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The change of government, the unclear political situation and the protesters on the streets of Bangkok can arouse an initial distrust of Thailand among potential investors. However, with a deeper knowledge of the local environment, it is clear that these events do not have as significant an impact on business activities as it might seem. A beautiful country full of sun, smiles and white sandy beaches. The word „Thailand“ means the land of the free. Does that mean it can give you freedom too?

Basic information about the country

  • The 20th most populous country in the world. Thailand has a population of almost 67 million.
  • According to a survey, Thailand is the 13th friendliest country in the world.
  • 95 % of the population practices Buddhism.

What can Thailand attract entrepreneurs?

  • In Thailand, you have the opportunity to establish three types of companies: Sole proprietorships, partnerships limited companies. The most popular are apparently the so-called limited companies.
  • 0% taxation for the first eight years.
  • Exemption from payment of VAT in case of import of machinery.
  • The possibility of obtaining another three years of tax holidays, if the company supports research and development.
  • Although it is possible to own 100 % of a company, some activities are prohibited to foreigners (especially US citizens). For that reason, in many cases it is necessary to use the services of nominees.
  • Relatively low prices and cheap labor are a pleasant bonus.
  • Companies are required to withhold income tax for all regular employees.
  • Thailand recognizes three types of intellectual property rights: patent, trademark and copyright
  • The most popular areas of business in Thailand are tourism, agriculture, textile industry and online services.

The principle of establishing a classic LTD

  • At least three companions
  • 51 % of the share must be Thai-owned – foreign persons and companies can in most cases own a maximum of 49% share in the company, except for companies that were established through BOI, which can be owned 100% by foreigners.
  • The company must have a registered office – a physical address (virtual is no longer possible) in Thailand
  • The company must have at least one executive with signature rights, if the executive is a foreigner, he should also have a work permit – Work Permit
  • Submits a classic tax return once per fiscal year and must undergo an audit
  • When establishing a company, you must be physically present in Thailand (must be documented with an entry stamp in your passport)
  • Thai law allows the shares to be assigned different voting rights, the so-called „Preferred Shares“, i.e. your minority share can have a voting majority and there is no risk that the Thai partner can outvote you.

Welcome to the world of „freedom“ and start a company in Thailand!

Basic information

  • Type of legal entity: Limited Liability Company (Ltd.)
  • Establishment time: 4 working days
  • Number of shareholders: minimum 3, maximum not specified
  • Shareholders: they can only be natural persons
  • Share capital: the minimum share capital is 100,000 THB, the maximum is not defined
  • Shares on bearer: not allowed
  • A registered address in Thailand is required
  • Local registered agent is not required
  • Directors: the minimum is 1, a natural person
  • Director residency: directors do not need to reside in Thailand

Taxation

  • Corporate tax. The standard rate for profit exceeding 3 million THB is 20 % (small business with paid-up capital less than 5 million THB, with net profit between 300,000–1 million THB rate is 15 %, for net profit <300,000 THB rate is 0 % )
  • Branch tax rate 20 %
  • Capital gains tax rate 20 %
  • Tax on dividends 10 %
  • Interest, royalties 15 %
  • Net operating losses can be carried against income for 5 years forward
  • The VAT rate in Thailand is 7 %
  • Double taxation. Thailand has concluded double taxation agreements with 56 countries. Generally, under treaties, the foreign tax credit is limited to the lesser of the foreign tax and the amount of Thai tax calculated on such income
  • Accounting and preparation of accounts is necessary, filing of tax return is necessary
  • Audit should be maintained, directors should appoint auditors
  • Anonymity and privacy. Information about directors and shareholders is not published in the company register.

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