The most commonly used types of Company registrations in Thailand take on the following forms:

• Thailand Sole Proprietorship

A sole proprietorship is a solo-owned business by a single natural person.Thailand sole proprietorship is restricted to foreign nationals living in Thailand.

• Thailand Partnerships

Thailand partnerships are contracts for an organization of two or more persons engaged in a business venture in which the profits and losses are shared proportionally. There are different types of business partnerships in Thailand. The legal responsibilities attached to the partners vary in the different types of partnerships although the general rules governing all types of Thailand partnerships are similar.

1. Unregistered Ordinary Partnerships

Business partners in an ordinary partnership in Thailand are equally liable for all obligations and debts of the partnership. This type of partnership is not required to register with the Thai Commercial Registration Office (CRD) so that the partnership is taxed at the rate applicable to individual partners.

2. Registered Ordinary Partnerships

A registered ordinary partnership in Thailand is registered with the Thai Commercial Registration Office. This type of partnership is taxed as juristic person. Registered ordinary partnerships are required by Thai law to submit an annual financial report and pay corporate income taxes. However, incomes may also be reported on individual partner’s tax returns.

3. Limited  Partnerships

A limited partnership in Thailand is required to register with the Thai Commercial Registration Office. Limited partnerships are taxed as juristic person and required to submit a financial report every 12 months.  The partners in a limited partnership are classified into two:

General partners– this type of partners in a limited partnership are financers. General partners are liable to the partnerships’ financial obligations and have full authority to manage the business.

Limited partners – a limited partner‘s liability is limited to the amount of money or valuable assets invested in the business.  Limited partners do not have the authority to manage the business.

• Thailand Limited Companies

Limited companies are probably the most commonly used business structure in Thailand particularly for non-Thais.  Limited private companies in Thailand are required to register a Memorandum of Association and Articles of Association. A Thailand limited private company must at least have 3 shareholders. A limited private company with a non-Thai national with more than 49% shares of the company is generally subject to the restrictions of the Foreign Business Act.

Read More:  Company Registration Thailand

Thailand foreign business restrictions

The following data are types of industries restricted to foreign investors to conduct in Thailand as prescribed in the Foreign Business Act:

List 1:  List of businesses that are exclusive to Thai nationals

• Newspaper publication, radio broadcasting and TV station
• Land trading
• Trading and auctioning of Thai antiques or Thai historical objects

List 2:  This list of businesses is grouped into 3 categories and is permitted to foreign investors under special conditions.

Category 1 – Business affecting national safety or security businesses

• Production, selling, repairing of firearms, gun powder and explosives
• Production, selling, repairing of ships, aircrafts or military vehicles
• Domestic land, waterway or air transportation, including domestic airline business.

Category 2- Business affecting arts and cultures, traditional and folk handicrafts

•  Trading of antiques or handicrafts
•  Production of Thai musical instruments
• Production of goldware, silverware, nielloware, bronzeware or lacquerware

Category 3- Business affecting natural resources or environment

• Manufacturing of sugar from sugarcane
• Mining, including stone blasting or crushing
• Wood fabrication for furniture and utensil production.

List 3 – List of prohibited international competitive business which Thai nationals are still unequipped to compete with.

• Production of plywood, veneer board, chipboard or hardboard
• Production of lime
• Engineering service business
• Architecture service business
• Legal and accounting service business
• Tour agency
• Selling food or beverages

Obtaining a Thailand Foreign Business License

Thailand companies with majority of foreign ownership require obtaining a foreign business license from the Foreign Licensing Department of the Ministry of Commerce. The process is often facilitated when Thai BOI approval is obtained. A foreign business license may potentially grant non-Thai nationals 100 % ownership for types of businesses under certain categories of otherwise prohibited businesses. Factors affecting the approval and issuance of a Thai foreign business license may include the impact on Thai employment, transfer of technology, benefits to the public and the ability of Thai nationals to perform the activity, among others. Generally, the application process for a Thailand foreign business license is very lengthy and complex. It may take a minimum of four months for foreign companies to receive a decision on its application.

Thailand law does not use the term “Non-Government Organization” or “NGO”.  Normally, foreign organizations register as either a Foreign Private Organizations or as a locally registered Foundation.

A Foundation is a legal entity registered with the Thai Ministry of Interior for public benefit purposes such as charity, religion, arts, science, literature and education and other activities that may serve the public’s interest.

Read More: Thailand NGO

Additional requirements to obtain a Thailand work permit include:

• The business or the job offer  must not be restricted to Thai nationals
• The job involves work for which Thai nationals are otherwise qualified.
• The business or hiring company must meet capital and employee size requirements.
• Non-Thai nationals or foreign workers must possess the correct category of a valid visa or residence permit.
• Salary offered by hiring companies to foreign workers must meet the minimum salary requirements of the Thai Ministry of Labor.
• The foreigner must be qualified for the work.

A work permit allows non-Thai nationals to lawfully work in Thailand. Working without a work permit in Thailand is illegal and is punishable by imprisonment and monetary fines. The punishment imposed varies based on the category of work that the person engaged in Thailand.

