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.
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.