Over the past several years, Thailand has been positioning itself as an attractive environment for foreigners looking to do business in Southeast Asia. It boasts plenty of natural resources and is more affordable than prime business locations such as Singapore.
Before you register a Thai company, you should know that there are several types of businesses that foreigners can run here in the kingdom. There are also limitations on what industries you can enter, the goods and services you can provide, and the percentage of ownership you have over the business.
Let us learn more about the types of business structures you can have and how you can achieve full ownership.
Business Structures Available to Foreigners in Thailand
In this discussion, we will focus on business models that let you generate income:
Sole Proprietorships
As the name suggests, this type of business is owned by one person. They can do most types of business as allowed under Thai law.
Only foreigners who can exercise the US-Thai Treaty of Amity can register a Thai company as a sole proprietorship. Those who are not US citizens but are married to Thai nationals are allowed to register using their spouse’s name.
Partnerships
If a foreigner wants to start a company with one or more business partners, they can register as a limited partnership. Should the foreigner be the managing member, they need a work permit and business visa.
Moreover, regular limited partnerships only allow for 49% foreign ownership, with 51% ownership given to Thai nationals.
Limited Companies
Like partnerships, limited companies permit foreigners to have 49% ownership. There must be at least two shareholders and a director before you can register the Thai company.
This is the most common business model used by foreigners. The government generally does not restrict a limited company’s activities so long as it is Thai majority-owned.
Joint Ventures
This business structure is another popular one for foreign investors who want to set up a company in Thailand. This model generally pertains to businesses run jointly by two parties, which can be:
- Two separate companies
- A company and a partnership
- Two partnerships
- A company or partnership and a sole proprietor
Thai law considers the parties in this model as separate entities except when filing taxes and applying for business licences.
How to Own 100% of Thai Limited Partnerships/Companies
If a foreigner wants full ownership when registering a Thai company, there are three main ways to do so:
The first option is to apply for a Foreign Business Licence or FBL. Do note that while this lets foreigners own all the shares, it also severely limits the type of operations they can do.
Some business activities make companies eligible for a Board of Investment or BOI promotion. Besides allowing 100% foreign ownership, businesses can hire more foreigners, have less stringent work permit requirements, and can enjoy incentives and tax exemptions.
US citizens can own businesses all by themselves under the Treaty of Amity. They do not need to procure an FBL and thus are exempted from many of the restrictions that other foreigners are subjected to. However, at least half of the directors and shareholders must be Americans.
Set up Shop With a Thai Business Service’s Help
Once you have figured out what structure and ownership percentage you want, it is time to register your Thai company. Besides fulfilling your requirements, the process comes with other challenges, starting with the language barrier.
Fortunately, you can have Thai corporate business services firm handle your business’s registration in Thailand. Many companies here offer such services to help locals and foreigners navigate the various procedures involved in setting up shop here.
Thailand holds plenty of promise for foreign businesses. All you need to do now is take a leap of faith, invest, and work with the right people.
