It’s no secret that the most common corporate structure used to set up a company in Thailand is a Thai Limited Company. There are many reasons why it is the most popular corporate structure used and basically it boils down to because, it supports a wide variety of business types. A Thai Limited Company is relatively easy to set up and it can be registered rather quickly. With the right capital a Foreign owner can get a Visa and a Work Permit. These reason seem to be the main reasons for its popularity.
Other Key Reasons
There is much more to a Thai Limited Company than meets the eye. Professional Corporate Services beleives that the following reasons are the true strengths of a Thai Limited Company;
Transperency
When you register a Thai Limited Company some of the most important aspects of the company are transparent. It allows third parties to see its corporate profile, financial state, shareholders list, directors, and more. When third parties get a glimpse of the company they usually feel more inclined to do business with that company.
Protection
A Thai Limited Company is a separate legal entity in fact it is a Juristic Person. This means that it can act as a Thai person can act. BUT it protects its shareholders whose only exposure is the value of the shares. So if the company has 4 shareholders and each shareholder has a 25% share in the company and the company’s capital is 2,000,000 THB, then each shareholder is only exposed for any part of the unpaid capital. If the capital is already paid up then they have no additional exposure.
Can Own Land
And because a Thai Limited Company is a Juristic Person it has the right to purchase and own land. The company name would appear on the Title Deed.
Steps Required To Set Up A Thai Limited Company
IMPORTANT - In order to register a Thai Limited Company you need a legal address in Thailand
VERY IMPORTANT - 51% of your company shares must be held by a Thai Juristic Person
EXTREMELY IMPORTANT - We can help you with both of the above
PCS will perform the following services for our clients to ensure that their Thai Limited Company is set up correctly from the start. The 5 points below can be completed in 3 to 5 business days.
- Reserve the company name
- List the promoters/shareholders and at least 1 director
- File the memorandum of association
- Convene a meeting
- Register the company
Additional Details Concerning Thai Company Set Ups
Item 1 - Reserving the company name - This is self-explanatory. You give us 3 company names, in the order you want the most. We translate them into Thai and find out if they are available. Then we reserve the one highest on your list. We can keep this name reservation for 30 days.
Item 2 - Promoters/Shareholders and Directors - The Civil and Commercial Code of Thailand requires that a company have at least 2 Promoters/Shareholders. Promoters must become shareholders and hold at least 1 share. The Law also requires that a Thai Limited Company have at minimum 1 Director.
Item 3 - Memorandum of Association - This document is usually prepared by corporate set up experts, as it contains a plethora of information related to your company for example; the name of the company, the company address, the company's business objectives, the company's registered capital, the type of shares and the number issued, as well as the value of the shares, plus the names of all of the promoters, and so much more. PCS customizes your company's MOA to suit your needs and we ensure it abides by the law.
Item 4 - Convene a meeting - Once the share structure has been confirmed, the company name reserved and the MoA is finalized, a statutory meeting should be convened to make all the final appointments. A key document very often overlooked by 95% of agencies, lawyers, and accounting firms is the Articles of Association. The AoA is similar to a company’s bylaws. Basically it defines almost everything in the company. This document takes hours to prepare properly, so people who register a company do not file one. In that case the Law will use a very basic AoA as set out in the Civil and Commercial Code of Thailand, which may in some cases be very frustrating to navigate. We prepare customized AoA for all our clients going into detail with each article.
Item 5 - Registration - Normally after the above mentioned meeting takes place the director(s) or their representative will file to register the company. In fact they may do so up to 30 days after that meeting. Once registration is complete your newly registered Thai Limited Company comes to life and like we explained previously it now is a Thai Juristic Person and operates independently of its shareholders.
The Next Steps
Your Thai Limited Company is now ready to operate but it also needs some additional tools. Here is what must happen next;
- Tax ID - Corporate income tax registration
- VAT registration
- Open a company bank account
- Register with the Social Security Office
- Filing work rules and regulations
You will also be very pleased to know that we can supply all the services mentioned above. Professional Corporate Services is very skilled in setting up companies in Thailand.
Accounting & Reporting Requirements
IMPORTANT - An annual shareholders' meeting must be held within 6 months from the Company's registration date. AND the Company must have an Annual Shareholders meeting.
Once a Thai Limited Company is fully set up the Company needs to set up some form of Bookkeeping and Accounting system. Typically a Thai Limited Company will file the following every month;
PND1 - Income tax deductions from payroll
PND3 - Withholding Tax collected from persons
PND53 - Withholding Tax from companies
PP30 - for VAT
Sor Por Sor 1-10 for Social Security Fund
A Thai Limited Company should also prepare a balance sheet and a financial statement every month. The reason for this is that it will certainly help the Accountant and the Auditor with their work for the year end reports. Plus its very good practice and can keep the shareholders very happy.
The biggest obligations and perhaps the most important ones as well are the Semi Annual and Annual reports. An Auditor must review and sign the financial statements at the end of the company's financial year. Then an Ordinary or Annual Shareholders Meeting (AGM) must be called to approve the financial statement. This must take place within 4 months from the Company's financial year end. And finally the Company needs to submit the financial statements to the Department of Business Development (DBD) within 1 month from the date of the AGM where the statements were approved by the shareholders.
Summary - Setting Up A Thai Limited Company
PCS has all the services you need to handle everything mentioned above! From setting up a Thai Limited Company to audited financial statements, Professional Corporate Services makes everything hassle free and at very reasonable prices! So, please do not hesitate to fill in the form below and Contact Professional Corporate Services. Please see our Special Promotion!
Contact PCS
Our Address
253 Sukhumvit 21 Road (Asoke), 25th Floor
Email Us
contact@pcsthai-1.com
Call Us
+66 2 109 5160