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Company Registration
 
Company limited
Establishing a company limited in Thailand requires registration with the Thailand Ministry of Commerce (MOC).
There three potential ways to structure a Thai company limited as follows:
 
I .Thai Owned

Thai owned company limited is considered anything a company whose shareholders hold 51% or more of the shares of the company. A common practice in Thailand has been for a Thai person to hold 51% of the shares and foreigner to hold 49%. 

However, the shares owned by the Thai person would be categorized as preferential shares so that the shares have minimal to no voting or dividend rights. 

This 51% / 49% structure effectively gives 100% control to the foreign shareholder(s) and avoids the application of the Thailand Foreign Business Act, which basically restricts foreign owned companies from performing service type businesses without a first obtaining a license from the Ministry of Commerce.

business registration
 
II. Foreign Owned

Foreign owned Thai company limited is generally required to first obtain a license to operate with the Thailand Ministry of Commerce before commencing operations. 

Applying for a foreign business license from the Thailand Ministry of Commerce can be costly, time consuming and risky due to legal fees involved and government bureaucracy.

 
REGIONAL OPERATING HEADQUARTERS (ROH)
 
Incentives
  1. 15% flate rate tax on income paid to foreigners employed by the ROH for a period of 2 consecutive years.
  2. Exemption on income earned by a foreigner permanently employed arising from a secondment/assignment abroad if such payment is not claimed directly or indirectly as an expense by the ROH.
  3. Reduction of corporate income tax from 30% to 10% on net profits received from qualifying services, technological/research royalties or loan interest from associated enterprises.
  4. Exemption on dividend income received from associated enterprises.
  5. Accelerated depreciation for permanent buildings at the rate of 25% on the date of purchase.
  6. Bringing in foreign experts and their spouses/dependents to conduct feasibility studies and perform work.
  7. Owning land to carry out promoted project including the land for housing of executives and employees.
  8. Remitting foreign currency aboard.
 
Conditions
  1. Entity incorporated under Thai law.
  2. Providing managerial, technical or "supporting services" to "associated enterprises" or its domestic/foreign branches.
  3. Supporting services means the following:
    3.1 General administration, business strategic planning and business cooperation;
    3.2
    Procurement of materials and parts;
    3.3 Product research and development; Technical support;
    3.4 Marketing and sale promotion support;
    3.5 Human resource management and training in the region;
    3.6 Financial consulting;
    3.7 Economic and investment analysis;
    3.8 Credit management and control;
    3.9 Other services stipulated by the RD.
  1. Associated enterprise means the following:
    4.1
    Company/partnership holding shares in the ROH not less than 25% of the total capital;
    4.2
    Company/partnership which the ROH holds shares or being a partner not less than 25% of the total capital;
    4.3
    Company/partnership in which the company or partnership in 1 holds share or being a partner not less than 25% of the total capital;
    4.4
    Company/partnership, which has the power to control or supervise the operation and management of the ROH;
    4.5
    Company/partnership which the ROH has the power to control or supervise the operation and management; or Company/partnership which a company or partnership in 1 has the power to control or supervise the operation and management.
  1. Paid up capital of at least 10 million.
  2. Provides services to associated enterprises in at least 3 foreign countries.
  3. Has service and royalty revenue paid from/in a foreign country aggregating at least 50% of total revenue, except during the first 3 accounting period, the revenue may be less than 50%, but not less than one-third of total revenue.
  4. Obtained operating licenses from relevant government agencies.
  5. Ratio of liabilities to registered capital should not exceed 3 to 1 for a newly established project.
 
REPRESENTATIVE OFFICE
 
Incentives
The RO of a foreign company is not subject to income tax provided that the services rendered by the RO are only provided to and for use by its head office. However, please be aware the Ministry of Commerce scrutinizes RO applications very closely now due to past abuse of its tax exempt status.
 
Conditions
A representative office (RO) in Thailand must be registered with the Thailand Ministry of Commerce as such and is restricted to the following types of activities:
  1. Searching for local sources of goods or services for its head office;
  2. Inspecting and controlling the quality and quantity of goods procured by its head office;
  3. Providing advice in various fields relating to products directly sold by its head office to local distributors or consumers;
  4. Disseminating information about new products and services of its head office;
  5. Reporting to its head office on local business developments and activities.
 
TRADE & INVESTMENT SERVICES OFFICE (TISO)
 
Incentives
  1. Permission to own land for an office;
  2. Permission to bring in foreign nationals to undertake investment feasibility studies;
  3. Permission to bring in as many foreign technicians and experts as required;
  4. Permission to take or remit foreign currency abroad; and
  5. No limit on number of shares owned by foreigners.
 
Conditions
  1. Applicants must be either companies established under Thai law, or companies planning to establish under Thai law;
  2. Operating licenses must have been acquired from all relevant government agencies;
  3. Operating expenses must amount to no less than 10 million Baht per year, which shall consist of sales and administrative expenses, as set forth in the Revenue Code;
  4. Operating plans must be approved by the BOI;
  5. Majority or total foreign ownership is allowed;
  6. Only non-tax privileges will be granted 
  7. A TISO will be limited to the following activities:
    7.1 Monitoring and/or servicing affiliates;
    7.2
    Advisory services on business operations except those engaged in buying and selling securities and foreign currency exchange. As for accounting, legal, advertising, architectural and civil engineering businesses, business licenses shall be obtained from the Department of Commercial Registration or related governmental agencies prior to promotion application;
    7.3 Information services on goods sourcing;
     
    • Engineering and technical services, except those related to architecture and civil engineering;
    • Testing and certifying standards of products, production and services that do not qualify for investment promotion under activity 7.13 of the list of promotional activities attached to Board of Investment Announcement No. 2/2543;
    • Export trading; Business activities related to machinery, engines, tools and equipment such as importing for wholesaling, training services, installation, maintenance and repairs and calibration that does not qualify for investment promotion under activity 7.14 of the list of promotional activities attached to Board of Investment Announcement No. 2/2543;
    • Software design and development that does not qualify for investment promotion under activity 5.8 of the list of promotional activities attached to Board of Investment Announcement No. 2/2543; and Wholesaling products manufactured in the country

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