Thai Limited Company Registration
Business Services
What is a Thai Limited Company?
A Thai limited company, especially a Private Thai Limited Company, is the preferred business structure in Thailand due to several notable features. One key aspect is the requirement of at least three shareholders, ensuring a minimal yet sufficient spread of ownership. Additionally, the limited liability feature means that shareholders’ liability is confined to the par value of their shares, protecting personal assets from business debts and obligations. Management of the company is typically handled by directors, which minimizes the involvement of shareholders in day-to-day operations.
According to Section 1096 of the Thai Civil and Commercial Code (CCC), a limited company is established with its capital divided into equal shares. This structure ensures that shareholder liability is restricted to the unpaid amount on their respective shares, providing a clear and organized framework for business operations. The legal foundation laid out in the Thai CCC offers a secure and efficient mechanism for forming and managing a limited company, contributing to its popularity among entrepreneurs in Thailand.
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Key things to consider before registering a Thai company
Thai companies require a 51% Thai-ownership. Do you have a Thai National partner?
Additional Information:
To register a Private Limited Company in Thailand, these are the steps:
- Initial Shareholders: At least three natural persons are
- Registered Office: The company must have a registered head office in Thailand, with supporting documents such as a copy of the House registration (Tabien Baan) number and a Letter of Consent from the landlord.
- Capitalization Requirements:
- Minimum registered capitalization of 2 million THB for foreign businesses operating non-restricted activities.
- Minimum registered capitalization of 3 million THB for those engaged in restricted activities under the Foreign Business Act.
- Memorandum of Association: Submit a memorandum of association with the application.
- Statutory Meeting: Convene a statutory meeting.
- Bank Certification: Provide a Letter of Certification from the bank to confirm the adequacy of funds in the Thai shareholder’s personal bank account if Thai shareholders are among the foreign shareholders.
- Signatures: All shareholders/initial promoters and directors must sign relevant sections of the application documents within Thailand.
FAQ
Can Foreigners Fully Own a Thai Limited Company?
Foreigners are generally limited to owning a maximum of 49% of a Thai Limited Company, with Thai nationals required to hold at least 51% of the shares. However, there are exceptions for certain sectors like export and specific manufacturing businesses where 100% foreign ownership is allowed. Full foreign ownership can also be achieved through an alien business license, Board of Investment (BOI) incentives, or, for American investors, the Treaty of Amity.
What is a Thai Limited Company?
A Thai Limited Company is a business entity where the capital is divided into equal shares, and the liability of shareholders is limited to any unpaid amount on their shares. To qualify as a Thai Limited Company, Thai nationals must hold at least 51% of the shares, ensuring local majority control.
Why Form a Thai Majority Company?
Forming a Thai majority company offers several benefits, including the ability to own land, requiring less registered capital, and involving fewer bureaucratic processes compared to setting up a foreign-owned company. This makes it a more straightforward and cost-effective option for many businesses.
What Are Shareholders’ Voting Rights in a Thai Limited Company?
Shareholders in a Thai Limited Company have voting rights that depend on the type and number of shares they hold. Ordinary shares provide full voting rights and entitlement to dividends, reflecting the holder’s status as a part-owner. Preference shares offer priority in dividend payments and claims on assets upon dissolution, but they come with fixed dividends and limited voting rights. These rights influence company governance and decision-making processes.
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