Different Business Structures in Thailand

In Thailand, there are several different business structures available. These include a Thai Limited Company, a Representative Office and a Foreign Business Licensed Company. Each structure has its benefits and disadvantages. Here's a look at some of them. Hopefully, this information will be useful to you.

Thai Limited Company

A Thai Limited Company is a business entity that is registered with the Thai government. The Department of Business Development of the Ministry of Commerce performs the duties for the original incorporation of a company. The department also oversees and registers companies and provides business services. A Thai limited company does not have a legal entity, but it is required to pay Value Added Tax, which is a small tax that is applicable to companies.

When forming a Thai limited company, you should be sure to obtain a Tax ID or registration number from the Ministry of Commerce. Once you have your company's registration number, you can then open a corporate bank account.

Representative Office in Thailand

A Representative Office in Thailand is a legal entity that manages the service business of foreign companies in Thailand. In order to set up a representative office, a foreign company must have at least one representative and invest at least 3 million THB. The Representative Office must pay taxes on salaries but does not generate revenue for the company.

Representative Offices are not allowed to make sales and receive purchase orders, but they are allowed to provide information on products and services. Their main job is to assist the Head Office in marketing and distributing their products and services in Thailand. While they cannot sell their own products or services, they can source goods and services for the headquarters. This is often beneficial to businesses looking to save money on products. Additionally, Representative Offices can provide quality control services for goods.

Once you've decided to establish a Representative Office in Thailand, the next step is to file the necessary paperwork. You'll need to fill out and submit an application with the Department of Business Development. If your application meets the standards, you should have no problem getting the necessary approval. However, you should keep in mind that this process can take as long as a month.

Foreign Business Licensed Company

When you want to establish a business in Thailand, it is important to apply for a Foreign Business Licensed Company. As a foreign citizen, you must meet certain requirements, including having a minimum capital requirement of two million baht and having at least one Thai director or shareholder. While there are exceptions, it is not always possible to incorporate a business without a Foreign Business Licensed Company in Thailand.

First, the Department of Commerce will review the potential competition that your new business will face, including the knowledge and technology-based nature of your business. Once the approval is granted, you can start conducting business in Thailand. You should apply for a Foreign Business Licensed Company in Thailand if you want to enjoy the tax benefits available to you.

A Foreign Business Licensed Company in Thailand should avoid engaging in business that may expose it to liability from third parties. It is important to note that a Foreign Business Licensed Company in Thailand should engage in service-based activities, rather than manufacturing products. As a result, the Foreign Business Licensed Company should only conduct business in areas where Thai nationals are qualified to operate.