INVEST IN THAILAND
Thailand is Southeast Asia’s second largest economy with a nominal gross domestic product (GDP) of around USD 500 billion. As a founding member of ASEAN, Thailand has been a major player in contributing to the progress of the organization as well as enhancing its role on the global stage. Thailand is a key driving force in the efforts toward an ASEAN Community by 2015 and will further strengthen regional and sub-regional cooperation in a wide spectrum of issues.
With a free-market economy, the Kingdom has a strong domestic market and a growing middle class, with the private sector being the main engine of growth. The Thai economy is well integrated into the global marketplace, with exports accounting for over 70 percent of the Kingdom’s GDP.
Types of Companies in Thailand
1. Private Limited Company
Private Limited Companies in Thailand have basic characteristics similar to those of Western corporations. A private limited company is formed through a process that leads to the registration of a Memorandum of Association (Articles of Incorporation) and Articles of Association (By-laws) as its constitutive documents.
This business type is for small or medium business, a popular business form with no specific minimum registered capital. At least three shareholders are required at all times for this business form.
2. Public Limited Company
Public Limited Company is for lager business, no specific minimum capital applies for these companies, however, they require at least 15 shareholders and nationality restrictions may apply (more than half of them need to reside in Thailand).
The minimum of two individuals with similar business goals can open this business form and the differences lie in their liability. The types of partnerships are the following:
In an ordinary partnership, all the partners are jointly and wholly liable for all obligations of the partnership. Ordinary partners may contribute money, other property, or labor to the partnership. These partnerships may be registered or unregistered. Therefore, an ordinary partnership can be divided into 2 types:
1) Non-registered Ordinary Partnership – has no status as a juristic person and
is treated, for tax purposes, as an individual.
2) Registered Ordinary Partnership – is registered with the commercial registrar
as a juristic person and is taxed as a corporate entity.
2. Limited Partnerships
The limited partnerships must have 2 kinds of partners as follows:
1) One or more partners whose individual liability is limited to the amount of capital contributed to the partnership, and
2) One or more partners who are jointly and unlimitedly liable for all the obligations of the partnership. The limited partnerships must be registered and are taxed as a corporate entity.
4. Branches of Foreign Companies
Foreign companies may carry out certain business in Thailand through a branch office. Branch offices are required to maintain accounts only relating to the branch in Thailand.
Having a branch office in Thailand, the foreign corporation could be exposed to civil, criminal and tax liability if the branch office violates any law in Thailand. The foreign head office must appoint at least one branch office manager to be in charge of operations in Thailand.
5. Representative Offices of Foreign Companies
The representative office is another manner in which a foreign company can present on the market, however, it cannot engage in commercial activities, only promotional ones.
6. Joint Venture
A joint venture is an agreement between two or more parties, which are companies, come together for the same business purpose. The partnership may be formed by two companies merging or by two companies coordinating the business activities in a joint manner. It has not yet been recognized as a legal entity under the Civil and Commercial Code. However, income from a joint venture is subject to corporate taxation under the Revenue Code, which classifies it as a single entity.
Procedures to legally start and formally operate a company as follows:
• Preregistration (for example, name verification or reservation, notarization)
• Registration in the economy’s largest business city
• Post registration (for example, social security registration, company seal)
• Obtaining approval from spouse to start a business or to leave the home to register the company
• Obtaining any gender specific document for company registration and operation or national identification card