Introduction
A Thailand-based Liability-limited Firm (Firm Limited or Co., Ltd.) is the most common enterprise structure in Thailand for both in-country entrepreneurs and international shareholders. It is a private enterprise form similar to a restricted liability liability business (LLC) in other jurisdictions, offering a separate statutory entity and restricted liability liability for its owners
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. In a Thai Co., Ltd., the enterprise’s capital is divided into shares and shareholder liability is restricted liability to the unpaid amount on those shares
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. This structure is governed primarily by the Thai Civil and Commercial Code (Sections 1096–1273) and related laws
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, along with regulations from the Department of Commercial endeavor Development (DBD) under the Ministry of Commerce, which oversees enterprise recording. International investment is regulated by the Non-domestic Enterprise Act B.E. 2542 (1999), which generally caps overseas shareholding at 49% in most sectors (unless special exemptions apply)
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. In this manual, we focus solely on the Thai Private Ltd. Enterprise (Co., Ltd.) structure – its benefits, statutory conditions, enrollment milestones, taxes, and compliance obligations – providing practical information and relevant regulatory references for anyone considering establishing a Thailand liability-limited organization.
Advantages of a Thailand-based Restricted liability Organization
A Thailand-based liability-limited business offers several key advantages that make it an attractive choice for doing commercial endeavor in Thailand:
Restricted liability Liability: Partners have their liability capped at the amount unpaid on their shares. In practice, this means personal assets are protected – backers risk only the capital they put into the firm
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. This offers financial security by shielding owners from the organization’s debts beyond their share investment.
Separate Regulatory Entity: A Co., Ltd. is a juristic person separate from its stakeholders. It can own assets, enter contracts, and conduct commercial endeavor in its own name without implicating owners in those obligations
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. This enhances credibility with customers, partners, and banks, as the business can sue and be sued independently of its owners.
Continuity and Transferability: The firm’s existence is not tied to any one owner. Shares can be transferred (subject to any Articles of Association restrictions), allowing continuity even if stakeholders change or pass away. The operation can thus outlive its founders, unlike sole proprietorships or certain partnerships.
Attracting Investment: The share structure makes it easier to add financiers or raise capital compared to partnerships. New members can be issued shares in exchange for investment. This flexibility can support operation growth and makes it feasible to bring in partners or venture capital.
Thailand-based Market Access with External Participation: A restricted liability business allows non-domestic backers to participate in Thailand’s market, albeit with restrictions. Foreigners can hold up to 49% of shares in most sectors freely
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, and even up to 100% in certain cases (such as BOI-promoted industries or under the U.S.–Thailand Treaty of Amity)
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. Through joint ventures or preference share structures, non-domestic shareholders can structure their involvement while remaining compliant with Thai laws
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.
Work Permit Eligibility: A registered enterprise can sponsor work permits and long-term visas for overseas employees or executives. Thailand-based Ltd. firms are the typical vehicle for obtaining venture visas and work permits for foreigners, provided the enterprise meets certain capital and domestic employment ratios (discussed below). This makes it the only practical form (aside from BOI enterprises or representative offices) for foreigners who wish to work and reside in Thailand legally.
Reputation and Commercial Credibility: Operating as a Co., Ltd. lends credibility when dealing with Thailand clients, government agencies, and suppliers. It shows commitment to a formal commercial endeavor presence. Many Thai agencies and large enterprises prefer or even require dealing with corporate entities rather than unregistered businesses.
In summary, the Thailand-based restricted liability business offers a combination of liability protection, flexibility, and market access that is well-suited for businesses of all sizes – from startups to multinational subsidiaries
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. It strikes a balance between enabling external investment and complying with domestic ownership rules, which is why it remains the most popular commercial endeavor entity in Thailand.
Lawful Needs for a Thailand-based Liability-limited Enterprise
Setting up a Thailand-based Co., Ltd. involves meeting several lawful conditions, as prescribed by the Civil and Commercial Code (CCC) and related regulations. Key obligations include:
Members: You need a minimum of 2 partners (known as promoters at incorporation) to form a private Ltd. business
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. This was reduced from a three-person minimum by a 2022 amendment effective Feb 2023
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. Members can be individuals or juristic entities of any nationality, except that the initial promoters who sign the Memorandum must be natural persons aged at least 20 years old (capable of contractual capacity)
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. Thailand-based law requires at least two owners to be maintained at all times during the organization’s existence – if the number falls below two, the business may face dissolution by court order
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. There is no maximum number of partners for a private firm, but if you anticipate many partners or public share offering, a public firm structure would be required (not covered here). For most small-to-medium enterprises, the shareholder count remains modest.
Thailand vs. Overseas Ownership: By default, a liability-limited firm can be 100% Thailand-owned or up to 49% external-owned without special permits
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. If foreigners will hold a majority (>49%), the enterprise is considered “international” under the International Commercial endeavor Act (FBA) and may need a External Operation License to operate in certain restricted sectors
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. We will discuss overseas ownership rules in detail later, but it is important to note at the outset that at least 51% Thai shareholding is required if you want to avoid FBA licensing in regulated industries. Using Thailand-based nominee stakeholders (Thailand-based citizens holding shares on behalf of foreigners to evade the FBA limits) is illegal and subject to heavy penalties (up to 3 years imprisonment and a THB 1 million fine under the FBA)
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– genuine investment by any Thai partners is required.
