Never before in the history of Thailand has business been on the rise as dramatically as it is during the current economy. As the demand for foreign investors increases, many savvy investors are considering starting their own business in Thailand. The people and their government are eager for the influx of all types of manufacturing, retail and export/import businesses, along with the opportunities of employment they bring with them.
For investors, it is important to understand the different types of ownership you can have when operating your foreign business in Thailand. Through certain legal instruments, you can set up direct ownership, along with the formation of your company in a variety of ways that generate the best tax advantages for you and your business. The following are just a few examples of how to set your business up to be its most profitable.
Foreign Ownership
For foreigners interested in opening up a business in Thailand, the law of the land allows each owner the ability to own 100% of their business in specific non--restricted categories. These categories include import/export businesses, along with various types of manufacturing businesses. Other avenues to obtain full control (non-Thai control) are by using specific methods including:
Applying for an alien business license BOI (Board of Investment), which might include needing the assistance of an alien business license registering through the National Treaty of Amity (only available if you are an American citizen)
Typically, these avenues of setting up a fully owned business in Thailand are not available for small companies. The only option left for the majority of investors is to through the formation of a Thai company.
Forming Your Company
In Thailand, large and small business owners can form their company in a variety of ways including:
Limited Partnerships - Partnerships can be set up as Unregistered Ordinary Partnerships, Registered Ordinary Partnerships and Limited Partnerships. Sole Proprietorships - A sole proprietorship company is owned by a single person that has unlimited liability. The sole proprietor's personal assets and business assets will be subject to an attachment or any other form of legal action. Only American citizens working under the Treaty of Amity are permitted to operate as a sole proprietor. Limited Companies (either private or public) - Private limited companies operate identically to Western corporations and are the single most used tool to establish a permanent company in Thailand. A minimum requirement of seven shareholders is necessary at all times.
Of these available options, the largest majority of foreign investors choose to create a private limited company. Generally this is based on the ability to limit shareholder liability by the amount of shares each shareholder possesses. Additionally, a private limited company provides a complete separation between the management and the company investors, a much sought after solution to protecting valuable company assets.
Requiring a minimum of three promoters, each company must file a legal "Memorandum of Association", convene and complete a statutory meeting, register the business as a private limited company, and obtain an income tax identity card for your company. Opening your own business in Thailand is a simple process to perform.
