MAJOR TYPES OF LEGAL STRUCTURES

-Partnership

Incorporating a partnership in Thailand involves establishing a legal entity that allows two or more parties to share responsibilities, profits, and liabilities in a business venture. Partnerships in Thailand are regulated by the Civil and Commercial Code, which outlines the types of partnerships, their management, and their legal requirements. Here’s a guide to forming a partnership in Thailand:

A. Unregistered Ordinary Partnership (UOP) This type of partnership is simple to set up and does not require formal registration with the authorities. It is based on a mutual agreement between the partners.

B. Registered Ordinary Partnership (ROP) A registered partnership requires formal registration with the Department of Business Development (DBD) under the Ministry of Commerce.

-Limited Company
Limited Company (Ltd) is the most common form of business entity used by both Thai nationals and foreigners. The process of establishing a limited company involves several steps, including the preparation and submission of key documents such as the memorandum of association and articles of association (by-laws).

Steps to Register a Limited Company in Thailand

Prepare the Memorandum of Association

The company name (which must be approved by the DBD).
-The company’s objectives and activities.
-The total capital and number of shares.
-The address of the registered office.
-Names of the founding members (shareholders).
-The total number of shares and the value per share (e.g., Baht 1 per share).
Submit the Memorandum of Association
-Once the memorandum is prepared, it must be submitted to the DBD for approval.
-Hold a Statutory Meeting
-Register the Company
-Register for VAT (if applicable)-Open a Bank Account – after registering the company, a corporate bank account must be opened in the company’s name.
Most banks will require:

1. A copy of the company’s registration certificate.
2. Identification documents of the company directors and shareholders.

3. Proof of the company’s registered address.

The initial capital (e.g., 25% of the stated capital) is typically deposited into the corporate bank account.

Information used for company formation in Thailand

1. Company’s name in Thai and English languages (the same as the name reserved which is proceeded by one of Promoters / shareholders / director(s))

2. Location of head office (house number, company’s email, company’s telephone number, company’s website (if any))

3. Objectives of the company (Type of business)

4. Registered capital must be divided into each share with the same value (share’s value must be at least 5 Baht)

5. Name, address, age, occupation, telephone number, ID card or other personal documents (in case of foreigner) number and number of shares that persons who start up the company reserve to buy the shares)

6. Name, address, age, telephone number and ID card or other personal documents (in case of foreigner) number of 2 witnesses

7. The stamp duty payable on Memorandum of Association (Baht 200)

8. The stamp duty payable on Company’s Regulation (if any) (Baht 100)

9. Paid-up capital (at least 25% of the share’s value)

10. Name, address, age, nationality, telephone number, ID card or other personal documents (in case of foreigner) number and signature of director(s)

11. The name and/or number of director(s) authorized to sign on behalf of the company

12. Name and license number of Company’s Auditors

13. Name, address, age, occupation, telephone number, ID card or other personal documents (in case of foreigner) number and number of shares holding of shareholders

14. Company’s seal (if any).

Minimum Requirements for a Limited Company in Thailand

-A limited company requires a minimum of two shareholders.

-The company must appoint at least one director (the director can be a foreigner or a Thai national).

Foreign Ownership Rules
Foreigners can set up a limited company in Thailand, but they are typically restricted to 49% ownership of the company’s shares. The remaining 51% must be owned by Thai nationals. However, foreign ownership can be increased under certain conditions, such as:

-BOI (Board of Investment) approval, which can grant the company 100% foreign ownership in specific sectors.

-Treaty of Amity: For U.S. nationals, the Thailand-U.S.
Treaty of Amity may allow full ownership in some business sectors.

– Public Limited Company

The procedure for setting up a public limited company is similar to a limited company. However, it is usually formed in order to list its shares in the Stock Exchange of Thailand (SET).
– Branch Office of a Foreign Company
– Representative Office or Regional Office
– Joint Venture

Foreign-owned Company in Thailand
In Thailand, a Foreign Business License (FBL) is required for foreign nationals or foreign-controlled companies who wish to operate in certain business sectors that are restricted by the Foreign Business Act (FBA). The FBA is a law designed to protect Thai businesses from excessive foreign competition.