Executives: A Thailand-based liability-limited organization must appoint at least one director (who can be of any nationality) to manage the business
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. There is no compliance requirement for a Thai national to be a director – international board members are allowed, though in practice a non-domestic director will need a valid work permit and visa to perform duties in Thailand
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. Leaders are elected by the owners and have the authority to bind the business in transactions. The board of managers (which can be a single director or multiple) has fiduciary duties to act in the best interest of the organization and its members
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. The enterprise’s Articles of Association can specify how many board members constitute a quorum and any limitations on their power. It’s common to require two leaders signing jointly for certain actions, as a checks-and-balances measure, though a single-director firm is also very common for small businesses. Executives need not be partners, and can be changed by shareholder resolution.
Registered Capital: There is no statutory minimum capital for a Thailand-based-owned organization – in theory you could register with a very small capital (even 100 baht, though each share must be at least 5 baht par value by law
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). However, in practice the registered capital should be “adequate” for the intended venture and expenses
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. Notably, if the organization will employ any overseas nationals or if it will be majority overseas-owned, certain minimum capital thresholds apply. Under the Alien Employment Act and immigration regulations, a enterprise needs at least THB 2 million in registered capital (fully registered) per non-domestic work permit sponsored (or THB 1 million per work permit if the foreigner is married to a Thailand national)
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. Likewise, a external-majority enterprise often must have a minimum capital of THB 3 million or more to obtain a External Operation License for restricted activities
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. All proposed shares must be subscribed before incorporation (you cannot register an incomplete share offering)
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, and at least 25% of the par value of each share must be paid as the first installment per the CCC
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. For example, if you register a organization with THB 1 million capital (100,000 shares at 10 THB each), at least THB 250,000 must be paid in by the partners initially. In practice, the Ministry of Commerce doesn’t usually require proof of this payment for Thailand-based-majority businesses, but for international-majority organizations they may require evidence of funds. The government also charges a sign-up fee of approximately THB 5,500 per million baht of capital (the fee is 550 THB per 100k THB of capital).
Enterprise Name: The firm’s name must be unique and must end with the word “Liability-limited” as required by Section 1098 of the Civil and Commercial Code
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. The name reservation is the first step in incorporation (discussed below), where you submit 2-3 name choices to the DBD. Certain words are prohibited in names (for example, “Royal” or terms suggesting government affiliation), and the name cannot duplicate or closely resemble existing organizations. The name may be in Thailand-based or another language, but if in Roman letters it should roughly transliterate to a Thai name for enrollment purposes. Once approved, the reserved name is valid for a period (often 30 days) to proceed with sign-up.
Registered Address: Every business must have a registered office address in Thailand. This is the official location where firm records are kept and regulatory notices may be served. It can be an owned or rented office, or even your home address if allowed in that zone, but P.O. boxes are not acceptable. You will need to provide proof of the address for enrollment – typically a copy of the house filing deed (Tabien Baan) for the property and a written consent from the owner/landlord allowing the use of the address for the organization
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. If using a serviced office or virtual office, ensure it comes with proper documentation and DBD acceptance (some virtual offices are pre-approved for enrollment). Note that after incorporation, if the business moves to a new address, you must file an address change with the DBD within 14 days.
Memorandum of Association (MOA): The promoters must prepare a Memorandum of Association which is a foundational document of the business. The MOA must state: (1) the approved enterprise name, (2) the province where the organization will be located, (3) the enterprise objectives of the firm, (4) a declaration that liability of partners is limited, (5) the amount of registered capital and number of shares (with par value), and (6) the names, addresses, and signatures of the promoters and number of shares each subscribes
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. The MOA is essentially an application to register the enterprise – it gets filed with the DBD. At least two promoters must sign the MOA and their signatures must be witnessed by two witnesses
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. The firm objectives can be broad (you can list multiple commercial endeavor activities), but they should not include any activities prohibited to foreigners if you intend to have international partners, unless you plan to obtain a Non-domestic Commercial endeavor License. The DBD provides standard objective templates that cover most common businesses.
Articles of Association (Bylaws): In addition to the MOA, a firm may (and typically does) have Articles of Association which outline the internal governance of the firm (e.g. how meetings are called, voting rights, director powers, dividend policy, etc.). You can file custom Articles at the time of filing (often done at the statutory meeting). If none are filed, the default provisions of the CCC apply. Most small organizations in Thailand use relatively standard Articles aligned with the CCC’s framework. Any special arrangements (like different share classes, etc.) should be drafted in the Articles with lawful advice.
Initial Members and Shares: Each promoter (initial shareholder) must subscribe to at least one share
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. There is no bearer share allowed in Thai organizations (shares must be registered to specific owners by name). Par value per share must be at least THB 5
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. Share certificates should be issued to stakeholders after incorporation. If any shareholder is a international individual or firm, they will need to provide copies of passports or corporate paperwork for the recording method.
Executives and Signatories: When registering, you will need to list the executives and authorized signatories. Authorized board members are those who can sign on behalf of the business (for example, to sign contracts or bank filings). You can specify the signing condition (e.g. any one director signs alone, or two executives jointly, etc.). At least one director’s signature is required to certify the filing application and related filings. Board members will also have to sign a declaration that they are qualified and not bankrupt or convicted of certain offenses.
