The majority of companies setup by foreigners in Thailand must have a majority of Thai shareholders, there are exceptions to this such as a BOI company but a standard Thai company must have a majority of Thai shareholders.
If you are investing in opening a company in Thailand then it is important to only choose people you trust to be your Thai shareholders.
It is recommended to have more than one Thai shareholder so that the foreign 49% share remains as the majority shareholder.
Having a majority of your companies shares owned by Thai nationals does not automatically mean that you lose control of the company. There are a number of measures which you can put into place to ensure that you stay in control of your company.
You are appointed as the sole Managing Director
Sole signatory authority — the bylaws / Articles of Incorporation state that all decisions must be signed by this Managing Director
You split the stock between “ordinary” and “preference” shares whereby your “ordinary” shares each have 2 times (or more) the voting power of the “preference” shares (preferred for dividend payments, not for voting)
Set a quorum of shareholders at 65% so that the bylaws cannot be changed nor can the Managing Director’s sole authority and powers be changed.
Once you have chosen your Thai shareholders, the next process is to choose a company name, write your company description, check the availability of the company name (this can be done online), design & make your company stamp (get at least 2) and register the company at Business House.
What else do I need to know about setting up a company in Thailand ???
It is extremely important to know the penalties should you not adhere to the restrictions imposed. Non-compliance could result in a three year prison term and/or a fine of between 100,000THB -1,000,000 THB.
Once you have setup a company you need to submit a balance sheet to the tax office every year even if the company doesn’t have any turnover.
You must maintain a company address.
If you have an annual turnover of more than 1,800,000 THB then you must register for VAT within 30 days of reaching that amount of turnover.
If you wish to apply for a work permit based on your Thai company you will need to have a minimum of 2 million THB in registered capital, 4 Thai employees and pay social security for your Thai employees every month.
Social Security deductions are 10% of the employees salary, 5% is paid by the employer and 5% is paid by the employee.
How long does it take to setup a Thai company ???
- Foreigners who intend to work in Thailand should apply for an initial 90-Day Non-Immigrant B visa
- The work permit application takes place during the initial 90 days
- Once a valid work permit is obtained, the applicant can then apply for a 1-Year extension to their permission to stay
- Once you have a 1 year extension of stay then you must report your address to immigration every 90 days.
- A re-entry permit is required if the applicant wishes to travel outside of the country.
- Extensions of this visa can be done inside Thailand.