Setting up a Thai Company

Calypso Diving Krabi 1994
My own Business Idea in 1994: Calypso Diving Krabi

Who ever comes to Thailand and wants to stay longer might think about opening his/her own business in Thailand. But be aware that you can not just go the the municipal hall and get some kind of business license. If you want to run a business in Thailand as a foreigner, you have to set up a company with a certain capital, shareholders and so on.

Please be aware that you should always contact a lawyer or “law office” to set up the company for you.¬†Here I have listed the three different types of business which are available for foreigners.

The Thai Private Firm

This one is mostly used by some bar owners but sometimes also by Thai/Foreign couples for a restaurant. The business runs entirely in the name of the Thai partner. 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!

However, lately it is increasingly being tolerated and handled by the authorities, that a Thai woman for example can legally hire her husband for her business and even apply for a work permit for him.

As justification, this is interpreted in such a way that a husband must take care of his wife (financially in this case) and perhaps also of the family. This might not work in every province in Thailand but at least in Krabi and Phuket it does.

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 the brother or sister of your girlfriend. Usually the lawyer who arranges the company will hold the remaining 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: 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 Company Limited 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.