Posts in category: Corporate

A Representative Office is a Thai business entity which is responsible for non-expenditure activities of the Foreign company. It cannot generate income and its expenditures must be borne by the head office.

Setting up a Representative Office is much easier than incorporating a branch or limited company in Thailand. The Department of Business Development usually issues a certificate within two to four weeks.

Legal Requirements

A representative office of a foreign company can engage in a wide range of activities, like buying and selling goods and rendering services. It is not subject to corporate income tax, except for interest on funds it receives from the head office.

It is allowed to report on business movements in Thailand to the head office. It can also source products and services for the head office. This helps companies save money by eliminating the cost of importing raw materials.

The representative office needs to submit documents containing the company name, capital, place, directors and authorized signatories. It should also include a description of the reason to establish the Representative Office along with its estimated budget for the first three years. It should specify the number of foreign and Thai staff, nationalities and shareholdings. Additionally, the company must provide the work permit ratio of four Thai employees for every one foreign worker. The foreign head office must also certify that the representatives are qualified to manage the business activities of the Representative Office.

Requirements for a Local Manager

The representative office acts as a liaison between the company’s head office and its offices in other countries and does research for commercial information, advising the parent office of market trends. In addition, the representative office can do marketing and exhibit samples of goods at trade fairs for the parent company.

In the past, establishing a representative office was difficult because it required a Foreign Business License (FBL) that would take months to obtain. However, now the process is much easier for foreign companies wanting to establish a presence in Thailand.

To set up a representative office, the foreign company is required to submit certified copies of its articles of incorporation and power of attorney for the local manager. These documents should be notarized and/or certified by a Thai consulate or embassy abroad. Additionally, the passport and non-immigrant visa of the local manager must be provided. Upon submission, the Department of Business Development will issue a certificate for the representative office, enabling it to commence operations within two to four weeks.

Requirements for a License

Generally, foreign companies want to set up representative offices in Thailand for market research and business support. These offices can be 100 percent foreign-owned and are allowed to hire up to two work permit holders. However, they cannot earn revenue in Thailand and are not taxable.

In order to operate a representative office, the company must submit a letter from the head office that confirms its location and financial statement. It also needs to submit a notarized power of attorney for the manager and proof of identity.

A representative office in Thailand must have at least 2 million baht in capital. It also must not engage in any revenue-generating activities and can only provide services listed under List Three (21) of the Foreign Business Act. In addition, the representative office must remit money to its head office or affiliated company/group of companies. Moreover, it can only receive funds to cover expenses, and it has no authority to accept purchase orders or offer for sale or negotiate for carrying on business with any person or juristic person.

Requirements for a Business Address

Foreign companies that wish to conduct marketing and business support activities in Thailand without obtaining a foreign business license can establish a representative office. This type of office is not allowed to earn revenue and can only provide important information back to the company’s head office.

Requirements for a representative office include an application to the Ministry of Commerce. This must contain a declaration that the applicant and their directors satisfy the requirements of Section 16 of the Foreign Business Act. Additionally, a notarized power of attorney from the foreign head office to the local manager must be submitted.

A representative office must also submit a minimum capital infusion of either 3 million baht or 25% of the estimated expenses for its first three years of operation, whichever is higher. This must be brought/transferred into Thailand according to a predetermined schedule. This is an ideal option for foreign businesses that want to test the waters in the Thai market before incorporating a company limited.

A Limited Company is a legal entity that can be operated for a long period of time. Normally, it cannot be dissolved easily. The first step is to reserve the name of the company. This can take a few days to complete. Then, a statutory meeting must be conducted.

Choosing a Company Name

One of the first steps in registering a business is choosing a company name. It should be unique and represent what the business does. It should also be easy to pronounce for non-English speakers. The company name should not be related to the names of governmental units or the royal family. It should also not be against public morals.

Once the company name is chosen, a statutory meeting must be held. During this meeting, the company charter and articles of association are drafted. Moreover, the responsibilities of directors and auditors are assigned at this time. In addition, it is mandatory for a limited company to have its head office located in Thailand along with a copy of house registration (Tabien Baan) number and Letter of Consent obtained from the landlord.

Memorandum of Association (MOA)

When it comes to setting up a limited company in Thailand, it is essential to prepare a Memorandum of association (MOA). This document outlines all the important details about the business, such as its financial state, shareholders list, and directors. It also ensures that the company is registered in accordance with the law and is a trustworthy investment for both investors and third parties.

One of the main requirements for a limited company is its capital requirement, which must be at least 1 million baht. The company must also have at least four local employees for each foreign worker employed, if it wants to apply for a work permit. The MOA is filed with the Department of Business Development along with a stamp duty of 200 baht. It also includes a statement of the company’s objectives and principles at the time of its formation.

Articles of Association (AoA)

A Thai company’s articles of association are a public document that outlines how the company will be run, governed, and owned. The articles can put restrictions on the company’s powers – for example, they can prohibit the directors from pursuing certain courses of action without shareholder approval. Your corporate lawyer in Thailand can help prepare the documentation and submit it to the Ministry of Commerce.

The documents should include information about the company’s structure, including details of its directors and shareholders. They should also contain a description of the purpose of the company. This is important because it demonstrates that the company has a clear purpose and will be sustainable for the long term. The documents are also enforceable against third parties, unlike private Shareholder Agreements.

