business registration

Advantages and How To Setup Limited Company in Thailand

Thailand, like any other countries within the Southeast Asian region, encourages overseas investors to their country to enhance their economic activities. And unlike other countries within the area, Thailand happens to have the proper circumstances, conditions and enticements to lure foreign investment into the country. And for you to facilitate the influx of foreign companies to Thailand, several systems were set up from which foreign investors can pick after they want to set up a corporation inside the country.

Private limited company

one of the most often used legal entities in Thailand is the private limited company, which has the same features and functions as the limited liability company (LLC) in the country. In Thailand, a private limited company is used as a way to operate enterprise in accordance with the business and investment laws of Thailand. it’s far required that 51% of a organisation’s stocks have to be held through Thai nationals. The last 49% can be held by using anyone which include foreign investors.

Advantages of private limited corporation

the biggest benefit of establishing  a private limited company is the fact that legally, it is a stand-alone company under Thai law. And for foreign investors who need to govern the ownership of the corporation, the 49% limit can be exceeded or exempted, if the corporation is granted a foreign business License, which means the business have to be particular and need to not compete with neighborhood Thai businesses.

Setting Up

To set this type of business structure, at least three individual promoters (shareholders) is required, and at least one director is elected to manage the business or the organization. The business registration process includes:

• Reservation of name. this is done via filing a signed name Reservation form to the department of business development of the Ministry of commerce (MOC). The form need to include the preferred names along with the alternative names which may be taken into consideration if the primary names have already been used by different entities.

• Submit Memorandum of association or MOA. This should include the name of the company, the province where the company will function, scope of organization’s business, capital (including the number of shares and their par value) to be registered, and the names of all of the promoters.

• Calling of Statutory meeting. once the share structure is decided, a statutory meeting is called to facilitate:

• Adoption of Articles of association (by-laws). A Thai lawyer can help out in preparing the Articles of association.

• Ratification of any contract entered into which include expenses incurred with the aid of the promoters in promoting the organization

• fixing the amount of remuneration, to be paid to the promoters

• fixing the number of preferred stocks to be issued and the nature and volume of the preferential rights accruing to them

• fixing the number of ordinary shares or preferred shares to be allotted as fully or partly paid-up

• Appointment of the initial directors and auditors and determining the respective powers of the directors

• Registration of company. inside three months from the date of the statutory meeting, the directors should publish the application to check in the company. Failure to register inside the specified period, the company statutory meeting shall be nullified and void. when this takes place, a meeting for persons who reserve will be arranged so they can buy the stocks again.

• Tax documents Registration. businesses that are liable for income tax need to register and obtain a tax identification card and number from the revenue department within 2 months of the incorporation date or at the start of the operations.

Workers Rights in Thailand

As in any country worldwide international, the government of Thailand has established terms and conditions protecting the interests of both the company and the employee. Thailand’s labor protection Act 2541 (1998) of the department of labor protection and Welfare defines the rights of employees and the responsibilities of employers. underneath the provisions of the Act 2541, all employers need to outline the terms of employment for their workforce. Employers with 10 or more regular personnel are required by way of law to specify working guidelines and policies – a copy of which must be submitted to the department of labor protection and Welfare and published at the work premises.

The following rights of personnel are defined in the labor protection Act 2541 which can be normally violated by employers:

Regular working hours

Employers that require their personnel to work for more than eight hours a day or exceeding forty eight hours per week are violating the terms beneath the labor protection Act 2541.

Breaks during regular work hours

Any employer that does not offer relaxation duration of not less than one hour a day after working 5 hours violates the provision concerning required rest period to be given by means of employers to their employees.

Weekly holidays

An organization violates the worker’s rights if he:

• Does not allow an worker to have at least one day off per week as a weekly holiday or the rest day is given after 7 days of continuous operation.

• Does not consist of the weekly holiday within the basic pay of the regular personnel.

National Holidays

Employers violate the provisions of the employee’s rights in the event that they don’t provide their personnel with thirteen national holidays including national labor day. If a holiday falls on a weekly holiday, the worker will be given a further holiday on the subsequent working day. The employers have to pay the personnel their fundamental pay on national holidays.

Annual leave

If an organization has an employee that has worked for one full year continuously, the worker is entitled to an annual vacation of not less than six working days. employees operating for less than 365 days could be entitled to an annual vacation on pro-rata basis. Failure to provide this can be in violation of the worker’s rights.

Basic Pay

An employee is entitled to get his basic pay not lower than minimum rate of basic pay as mandated by using the government. If employees are paid lower than minimum rate of basic pay, the employers are in violation of the basic pay rights of the employees.

Overtime Pay, Holiday Pay and Holiday Overtime Pay

An organization may also require an employee to work extra time or on holidays as necessary to the continuous overall performance of work but must be pay overtime rate. by law, employers may also require an employee to work on holiday if business is that of a hotel, theater, transport, restaurant, café, club, society, medical establishment or such other companies as prescribed by the Ministerial regulations with consent of the worker for each instance.

Employers that require employees to work beyond regular time on a working day and do not pay time beyond regulation at the rate of no longer less than one and a half times the rate of the hourly basic pay earned in normal working hours for the extra time hours worked, or no longer much less than one and half times the rate for each unit of output on a working day for employees who receive basic pay upon output. If the overtime coincides with a holiday, the corporation shall pay holiday overtime pay on vacations to the worker of not less than treble basic pay rate earned according to hour or per unit of output on a ordinary working day.