Procedure for Company Incorporation in Thailand
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Step 1: Name reservation
The reservation of the company name can be done online at the Department of Business Development (DBD) website. The application for name reservation is normally approved within 1-3 days. Once the company name has been approved, it is only valid for 30 days (i.e. from the date of company name registration, all other steps for business registration must be completed within 30 days) and no extension is permitted. The company name must end with the word “Limited”.
Step 2: Filing MOA
Prepare the AOA (Articles of Association) and the and MOA (Memorandum of Association) These documents are the Bi-laws of the company. Thai Law allows for any Thai LLC to issue two types of shares if they so wish. Companies may elect to have only Ordinary Shares or a combination of Preferred and Ordinary Share types.
After registration with the Ministry of Commerce (MOC), the company can register its memorandum of association. At this point, all shares must be paid. To engage in foreign businesses, cabinet approval must be sought first.
The memorandum of association includes:
- The name of the proposed company
- The proposed registered office of the company in Thailand
- The company objectives
- A declaration that the liability of the shareholders will be limited
- The amount of share capital with which the company purposes to be registered and the divisions thereof into shares;
- The names, addresses, occupations and signatures of the promoters and the number of shares subscribed to by each of the promoters
Step 3: Register the business activities
Register the company’s business activities – This is an addition to the MOA which ensures that the Company is permitted to operate the type of business you want.
Register the company with the promoters and first shareholders
Step 4: Convene a Statutory Meeting
A meeting must be held with the company’s directors, shareholders and required other officeholders in attendance.
The meeting must conclude with the share structure, an appointed auditor and the Board of Directors. The Articles of Association must also be written and passed. Remuneration to promoters, number and type of shares must also be decided on. Other business to be conducted at the statutory meeting includes:
The adoption of the regulations of the company, if any;
- The ratification of any contracts entered into and any expenses incurred by the promoters in promoting the company;
- The fixing of the amount, if any, to be paid to the promoters;
- The fixing of the number of preference shares, if any;
- The fixing of the number of ordinary shares or preference shares to be allotted as fully or partly paid-up;
- The appointment of the first directors and auditors and the fixing of their respective powers.
Step 5: Company Registration
The company registration must be lodged on the same day that the Memorandum of Association is registered at the Ministry of Commerce provided that the Statutory Meeting has already been convened. The application for registration must be submitted no later than 90 days from the date of the statutory meeting.
It is during this stage of the registration process that company registration fees are paid.
The application will require details such as:
- Total number of shares subscribed or allotted
- Number of ordinary or preference shares allotted
- The monetary amount received for the shares
- Personal details of the directors (as well as the details of the Power of Attorney if there is a need for it)
- Registered address for the place of business or any branch offices’ addresses
The application must be declared to be true and correct by the director of the company.
The cost of registering the company depends on the amount of registered capital for the company. In general, the cost is in increments of 500 Baht for every 100,000 Baht of registered capital. The minimum cost is 5,000 Baht and is capped at 250,000 Baht.
Step 6: Tax and Value added Tax (VAT) Registration
A Tax ID number and VAT certificate must be obtained for businesses that are required to pay an income tax. The registration and certification can be done at the Central Filing Office of the Revenue Department within 60 days of registering the company. The cost is around 20 Baht for both the number and certification.
Any business entity that regularly supplies goods or provides services in Thailand and has an annual turnover exceeding 1.8 million baht must register for VAT in Thailand.
Step 7: Opening a Bank Account
Bank will require a set of minutes of the board meeting to approve the opening of the corporate account with details of the signing authority and requirements, along with the business registration documents and identification documents of the shareholders, directors, and authorized signatories to the bank account.
Step 8: Annual General Meeting
The Annual General Meeting must be held within 4 months of the fiscal year end as required by law. Not doing so will result in a fine as per the Thai legal requirements.
To set up a Thai LLC you need:
- a minimum of 3 promoters / shareholders
- a commercial address in Thailand
- a minimum of 1 director
- minimum capital requirement is 2,000,000 THB
- first Director of a Thai LLC must be a Thai National (this can be changed later)
- 51% of the company’s shares (majority) must be held by a Thai Juristic Person(s) and 49% of the shares can be held by Foreigners.
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