LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.

Company Registration in Thailand |

Overview of Company Registration in Thailand

Thailand borders Malaysia, Cambodia, Laos, Myanmar, and Malaysia. It’s easy to conduct business in Thailand. To conduct business in Thailand, it is necessary to adhere to local legal restrictions. One of Asia’s major tourism centres is Thailand. Each year, Thailand welcomes more than 20 million foreign visitors. Thailand’s major tourist hubs include Bangkok, Krabi, and Phuket. The process of registering a corporation in Thailand is very simple because it is possible to do so even if the investor is not present. There are numerous advantages for manufacturers who locate their operations in Thailand, including zero VAT on the export of all goods, zero product-related customs duties, and low rental fees

Overview

Foreign investment has been made more open by the government in industries like paper, chemicals, electronics, and other goods. More advantages, including exemptions from corporation taxes and the ability to own land in Thailand, are attracted by this investment strategy that has been liberalized. Products produced by manufacturing companies that export them are often exempt from import duties. It is advantageous for an investor to register a company in Thailand for all the reasons listed above.

Thailand's Regulatory Body for Company Registration

The Department of Business Development, which is part of the Ministry of Commerce, is responsible for managing company registration in Thailand. The Civil and Commercial Code of Thailand is followed while registering a company in Thailand.

Benefits of Thai Company Registration

Tourism Industry- Thailand is one of Asia's major tourist destinations. Thailand welcomes more than 20 million foreign visitors each year. Thailand's major tourist hubs include Bangkok, Krabi, and Phuket. Many investors are drawn to Thailand's various tourism spots.
Economy- Thailand's GDP is flourishing and rising steadily. With a population of more than 70 million and a projected GDP of USD 525 billion in 2020, Thailand has the largest consumer market. This nation is ranked 40th out of the developed consumer markets by the World Economic Forum.
Hub for Manufacturing- One of the world's biggest centers for manufacturing is Thailand. A variety of advantages are available to manufacturers, including export incentives and import subsidies. Apart The Thai government benefits from this by providing advantages for foreign investment. For a variety of industries, the government has lax foreign investment policies.
Low-cost labour- Thailand has inexpensive labour. Thailand has cheaper labour costs on average than the majority of South East Asian nations. The government recently reduced the average wage for labourers. Pay for labourers must range from THB 313 to 336.

Companies available for business in Thailand

Equal possibilities are provided for both local residents and foreign investors to establish their businesses in Thailand. The many business vehicles that one can use to establish their business companies in Thailand are as follows-
Thai Limited Company
It is the most common type of Due to its adaptability, business vehicles are popular among foreigners conducting or wishing to conduct business in Thailand. The structure of a Thai Limited Company is comparable to that of an American Limited Liability Company and a Thai Private Limited Company.
Three shareholders and one director are required for a Thai limited company. A minimum of three individuals must sign a memorandum of association in accordance with section 1097 of the Thai Civil and Commercial Code. The management of the corporation is the responsibility of the board of directors, and the shareholders have only a small amount of direct influence over its operations. In Thailand, there are two divisions of business registration-
Thai Limited Company (Majority Thai)- Thai citizens must possess a minimum of 51% of the business's shares to be considered a Thai Majority held limited company. There is no necessity to get a foreign business license because Thai nationals own the majority of the company's shares (FBL). In comparison to Foreign-Owned Limited Companies, these businesses do not encounter as many constraints when operating.

Thai Limited Company (Foreign Owned)- A Thai Limited Company with foreign majority ownership is one in which foreigners possess more than 49% of the business. The Foreign Business Act governs all commercial ventures and operations involving foreign nationals. Before starting their company operations in Thailand, those limited firms with foreign ownership are required to get a Foreign Business License.
Organizations Licensed by the Thai Government in accordance with the Amity Treaty between the United States and Thailand
The US-Thai Treaty of Amity, which was signed between the two countries, grants US corporations and investors significant commercial advantages to conduct business in Thailand. The two important trade advantages that this agreement offers to investors based in the US are as follows-
US citizens have the same privileges as Thai citizens and are exempt from the majority of the foreign investment restrictions imposed by the Foreign Business Act of 1999.