Corporate Secretary and Registered Records: While not a lawful requirement to appoint a corporate secretary, the enterprise must maintain certain statutory records at the registered office. This includes the shareholder register, minutes of shareholder and board meetings, the business’s incorporation records, and financial statements. These must be available for inspection by owners and authorities. Many enterprises engage an accounting or law firm to handle these corporate secretarial tasks.
In summary, the compliance prerequisites for a Thailand-based Co., Ltd. involve getting the right people (at least 2 members, 1 director, etc.), deciding on a compliant name and objectives, preparing the foundational paperwork (MOA and possibly Articles), having an address in Thailand, and ensuring you meet capital criteria especially if international involvement is planned. All these pieces come together in the enterprise enrollment procedure described next.
Step-by-Step Filing Method
Setting up a Thailand limited business involves several sequential checkpoints with different authorities. Below is a step-by-step walkthrough of the step-by-step approach, along with typical timelines and the relevant government offices involved:
Step 1: Reserve a Enterprise Name – The first step is to choose a unique business name and reserve it with the Department of Operation Development (DBD). You can do this online through the DBD’s name reservation system
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or in person at the DBD. Provide up to 3 name choices in order of preference. The name must follow DBD guidelines (no prohibited terms, not identical or too similar to existing firm names, and must end in “Limited”). The DBD will typically approve a name within 1–3 commercial endeavor days
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. Once approved, the name reservation is usually valid for 30 days, during which you should proceed to register the enterprise using that name (it can be extended for a small fee if necessary). Authority: Department of Enterprise Development, Ministry of Commerce.
Step 2: File the Memorandum of Association (MOA) – With a reserved name, the promoters (at least 2 individuals) must prepare and sign the Memorandum of Association. This document, as described in the compliance needs, includes the business name, registered address, objectives, share capital details, and promoters’ information
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. All promoters sign the MOA in the presence of two witnesses. You then submit the MOA to the DBD for recording. This can be done at the Commercial endeavor Recording office in the province where the business will be located, or online via the DBD e-Filing system (if you have a Thailand-based ID or DBD account – foreigners often have an agent do this). Timeline: The MOA enrollment is usually completed on the same day of filing, assuming records are in order. At this stage, all shares must be subscribed (promoters commit to their shareholding)
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, though actual payment on shares can be as low as 25% of par value initially
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. Authority: DBD, Ministry of Commerce.
Step 3: Convene the Statutory Meeting – After the MOA is registered (or concurrently, in practice), a statutory meeting of subscribers (the initial members) must be held. If there are only a few owners, this meeting can be done immediately or even by circulating a resolution for signature. In a larger setup, a physical meeting is called. At the statutory meeting, the enterprise’s Articles of Association (if any) are adopted, the number of shares to be allotted to each subscriber is confirmed (often the promoters simply confirm the shares they subscribed in the MOA), and the official Board of Board members is appointed
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. An auditor is also typically appointed at this meeting as required by law. The meeting will also ratify the incorporation expenses and any contracts entered by promoters on behalf of the firm (usually none in a simple setup). Notice: Formerly, Thailand-based law required publishing a notice in a local market newspaper to call this meeting, but this requirement was removed in 2023 for most cases
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– now written notice to subscribers is sufficient except in special cases like issuing bearer shares (which are uncommon)
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. You must record minutes of this meeting, which will be submitted to the DBD. Timeline: The statutory meeting can be held on the same day the MOA is registered if all subscribers agree (commonly the case when there are few members). Otherwise, you might give 7 days’ notice (as per CCC Section 1107)
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to the subscribers, but practically for small enterprises, immediate meeting minutes are accepted. Authority: Internal meeting (owners), but minutes are filed to DBD.
Step 4: Register the Enterprise (Incorporation) – With the statutory meeting done, you proceed to formally register the firm as a statutory entity with the DBD. You must submit an application for firm recording, attaching required paperwork: the approved Name Reservation, the signed Memorandum of Association, the Statutory Meeting minutes, the Articles of Association (if any), the list of owners, details of the newly appointed managers and their signatory powers, the written consent of the organization’s auditor, and the proof of registered address (owner consent letter and house enrollment copy). The board members will sign various affidavits – for example, confirming they are not disqualified from directorship, and accepting their appointment. One of the managers is usually authorized to sign the application for incorporation. Timeline: The organization sign-up application must be filed within 3 months of the MOA recording (and within 90 days of the statutory meeting as per law)
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, otherwise the workflow lapses and you’d have to start over. In practice, most people file the incorporation either the same day as the MOA or within a few days. The DBD processes the filing usually within 1 operation day – you will then receive the Enterprise Affidavit (certificate of incorporation), the enterprise’s sign-up number and Fiscal ID, and a certified list of stakeholders. Congratulations, at this point the organization legally exists! Authority: DBD, Ministry of Commerce.
