 2%. Also keep in mind
that in a Partnership the Thai is always the Boss and also responsible
for that company. You have no legal power to sign any papers. You should
also secure your property as mentioned above. Setting up a Partnership
LTD costs only about 1000,- Baht if you do it by yourself or 10,000,-
Baht when you have a law office to do it for you. Note: A Partnership
LTD produces the same monthly/yearly costs as a Co. LTD like (accounting,
taxes, balance sheet)
The Company Limited Co.LTD
This form is mostly used by foreigners to set up a legal business in
Thailand. You must contact a lawyer to set it up for you, which costs
you about 35,000,- to 50,000,- Baht. Have a close look about what comes
with the offer, sometimes the application for a work permit is included.
A Co. LTD needs at least 3 Shareholders (it used to be 7!) and again, at least 51%
of the shares must be on the Thai side. Note, that the "Law Office"
usually "organizes" the remaining shareholders for you!
The Co. LTD is the only firm where the foreigner can be the Boss (Managing
Director) with the only signing Power for that company. Still, a second
Thai Director must be listed in the company papers but with no power
to sign!
Same as for the Partnership LTD, a Co. LTD may be set up with a registered
capital of only 1 Mill. Baht but it needs at least
2 Mill. to get a work permit for the foreigner.
New in March 2008:
The Thai government, prodded by the Commerce Ministry, is adopting major amendments to several partnership and corporate law provisions with the aim to simplify or do away with unnecessary statutory procedures under the Civil and Commercial Code. The amendment was published in the Government Gazette on March 3, 2008 and will be effective on July 1st, 2008.
Beside other things, the mandatory seven minimum shareholders in a limited company shall be reduced to three. The new rule will benefit both new and old companies.
Another welcome change is that the process of incorporation which took at least nine days under the old law can be done in one day under the new law.
It is now also easier and faster to:
- Upgrade or reduce the companies capital
- reduce the number of shareholders in a company
- change from a partnership to a company
- make important company related decisions, which required of up to 6 month of objection period and numerous newspaper announcements.
© Copyright: 2011-2012: Gerd Winterfeld, Living-In-Thailand.com
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