This allows US citizens to hold a majority or all of the shares of a Thai limited company or open a representative office or branch office in Thailand without the need to apply for an s. 17 Foreign Business License.

Thailand's Board of Investment (BOI)
A Board of Investment, often known as BOI Thailand, offers financial incentives to both foreign and domestic businesspeople who wish to invest in the industries that the agency promotes. The requirements for projects requesting for incentives and privileges have been established by BOI Thailand. Your company needs to fit into one of the categories the Board has established in order to be eligible for BOI promotion.
Branch Office
In Thailand, a branch office has a similar legal structure to a business limited. In Thailand, a branch office has been given permission to generate income similarly to a business limited. The regulations that apply to the foreign-held business limited also apply to these offices. The amount of liability borned is the criteria which differs the two structures. Since the branch office is essentially an extension of the foreign head office, any liability resulting from that office's activities likewise applies to that office. On the other hand, the scope of liability for a foreign-owned limited company registered in Thailand is restricted to its deeds.
Regional Office
Like Representative Offices, Regional Offices in Thailand are not allowed to conduct any commercial activity there. They are not permitted to work for pay. These business entities must rigorously adhere to regulations that limit what they can do on behalf of the statute-designated overseas head office. Only the following tasks have been delegated to regional offices in Thailand-
Management and Consulting Services

Financial management services

Training and personnel development

Services in research and development

Produce development

Marketing controls and sales promotion and planning

Communication, coordination, and directing on behalf of the operations of the head office, the operation of branches and affiliated in the region.
Representative Office
In Thailand, a representative office is a business that has been established solely to support the head office. Its activities include gathering data on raw material suppliers, conducting market research and reporting findings to the head office, and informing the head office of new goods and services that are available on the Thai market. The organization must carry out any one of the following non-trading activities before setting up a representative office in Thailand:
Searching for and obtaining information on the source of goods, services, or raw materials in Thailand for the overseas head office.

Reporting to the headquarters on Thailand's economic development

Examining and confirming the quantity and calibre of the products the head office requested

Relaying information and updates regarding new products, formula/version improvements, upgrades, and services offered by its head office or its affiliated companies in Thailand to the foreign head office and affiliated companies.

Provide guidance to the head office or its connected businesses regarding the products that the head office offers to the local distributors and customers, under the condition that the product has already been distributed in Thailand.
Thai Partnership
The Thailand Civil and Commercial Code states that Ordinary partnerships and Limited Thai Partnerships are the two types of partnerships that exist. Section 1025 of the Code contains a definition of ordinary partnerships. Ordinary partnerships are those in which all partners are jointly and severally liable for all partnership debts, according to this definition. Limited Thai partnerships, on the other hand, are discussed in section 1077 of the Code. In order to qualify as a limited partnership, a partnership must have both (1) one or more partners whose liability is limited to the amount they have agreed to contribute and (2) one or more partners who are jointly and severally liable for the partnership's debts.

Eligibility requirements for Thai company registration

The following requirements must be met by any Limited Company that want to register with the Department of Business Development in Thailand-

Minimum 1 Director- The Civil and Commercial Code stipulates that there must be a minimum of three natural individuals acting as the promoters (original shareholders) at the moment of the company's incorporation and during its existence. Promoters of Thai Limited Company are not all eligible to apply. The promoter must be at least 21 years old and be able to legally represent the business. Typically, the promoters split an equal number of shares at the time of the company's establishment, and the shares are only handed to others after the firm has been registered.
Head Office Requirements- A limited corporation is required to have its head office only in Thailand. The business must acquire a copy of the house registration number and a letter of approval from the office's landlord.
Minimum registered capital- According to the regulations of the Foreign Business Act, a limited company must be incorporated in Thailand with a minimum registered capitalization of THB 3 million for operating in prohibited companies and THB 2 million for foreign enterprises operating in non-restricted industries. Such demands are not made of Thai nationals or local businesses. However, in order to support a work visa for a foreign worker, such businesses must fulfil specific financial conditions.
Memorandum of Association - Along with the registration application, a memorandum of association must be completed and filed.
Statutory meeting- In Thailand, a statutory meeting must be called in advance of a company's registration.
Letter of Certification - If there are foreign shareholders among the Thai shareholders, it is also necessary to get a Letter of Certification from the bank certifying that there are sufficient cash in their personal bank accounts.
By the shareholders' signatures- In Thailand, it is a requirement that each shareholder, initial promoter, and director sign a portion of the application documents.