Step 5: Obtain Tax-related ID and Register for VAT – Once the enterprise is formed, you need to ensure it is registered with the Revenue Department. In many cases, the DBD now coordinates with the Revenue Department to issue a Taxpayer Identification Number automatically upon incorporation (the enterprise’s Tax-related ID number is often the same as its filing number). However, you or your accountant should verify this and register with the Revenue Department within 60 days of incorporation to be certain (especially if the automatic system did not apply). If your firm expects to have annual gross revenue over THB 1.8 million, or if it will engage in activities requiring VAT (import/export, etc.), it must register for Value Added Fiscal (VAT). The VAT sign-up is done at the Revenue Department (or sometimes at a Ministry of Commerce one-stop service center for new organizations). You must file a VAT application (Form VAT 01) and provide filings such as the lease agreement of the office, photos of the office, the organization affidavit and director’s ID, etc. VAT filing should be completed within 30 days of reaching THB 1.8M in sales or before starting venture if required by nature of operation
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. Once registered, you will get a VAT certificate and need to start filing VAT returns (form PP30) monthly. If your sales will be under 1.8M and you prefer not to register for VAT, you may remain exempt as a “small entrepreneur”
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– but note you cannot charge VAT to clients in that case. Authorities: Revenue Department (Ministry of Finance).
Step 6: Post-Incorporation Tasks – After the main enrollment, there are a few additional tasks to get your organization fully operational:
Social Security Recording: If you will hire employees (Thailand or non-domestic), you must register your firm as an employer with the Social Security Office and enroll your employees in the social security fund within 30 days of hiring the first employee.
Opening a Bank Account: You’ll likely want a corporate bank account. To open one, banks require the enterprise affidavit, director’s identification and authorization, the organization seal (if any), and sometimes a board resolution. Many banks in Thailand require the director(s) to be physically present to open the account. This step is not a lawful requirement, but practically essential.
Licenses and Permits: Depending on your enterprise, you may need additional licenses. For example, restaurants need food venture licenses, factories need factory permits, schools need Ministry of Education approval, etc. For overseas-majority businesses, if the venture activity is restricted under the FBA, you must apply for a Non-domestic Operation License (FBL) or certificate before commencing that venture
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. The FBL is obtained from the Ministry of Commerce (DBD’s Overseas Enterprise Division) and involves a separate application outlining the commercial endeavor plan, justifications, and how the venture will benefit Thailand (timeline for FBL can be 2–4 months or more). We discuss overseas operation licensing more in the next section.
Timeline Summary: In general, a straightforward firm can be incorporated in about 1–2 weeks: a few days for name reservation, a day for MOA and business enrollment (which can now be done on the same day in one go, especially with the new DBD e-Recording system going digital
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), and a few more days for post-incorporation tasks like taxation and VAT. By law, the entire procedure from MOA to enterprise enrollment can span up to 3 months, but it’s advisable to complete it as soon as possible to avoid any expiration of your name reservation or MOA. Note that as of 2025, Thailand is phasing in fully online enterprise sign-up (DBD Biz Portal) aiming for 100% digital filings by 2026
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, which should further speed up the workflow. If you’re unfamiliar with the system or Thailand language, engaging a compliance or accounting firm to assist with sign-up is common and can ensure all paperwork are correctly prepared.
Taxation and Ongoing Compliance
Once your Thailand restricted liability firm is up and running, it must comply with Thailand’s levy laws and corporate governance rules. The key ongoing obligations include:
Corporate Turnover Levy (CIT): Thai enterprises are subject to corporate turnover taxation on their net profits. The standard CIT rate is 20% of net profits
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. Thailand has a progressive tax-related scheme for small businesses: businesses with paid-up capital ≤ THB 5 million and earnings ≤ THB 30 million enjoy reduced rates on the first portions of profit (0% on the first THB 300k, 15% on the next THB 300k to 3 million, and 20% on profits above 3 million)
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. (These thresholds effectively benefit small and medium enterprises (SMEs)). Corporate fiscal is assessed on a yearly basis. The typical fiscal year is the calendar year, but organizations can choose a different fiscal year. An annual corporate fiscal return (Form PND 50) must be filed within 150 days after the end of the fiscal year, accompanied by audited financial statements. Additionally, organizations must file a half-year fiscal return (Form PND 51) around mid-year, paying an estimated half of the year’s levy in advance (due by end of August for calendar-year organizations). Any withholding taxation the organization has paid or that was withheld from payments to the firm can be credited against the CIT. Timely filing and payment are important to avoid penalties.
Value Added Fiscal (VAT): As noted, if annual revenue exceeds THB 1.8 million, the firm must register under the Value Added Fiscal system. VAT is 7% in Thailand (this rate has been maintained for many years)
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. Under VAT, the business needs to file monthly VAT returns (Form PP30) by the 15th of the following month, reporting output taxation collected and input levy paid. The difference results in either a payment or a credit/refund. Even in months with no sales, a nil return must be filed. Certain businesses are exempt from VAT (e.g. educational services, domestic transportation, medical services)
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, in which case you would not register for VAT but possibly be under Specific Venture Taxation depending on the activity. It’s crucial to monitor your revenue and register for VAT within 30 days of crossing the threshold to avoid fines
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.