Read More: Thailand Work Permit

The US- Thai Amity Treaty provides US citizens special rights to run businesses in Thailand and also provides Thai citizens special privileges to run businesses in the USA. The treaty allows US citizens in Thailand to hold a majority of shares in companies engaging in certain business enterprises in which majority ownership is generally restricted to Thai citizens under the Foreign Business Act.

Companies with the following requirements may qualify to register under the Treaty of Amity:

• At least 51% of the company shares must be own by American citizens.
• In general, the company directors must be American citizens.

Treaty of Amity business capital requirements:

• Businesses not restricted under the Foreign Business Act must have the capital requirement of 2 million Baht for a Treaty-protected company.
• Businesses that are required to obtain a Foreign Business License under the Foreign Business Act must have the minimum capital requirement of 3 million Baht for each business activity.

The primary benefit of the Amity Treaty to US citizens in Thailand is to manage and own companies in Thailand without needing majority Thai shareholders. In other words, foreigners who are not US citizens would normally require a Thai partner holding 50% or more of the shares in the company to legally conduct business in Thailand.

The Amity Treaty provides Americans an exception to the “Thai partner” requirement that is not available to other nationalities. However, the right is limited and does not apply to all types of business activities.

Thailand BOI Incentives

The Thailand BOI incentives are classified into the following types:

• Tax Incentives

 A BOI promoted company in Thailand may be eligible to receive an exemption or reduction of import taxes duties and may also be eligible to be exempted from a juristic person’s tax and dividends, as well as double deductions from the cost of transportation, electricity, water and project’s infrastructure installation.

• Non-Tax Incentives

Local and foreign businesses certified by the Thai BOI are eligible to hire foreign skilled workers and experts. Further, the BOI provides for express non-immigrant visa and work permit processing through “One-stop Visa”. Non-tax incentives may also permit foreign freehold landownership to businesses involved in industrial related projects.

Setting up a Thai BOI Promoted Company

Investors seeking to do businesses in Thailand may apply for a Thai BOI promotion. The BOI categorizes industries according to types and provides application forms specific to each industry.  Generally, companies that are given priority for Thai BOI licensing are those involved in technology and innovation, manufacturing and export and other investments showing potential business growth.   Non-industrial businesses such as nursing homes for the aged and movie productions are also promoted by the Thai BOI with investment incentives.

Thailand tax

The type of business in Thailand will affect tax rates and tax benefits according to the rules and regulations prescribed in the Thai Revenue Code. Foreign companies in Thailand have special tax requirements.

Thai company

Thai companies are registered under Thai law and are generally taxed 30% of net profit. However, the following types of Thai company are taxed at a lower rate:

• Thai company with less than 5 million baht paid-up capital
• Thai company with Stock Exchange of Thailand (SET) registration
• Thai company recently registered with the Stock Exchange of Thailand (SET) and Market for Alternative Investment (MAI) within 3 years from 6th September B.E.2545
• BangkokInternational Banking Facility and Regional Operating Headquarters
• Association and foundation

Foreign companies operating in Thailand

In general, companies conducting business in Thailand, whether majority Thai owned or foreign owned, are taxed at a rate according to their profit and their registered capital.

Thailand Tax Registration

Foreign companies seeking to set-up a branch or an office to conduct business in Thailand are required by Thai law to apply for tax identification number from the Thai Revenue Department.

Thailand tax Filing and payments

Thai and foreign companies in Thailand are required to comply with the following tax returns and payments procedure two times in a year.

• Submit semi-annual tax return (CIT 51 form) within two months after the end of the first six months. Tax due shall be half of the entire year projection of the company’s annual net profit.
• Submit annual tax returns (CIT 50 form) within 150 days after the closing date of its accounting period.

Thailand accounting standard

Thailand accounting services generally conform to Thai accounting standards and financial reporting standards formulated by the Thai Federation of Accounting Professions (FAP) and the Institute of Certified Accountants and Auditors of Thailand (CAAT) corresponds with international accounting and financial reporting standards.

Companies in Thailand will need to prepare and keep accounts drafted according to the Thai Accounting Standards formulated by the FAP and CAAT:

Accounting:

• Monthly financial reports (Balance Sheet, P&L)
• Withholding tax (PND 3, 53)
• Value added tax (PP 30)
• Withholding tax return (PND 54)
• Mid-year tax return (PND 51)
• Annual tax return (PND 50)
• Annual financial statement submission to the Thai government
• Record accounting transactions
• Supporting schedules for financial statements

Payroll:

• Payment transfers
• Payroll calculations
• Report distribution
• Pay-slip creation
• Banking of employee net salary
• Withholding tax (PND 1)
• Social security (SPS 1-10)
• Withholding Tax Certificate (BIS 50)
• Provident fund
• Payments to government agencies

• Sale
• Hire of property
• Hire-purchase
• Hire of work
• Carriage
• Loan
• Deposits
• Suretyship
• Mortgage
• Pledge
• Warehousing
• Agency
• Brokerage
• Compromise
• Gambling and betting
• Current account
• Insurance
• Bills
• Partnerships and companies
• Associations

Thailand Practice

In normal business law practice in Thailand, contracts require 2 competent witnesses. For acceptance by Thai court,Thailand contracts must either be originally drafted in Thai language or must be translated in Thai language.