Conduct a Statutory Meeting

Once the MOA has been approved by DBD, the company must hold a statutory meeting. This meeting is a crucial step in the drafting of the company charter. It will contain information such as the company name, address, intended scope of business activities, the number and type of shares issued, the signatures and details of shareholders, and a declaration that the liability of the shareholders is limited.

The company must also arrange annual shareholder meetings and submit accounts to the registrar. If a company fails to meet these requirements, it may lose its right to register. In addition, a foreign company cannot purchase land in Thailand without the cabinet’s approval. Moreover, a foreign director must retire at least once every three years. This requirement is subject to future changes in the law.

Company Registration Proper

In Thailand, the registration of a Limited Company is an important step. This process includes the reservation of a company name (in accordance with the guidelines set by the Department of Business Development) and convening a statutory meeting. This meeting should include details of the company’s shareholders, address, and registration number, intended scope of business activities, province of registered office, declaration that the liability of the directors is limited, and a list of members.

Our team of proficient lawyers, fluent in English, possesses extensive expertise in assisting entrepreneurs throughout the company registration process in Thailand. We also offer guidance on work visas and immigration matters. Our goal is to simplify and expedite the process for you, ensuring full compliance with Thai law.

Company registration in Thailand is a long process with many steps. A legal advisor can help you get your business up and running quickly and stay legal once you’re in business.

The company name must be different from an existing registered Thai or foreign business and must end with “limited.” A registrar may reject the application if it’s too similar to another name.

Basic Requirements

If you want to set up a company in Thailand, you must first reserve the name of your enterprise with the Department of Business Development (DBD). The names must end with ‘limited’ and cannot be identical to or similar to other registered companies. Also, certain terms are prohibited, such as the word investment or capital.

The next step is to draft a Memorandum of Association, which includes the company’s business objectives, capital, number of shares, and the names of promoters. You must have at least three promoters for a private limited company and fifteen for a public limited company.

After drafting the document, you must deposit the necessary minimum share capital and pay stamp duty. You will also need to open a bank account for your company and obtain any other sector-specific licenses required by the government.

Thai Limited Company

A limited company is the most popular business structure for foreign investors in Thailand. It is a legal entity that has its own rights and obligations separate from its shareholders, which makes it easy to manage. It also allows for a wide range of ownership options and is more flexible with respect to working permit requirements. In addition, it offers the protection of limited liability to its shareholders, which means that any agreements or commitments made by the company do not bind the shareholders personally.

When setting up a Thai limited company, there are several steps that must be followed. The initial promoters must file a memorandum of association, convene a statutory meeting and register the company. The company must also open a bank account and apply for its tax ID card.

Thai Representative Office

A representative office is a commonly chosen option for foreign companies seeking a non-trading legal entity. This form allows complete ownership by the foreign company and functions as a unified legal entity that serves as an extension of the headquarters. While it cannot generate income within Thailand, it can provide reports on business trends in the country to the head office.

A law firm can provide assistance in preparing the necessary documents required for establishing a representative office in Thailand. These documents include a notarized copy of the representative’s passport and proof of non-immigrant status. It is essential for these documents to be notarized and certified by the relevant Thai embassy or consulate before being submitted to the commercial register.

Typically, a representative office is exempt from taxes, but it must allocate a minimum of Baht 3 million as operating expenditure within the country. This capital injection needs to be completed during the initial year of operation.

Thai Partnership

If you’re planning to set up a business in Thailand, it’s important to understand the different types of structures available. Choosing the right structure depends on the size and nature of your business, and it also has implications for taxes. Depending on your objectives, you may want to consider a partnership or a limited company.

Ordinary partnerships are a form of association where all partners are jointly and unlimitedly accountable for the partnership’s obligations. They can be unregistered or registered. Registered ordinary partnerships are treated as juristic entities for tax purposes.

Foreign investors can also establish a representative office or branch office in Thailand. These non-trading companies cannot earn revenue, but they can conduct market research and promote products. They can also collaborate with local companies to gain access to resources and expertise.

US-Thai Treaty of Amity

The US-Thai Treaty of Amity allows Americans to form a business in Thailand. However, the company must be a limited company with a minimum of 2 million baht in capital to receive protection under the treaty. This is a substantial amount, especially since violations of Thai business regulations are punishable by criminal penalties.

The US-Thai Treaty of amity provides a range of benefits for American investors, including the ability to maintain majority ownership of the company. It also grants national treatment, which means that US companies are exempt from the restrictions of the Foreign Business Act. To apply for the treaty, the business must submit a notarized copy of each owner’s passport or birth certificate and provide documents that establish that the company meets the requirements of the treaty.

If you are considering company registration in Thailand, we encourage you to reach out to us. Our team is well-equipped and experienced in assisting foreign companies with their registration needs. We can provide comprehensive guidance and support throughout the process, ensuring a smooth and efficient establishment of your business. Don’t hesitate to contact us for personalized assistance tailored to your specific requirements. Let us be your trusted partner in navigating the complexities of company registration in Thailand. We look forward to hearing from you and helping you achieve your business goals in this vibrant market.