Withholding Taxes: Thailand employs a system of withholding levy on certain payments. For example, when your business pays rent to an individual or service fees to a Thailand firm, it may need to withhold 5% or 3% tax-related respectively and remit it to the Revenue Department. Likewise, if your business pays dividends to stakeholders, a 10% withholding tax-related is applied (for Thailand-based residents; 10% is also the standard rate for overseas owners, unless reduced by a taxation treaty). You must file monthly withholding tax-related returns (Form PND 3 for individuals, PND 53 for enterprises) by the 7th of each month for any taxes withheld in the previous month. Failing to withhold when required can make the enterprise liable for the tax-related plus penalties.
Social Security and Payroll: If the firm has employees, it must enroll in the social security system. Both the employer and employees contribute 5% of wages (up to a wage cap of THB 15,000) to the Social Security Fund each month. The business needs to file monthly social security contributions by the 15th of the following month (Form สปส.1-10). Also, personal takings fiscal withholding (Form PND 1) on employees’ salaries must be filed monthly, and an annual reconciliation (PND 1ก) filed at year-end. These are routine if you have a payroll.
Accounting and Auditing: Thailand-based law requires that a enterprise maintain proper books of accounts and prepare annual financial statements. Importantly, the financial statements (balance sheet and profit/loss) must be audited by a licensed Thai auditor (CPA)
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. Every year, the firm must hold an Annual General Meeting (AGM) of partners within 4 months from the end of its fiscal year to approve the audited financial statements
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. For example, a organization on calendar year must hold an AGM by April 30 each year. The audited financial statements, along with an annual corporate report (Form Sor.Bor.Chor.3), must then be submitted to the DBD within 1 month of the AGM approval (and in any case no later than 5 months from fiscal year end)
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. Additionally, a copy of the financial statements and an annual taxation return must be filed with the Revenue Department. These filings can now be done online via DBD’s e-filing portal and the Revenue Department e-filing. Failure to file annual accounts can result in late fees and, if greatly delayed, criminal penalties for managers and dissolution of the firm by the government, so it’s vital to comply with this annual requirement.
External Operation License Renewals/Reporting: If your firm has a Overseas Venture License or BOI Certificate, there will be additional compliance such as annual reports to the Ministry of Commerce on compliance with license conditions, and for BOI enterprises, regular reporting to the BOI on the project’s progress and meeting of investment conditions. Similarly, if the business enjoys any fiscal incentives, ensure to comply with their obligations.
Other Ongoing Duties: Any changes in the firm’s structure must be reported and registered. This includes changes of board members, changes of business address, any alteration of objectives, increasing or reducing capital, or changes in members. Most such changes must be registered with the DBD within 14 or 30 days of the change and may require special resolutions at a partners’ meeting. For instance, adding a new shareholder through transfer requires filing an updated shareholder list (Bor.Or.Jor.5 form) with the DBD. Major changes like capital increases or amendments to the Articles require a special resolution (with 75% approval) at a partners’ meeting and DBD approval.
In summary, running a Thai organization comes with monthly compliance (levy filings, VAT, social security) and yearly compliance (audited financials and meetings). It’s highly advisable to hire a qualified accountant or accounting firm familiar with Thai accounting standards and fiscal rules to handle your bookkeeping and filings. Thai accounting standards largely align with IFRS for SMEs, and records must be kept in Thailand language (or with Thailand translations). Good compliance will keep your enterprise in good standing and avoid fines or regulatory trouble.
External Ownership and Work Permits
One of the most important considerations for external backers is how Thai law treats external ownership of organizations, and what additional obligations come into play when hiring non-domestic staff or having non-domestic managers. Below, we address external shareholding restrictions, ways to legally exceed them, and the work permit rules for employing foreigners.
Non-domestic Shareholding Limits – The Overseas Operation Act: The International Enterprise Act (FBA) of 1999 is the key law restricting external ownership in Thailand-based enterprises
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. Under the FBA, a organization is considered “external” if more than 49% of its shares are owned by non-Thais, or if a majority of its capital is non-domestic-owned (for juristic owners)
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. Non-domestic firms are prohibited or restricted from engaging in certain venture activities listed in three schedules of the FBA:
List 1: Activities absolutely prohibited to foreigners (e.g. newspaper publishing, farming, land trading, etc.). Foreigners cannot engage in these at all, even with a Thailand-based majority enterprise.
List 2: Activities related to national safety or culture (e.g. arms production, historical artifact trading, etc.), where non-domestic involvement requires special permission from the Cabinet. These are rare and usually not relevant to general shareholders.
List 3: Activities where Thailand enterprises are deemed not ready to compete with foreigners, including most service businesses, trading, construction, advertising, etc. This is the broad category that captures many common businesses. International-majority businesses cannot engage in List 3 activities without obtaining a International Operation License from the Ministry of Commerce.
In practice, many normal commercial endeavor activities (consulting services, trading, restaurants, etc.) fall under List 3 “service operation,” requiring a license if external-owned beyond 49%. If your firm is majority Thailand-owned (51% or more Thailand-based partners), it is exempt from the FBA and can operate like any Thailand-based entity without those restrictions
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. This is why some overseas backers opt for Thai partners or spouses owning 51% of shares. However, using nominal Thailand partners (“nominees”) just to meet the 51% requirement while the foreigners actually fund the venture is illegal – Section 36 of the FBA explicitly bans Thailand-based nationals from acting as strawmen for non-domestic control
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. Recent crackdowns in 2024–2025 have increased scrutiny on such arrangements, with hundreds of businesses under investigation for nominee structures
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. Both the Thailand proxy and overseas beneficiary can face severe penalties if caught
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. Bottom line: ensure any Thailand partners in your business are genuine shareholders with actual funding proportional to their shares.