In cases where contract disputes arise, contracting parties may resolve it through the court system or alternate dispute resolution such as arbitration. A court complaint is usually preceded by a demand letter or “notice”. Many contracts specify mediation or arbitration prior to or in lieu of filing a case with a Thai court.Thailand has a special court of International Trade and Intellectual Property. Generally, contract disputes in Thailand are in either the international court or provincial court or in arbitration sessions.

Read more on Thailand contracts.

Thailand trademark classification

Thailand does not follow the NICE system of trademark classification.Thailand uses its own system to classify Goods and Services. There are currently 45 different classes of goods in services under Thai classification. A trademark intended for multiple used will require separate registration application for each class.

Thailand trademark registration criteria

Registering a trademark in Thailand  is subject to the following 3 criteria:

1. Trademark must be distinctive

Thai law requires that marks with one or more of the following characteristics shall be deemed distinctive:

• Combination of colors represented in a unique manner, stylized letters, numerals or invented word
• Word or words with no direct reference to the character or quality of the goods and is not a geographical name designate by the Ministerial notification
• Name of juristic person or a name trade represented in a unique manner
• Signature of an applicant for registration or some forerunner in their business or signature of authorized person
• Invented device

2. Trademark must not be prohibited by the Thai Trademark Act

Thai law specifically requires that marks with the following characteristics cannot be registered:

•  Marks identical with a well-known mark or other marks in the market
• State arms or crests, royal seals, official seals, Chakkri emblems, emblems and insignia of the royal orders and decorations, seals of office and seals of ministries, bureaus, departments or provinces
• National flags of Thailand, royal standard flags or official flags, royal names and any representations (names, words, terms or emblems) of the King, Queen or Heir to the throne.
• Marks identical with a medal, diploma or certificates or any other mark awarded at a trade exhibition or competition held by Thai government and its agencies
• Geographical indications protected under the law on geographical indications
• Any mark contrary to public order, public policy or morality

3. Trademark must not be similar to any mark already registered by other traders

To determine if a mark previously registered by another person is similar to the mark seeking to be registered, only marks previously registered in Thailand are relevant. Marks registered in other countries will not be considered unless the mark is deemed popular or generally famous mark.

Thailand trademark search

For many people interested in registering a trademark in Thailand, it may be useful to conduct a trademark search to determine if the trademark or similar trademark had been already registered. Trademark search are conducted at the Thai department of Intellectual Property.

Trademark registration procedure Thailand

Registering a trademark in Thailand will require an applicant or their agent to have a permanent business address in Thailand. Foreign traders may appoint a Thai agent through a power of attorney to register the trademark on their behalf. Trademark registration application must also be completed in Thai language.

Thailand trademark licensing

A valid and enforceable Thailand trademark license agreement is in writing and recorded with the Thai Trademark Office in the Department of Intellectual Property, Ministry of Commerce. The license agreement must be translated inThai.

Thailand trademark validity and renewal

A registered Trademark is valid for ten years from the date of the filing of the Trademark application. Renewal of trademark rights will require an applicant or their agent to file an application within 90 days prior to expiration date.

Read more on Thailand Trademark

Thailand Drug Registration

The Thai FDA requires importers and manufacturers in Thailand to obtain FDA approval prior to importing or manufacturing. The FDA categorizes drugs into modern, general medicines, traditional medicines and veterinary medicines, each having a separate registration requirements.  General medicines are grouped into separate categories of generic medicines, new medicines and new generics.  Each category of medicines has a distinct set of requirements.   The Thai FDA issues drug licenses for indefinite periods of time.

Thailand Medical Devices Registration

Medical devices in Thailand are regulated by a specialized division in the Thai FDA. Medical devices will require either licensing or registration. The Thai FDA groups medical devices into 3 classes’ sub-categories as follows:

Class 1 medical device: condoms, surgical gloves, syringes and diagnostic test kits.

Class 2 medical devices: rehabilitation devices, blood alcohol level measuring kits, silicone implants, and test kits other that for diagnostic purposes. Class 2 requires a USFDA certificate.

Class 3 medical devices:  Lowest-risk devices category.

Thailand Cosmetics Registration

The Thai FDA classifies cosmetics into the following two categories according to the ingredients content of cosmetics:

1. Controlled Cosmetics: controlled ingredients content of a cosmetic product will require product notification to FDA before it is allowed to be out in the market. Notification process is normally completed in 1 day.
2. Specially Controlled Cosmetics: specially controlled ingredients content of a cosmetic product will require registration. Registration process generally takes 30 working days.

Cosmetics containing no controlled or specially controlled ingredients are currently classified as general cosmetics…read complete summary on Thailand FDA Registration