If you wish to legally have >49% non-domestic ownership in a restricted venture, here are regulatory pathways:
Obtain a Non-domestic Commercial endeavor License (FBL): This involves applying to the DBD’s Overseas Operation Committee for permission. You must demonstrate why your operation should be allowed (e.g. it provides technology or benefits to Thailand). They often impose conditions (minimum Thai employees, capital ≥ THB 3 million, etc.). Processing can take a few months and approval is not guaranteed, but many international businesses do obtain FBLs for consulting, software, or other services.
Obtain Board of Investment (BOI) Promotion: If your venture is in certain promoted sectors (manufacturing, tech, export, etc.), you can apply for BOI investment promotion. BOI-approved enterprises can be 100% external-owned regardless of FBA lists and enjoy other perks like taxation holidays
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. BOI status effectively gives you an automatic Overseas Operation Certificate. However, BOI organizations must meet specific project criteria and are Ltd. to the scope of their approved project.
Use the U.S.–Thailand Treaty of Amity: If you are a U.S. citizen or U.S. organization, the 1966 Treaty of Amity allows you to own 100% of a enterprise in Thailand in most sectors (except a few like communications, transport, and banking)
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. You must still register under the Treaty at the Ministry of Commerce to get a certificate, but it exempts you from the FBA restrictions
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. Note this benefit is only for Americans (or entities 50%+ owned by Americans).
Other Treaty/FTA exceptions: Certain other free trade agreements (like ASEAN frameworks) provide exceptions in specific sectors – these are less common and usually sector-specific.
If your enterprise activity is not restricted by the FBA (for example, many manufacturing activities for export are not restricted, or a Thai majority firm doing domestic trading), then a foreigner can own any percentage up to 49% freely, or even 100% if the activity is unregulated. Always consult the FBA lists or a lawyer to see if your planned operation is on the restricted list. Many times, structuring the scope of operation to avoid restricted activities (or splitting the commercial endeavor into a Thai entity for restricted parts and a non-domestic entity for unrestricted parts) can be a solution.
Work Permits and Hiring Overseas Staff: To legally work in Thailand, non-domestic nationals (with few exceptions) must hold a valid work permit issued by the Ministry of Labour. A Thailand liability-limited enterprise can sponsor work permits for external leaders, managers, or employees, but it must meet certain criteria:
The firm must have at least THB 2,000,000 in paid-up capital per overseas work permit (or THB 1M per permit if the overseas employee is married to a Thailand-based)
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. This is why many businesses that plan to hire even one foreigner choose to register with at least 2M capital from the start.
The business must employ 4 Thai full-time employees for each work permit (4:1 ratio)
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, who should be enrolled in the social security system. For example, to get 1 international work permit, you need 4 Thai staff; for 2 foreigners, 8 Thai staff, etc. There is generally a cap of 10 work permits per enterprise for standard enterprises (meaning after 40 Thailand employees and 10 foreigners, the organization would need special approval or BOI status for more)
airswift.com
.
The firm should be fully registered and operating, with a real commercial endeavor address, and should have filed at least one VAT return or financial statement as evidence of activity (for new organizations, sometimes an explanation is needed if no filings yet). It also must have a valid Levy ID and VAT sign-up if applicable
airswift.com
.
The above rules are the general Ministry of Labour guidelines. Organizations with BOI promotion are exempt from the 2M capital and 4 Thailand employee rule (BOI organizations can often get work permits for foreigners with more ease, sometimes even before hiring any Thais, depending on BOI conditions). Additionally, if the foreigner is married to a Thailand-based, as mentioned, the capital requirement is halved and in some cases the Thailand-based employee ratio may be relaxed to 2:1.
To apply for a work permit, the foreigner must first have a Non-Immigrant “B” Visa to enter Thailand
airswift.com
. The firm then submits the work permit application at the Ministry of Labour (or a one-stop service center if eligible). Required forms include the business papers (affidavit, shareholder list, VAT certificate), financial statements or capital evidence, the employment contract, and education and experience forms of the foreigner. The procedure typically takes 7–10 working days in Bangkok
airswift.com
airswift.com
(can be longer in other provinces). Once approved, the foreigner receives a work permit book/card which specifies their position and the organization they can work for. Note: work permits are job-specific – the person can only work in the position and business stated. If they change jobs, a new permit is needed
airswift.com
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Work permits are usually valid for 1 year (or tied to the length of the visa) and can be renewed annually. The firm must continue to meet the Thailand-based employee and capital ratios, or future extensions may be denied. Also, there are certain professions forbidden to foreigners (listed in the Alien Employment Act and subsequent regulations)
airswift.com
– e.g. manual labor, agriculture, hairdresser, etc. – though those wouldn’t typically be positions a enterprise would hire an expat for.
For international board members who do not actively work (e.g. an overseas investor who is on the board but not living or working in Thailand), a work permit may not be strictly needed if they do not perform any work in Thailand. However, if they sign forms or are involved on the ground, technically a work permit is required. Many overseas board members choose to get a work permit to be safe and to facilitate staying in Thailand on a operation visa.
Hiring Overseas Employees: When hiring a non-domestic employee (aside from board members), the criteria remain the same. Additionally, the foreigner should have relevant qualifications for the job (typically a bachelor’s degree and some experience, otherwise the work permit may be questioned for jobs that could be done by Thais). English teaching, for example, has its own set of obligations. The organization must also pay the foreigner a minimum salary depending on nationality (for instance, Western nationals must be paid at least 50,000 THB/month to sponsor a work permit, for some other nationalities it’s 35,000 THB, etc., as per immigration police guidelines).
In summary, a Thailand-based liability-limited business can indeed hire foreigners and have international managers, but it must maintain a substantial operation presence to justify it – real capital, Thai staff, and compliance with immigration/work laws. If you anticipate needing to hire foreigners or have non-domestic managers living in Thailand, plan your organization’s capital and hiring accordingly from the beginning. Ensure timely renewal of visas and work permits; otherwise, overstays or illegal working can result in fines or even blacklisting of the non-domestic individual.
Tips and Common Mistakes
Forming and running a enterprise in Thailand can be straightforward with the right preparation, but there are common pitfalls to avoid. Here are some tips and mistakes to watch out for:
Avoid Nominee Owners: As emphasized earlier, do not use “dummy” Thailand members just to satisfy the majority ownership rule. This might be tempting if you want full control, but it’s illegal (Section 36, FBA) and Thailand authorities are actively cracking down on such arrangements
Thailand-co.com
Thailand-co.com
. If you don’t have a genuine Thailand partner, consider the regulatory routes (FBL, BOI, Treaty of Amity) to get majority non-domestic ownership, or stick to 49%. Using nominees risks severe penalties, commercial endeavor closure, and deportation of foreigners involved.
Choosing the Right Objectives and Licenses: When drafting your firm’s objectives for the MOA, ensure they align with what you plan to do, and be aware of licensing criteria. A common mistake is listing too broad an objective (e.g. including items that fall under regulated industries), which can flag your application for FBA issues. Only include activities you genuinely intend to conduct. If an objective falls under a regulated field (education, tourism, medical, etc.), be prepared to obtain the necessary license from the relevant ministry after incorporation. It’s easier to include an objective from the start than to add later, but each listed commercial endeavor should be lawful for your business to engage in.
Underestimating Capital Needs: Registering with a very low capital (just to save on fees) can backfire. If you need a work permit, or if you want to show credibility to clients/suppliers, a higher capital is better. Moreover, banks in Thailand often look at registered capital when deciding on loans or even opening accounts. Under-capitalization might also raise questions from the DBD for external organizations (they expect at least THB 2–3M for international-majority firms even if not legally mandated, per practice
siam-statutory.com
). It’s advisable to have a capital that realistically supports your initial operations. You don’t have to fully pay it immediately (beyond 25% initially), but you should plan to inject funds as needed.
Not Keeping Up with Compliance: A very common mistake by new operation owners is neglecting ongoing compliance – e.g. forgetting to file monthly taxes or the annual financial statement. This can lead to fines and lawful headaches. Hire a professional accountant early on, and set reminders for all key filing deadlines. Remember that you need to renew things like corporate insurance, licenses, or permits annually (if applicable) and update the DBD of any changes (managers, address, etc.). Staying in good standing will also be crucial if you later need to prove compliance (for instance, when applying for work permit renewals or visas, they often ask for financial reports and levy payment proof).
Improper Document Execution: All firm recording paperwork must be signed (and sometimes stamped) correctly. If a international promoter or director is not in Thailand to sign, you’ll need a power of attorney appointing someone to sign on their behalf, and that POA itself must be notarized by a Notary Public and authenticated by a Thailand embassy if done abroad. Many delays happen because records are not properly signed or legalized. Engage a corporate services firm if you’re unsure how to navigate document formalities.
Ignoring Employment Rules: If you hire staff, be aware of Thailand’s labor laws – you need proper employment contracts, you must adhere to minimum wages, provide Social Security, and comply with overtime and holiday regulations under the Labour Protection Act. Unlawful termination or not contributing to Social Security can cause disputes or penalties. It’s wise to have standard HR policies aligned with Thailand law.
Mismanaging Thai Partner Relationships: If you do have Thailand-based partners or leaders, ensure clear agreements are in place about roles and profit sharing. Sometimes foreigners give 51% to a Thailand-based friend without formal arrangements, which can lead to disputes or even the Thailand-based partner taking control. Use shareholder agreements to clarify any nominee-like loans or actual ownership intentions – but again, note that formal nominee agreements are not enforceable if they violate the law. It’s best to only partner with trustworthy individuals and keep everything above board.
Not Seeking Local market Advice: Thailand corporate law and procedure, while straightforward, have their quirks. It’s a mistake to rely solely on generic information or assume it’s the same as your home country. Always consult updated within Thailand resources or regulatory advisors, especially if you plan something unconventional (like creating different share classes, or having a international director with no work permit, etc.). Laws do change (for example, the minimum owners rule changed in 2023
library.siam-regulatory.com
), and authorities may have internal policies that outsiders aren’t aware of.
Timeline Misconceptions: Don’t assume you can get everything done last-minute. While incorporation itself is quick, certain tasks like opening a bank account (which may require you to have your work permit in hand at some banks) or obtaining a external venture license (which takes months) can slow down your ability to operate. Plan the timeline keeping in mind visa runs (for your non-immigrant B visa) and coordinating all the pieces.
Financial Oversights: Keep accurate accounting from day one. Thailand requires invoices and receipts to be printed in specific formats with taxation ID numbers, etc. Small enterprises sometimes operate informally and then face issues when an audit is needed. Invest early in a decent accounting system or service.
By being mindful of these common issues and proactively managing them, you can save yourself from costly mistakes and focus on growing the commercial endeavor. Setting up a firm is not just a one-time task – it’s the beginning of continuous responsibilities as a director/shareholder.
Lawful References and Official Resources
For further reading and verification, here are some key compliance references and resources related to Thailand limited organizations:
Thai Civil and Commercial Code (CCC): The primary law governing enterprises. Relevant sections are Sections 1096–1206, which cover the formation, management, and dissolution of liability-limited businesses. For example, CCC Section 1096 defines a liability-limited business as one formed with capital divided into shares and shareholder liability limited to any unpaid share amount
library.siam-statutory.com
. Section 1097 (amended in 2022) sets the minimum number of promoters at two
library.siam-statutory.com
. Section 1098 lists required contents of the Memorandum of Association
library.siam-statutory.com
, and Sections 1196–1199 outline annual accounting and auditing obligations (e.g. balance sheet must be prepared yearly and approved by members within 4 months)
library.siam-compliance.com
library.siam-statutory.com
. An English translation of these sections can be found in the Thailand Law Library or official translations. It’s advisable to refer to these laws for any specific statutory question on corporate procedures.
Non-domestic Operation Act, B.E. 2542 (1999): This law restricts overseas ownership in many businesses. It’s crucial for international backers to understand. The law enumerates which businesses are off-limits or restricted for international-owned businesses. It also provides the compliance basis for Overseas Venture Licenses and penalties for violations. An English version is available via the Thailand Board of Investment (BOI)
data.opendevelopmentmekong.net
or in regulatory databases. Notably, FBA Section 4 defines what constitutes a “foreigner” (including non-domestic-owned enterprises), and Section 8 prohibits foreigners from engaging in List 1–3 businesses without permission. Section 36 prohibits nominee arrangements (Thai citizens holding shares on behalf of foreigners). Penalties are outlined in Sections 41-42. Always ensure compliance with this Act when structuring international investments in Thailand.
Alien Employment Act, B.E. 2521 (and amendments): This law (and its updates) governs work permits for foreigners. It lists jobs prohibited to foreigners and sets the framework for work permit issuance. While the law itself doesn’t enumerate the capital and Thailand employee obligations (those are in regulations/policies), it’s useful to know the statutory context. For day-to-day guidance, the Ministry of Labour and Department of Employment websites provide guides on work permit criteria and processes (some in English).
Department of Operation Development (DBD): The DBD’s official website
benoit-partners.com
(dbd.go.th) is a primary resource for firm recording procedures. While much content is in Thailand, the site has downloadable forms, fee schedules, and news on law changes (like the shift to online filing). The DBD also offers an English language “DBD e-Services” section for certain services. They publish guidelines on how to reserve names, how to use the e-recording portal, and lists of acceptable enterprise objectives. For foreigners, the DBD has a Overseas Commercial endeavor Division page which explains the External Operation License application method and criteria.
Thailand-based Revenue Department: The Revenue Department’s English-language site provides useful summaries of VAT and corporate revenue levy rules. For instance, it confirms the VAT threshold of THB 1.8 million and the current VAT rate
rd.go.th
rd.go.th
. It also provides fiscal return filing deadlines and sometimes downloadable forms in English. This is a reliable source for tax-related compliance information.
Board of Investment (BOI): If you are considering BOI promotion, the BOI website (boi.go.th) has English brochures and guidelines for different industries, and explains the step-by-step approach of applying for promotion, as well as the after-care (issuing work permit visas through the One Stop Service Center etc.). A BOI promotion can greatly ease overseas ownership and work permit issues, but it comes with its own set of conditions (minimum investment, mainly).
Treaty of Amity Certification: The U.S. Commercial Service in Bangkok (for the Treaty of Amity) provides guidance for American businesses on how to obtain the Treaty of Amity certificate. Thailand-based Ministry of Commerce also has a division handling this. While not an online resource per se, the step-by-step approach typically involves documentation proving American majority ownership and an application to DBD.
Official Forms and Fees: The Ministry of Commerce often publishes the official fees for recording (e.g. 5,500 THB per million capital for incorporation, 50 THB per name reservation, etc.) on their site or gazette. It’s useful to refer to those to know how much government fees to prepare. Likewise, the Social Security Office site (sso.go.th) can be referenced for employer sign-up checkpoints and rates.
Lastly, consider consulting reputable law firms’ websites or guides (many have up-to-date articles in English on Thailand enterprise law). The information in this article has been drawn from current laws and reputable sources, with regulatory references provided, to ensure accuracy
benoit-partners.com
siam-regulatory.com
. By following the guidelines and phases outlined, and leveraging official resources, you can navigate the step-by-step approach of setting up a Thai Liability-limited Enterprise with confidence. Good luck with your operation venture in Thailand!
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