Thailand's Company Registration Process

It is possible to incorporate a business in Thailand by completing the steps below-
Process of reserving and registering the Name of the Firm
In order to reserve the name of the company, the applicant must first submit an application to the Department of Business Development (DBD). It typically takes 1-3 days to reserve a name for a business. The applicant must meet the criteria for naming the business. For instance, the company's name must be distinct and contain the phrase "limited."

To be taken into consideration by the department for the company name, the applicant must submit a minimum of three choices. Priority must be given to the names of the company. In Thai, the company's name would be registered. However, it would be advantageous if the candidate selects simple names in order to ease pronunciation. A thirty-day window would be allowed for the reserved name to be used. Once a company's name has been reserved, it must be used in all documents pertaining to the company's incorporation for registration.
Filing Charter Documents
The applicant for business registration in Thailand must file the charter documents after completing the name reservation. All of the company's shares must be paid for at this point. A prime example of such a document is the memorandum of association (MOA). When submitting the MOA, the aforementioned information must be included-

Name and Purpose

Address of the company's registered office

Declaration of the minimum capital and liability of the company

Names and other details about the firm's shareholders and directors.

After the the applicant must complete the aforementioned procedure and submit the required paperwork to the DBD. The applicant must additionally pay the necessary amount for filing the memorandum in order to register a company in Thailand. The following are the fees-

If the registered authorised capital is THB 100,000, the price is THB 50. The applicant's fee must meet the standards of the relevant body.

The company needs the cabinet's clearance before it may conduct business abroad.
Organize a statutory meeting
The statutory meeting has to be held as the next action. This meeting is held to submit the company's bylaws, and it is also when the company's articles of incorporation are drafted. Moreover, any type of contract which the firm has entered into is approved, and the capitalization rate for the company is set. The company's directors and auditors are chosen during this meeting. This type of meeting is typically held as a formality prior to registering a corporation in Thailand.
Company Registration
The application for company registration in Thailand may be submitted to the DBD when the MOA has been submitted and the statutory meeting has been called. The DBD must receive this application no later than 90 days following the statutory meeting. The application must include all relevant firm information. The fact that the shareholders have paid their subscription money must likewise be mentioned and acknowledged by the directors. The cost of registration is THB 5,500 for each THB 1,000,000 in required capital.
Register for Taxes
Following the company's registration, the applicant must register for corporation tax and VAT. Following the date the firm was registered, this must be done within 60 days. A corporation tax ID would be issued by the revenue department. The identical documents must be presented to Bangkok's Revenue Department's Central Filing Office.

If the company's annual revenue exceeds THB 1.8 Million and it is subject to special business tax, it must register for VAT. If the turnover surpasses certain thresholds, registration with the VAT authorities must be done within 30 days.
Establishing a Corporate Bank Account
After registering with the Department of The business can move on with creating a corporate bank account at any one of the reputable commercial banks in Thailand after completing business development and acquiring the Business Registration Certificate and Company Affidavit.
Registration with Social Security
If a business hires any workers, it must register with the Social Security Administration. Within 30 days of the day the first employee was hired, this registration must be completed.

Rate of Corporate Tax in Thailand

Corporate income tax is imposed on all businesses that have been incorporated in Thailand on their international profits. A foreign-incorporated corporation must pay corporate income tax on any earnings it makes from or as a result of conducting business in Thailand. Thailand has a 20% corporate income tax rate.
Final withholding tax is applied on certain types of assessable income, such as dividends, royalties, interests, rents, and service fees, received to or from a firm that is not established in Thailand and does not conduct any business there. With the exception of dividends, which are taxed at a rate of 10%, the applicable tax rate is 15%. Additional rules are in effect according to any applicable double taxation agreements.
However, organizations and legal partnerships whose paid-up share capital at the end of the accounting year does not exceed THB 5 million and whose income from the sale of products or the provision of services does not exceed THB 30 million are exempt. are subject to the corporate income tax rates listed below in Thailand:

Net Profit (THB) Tax Rate (%)

0 – 3,00,000 0

300,001 - 3,000,000 15

3+ million 20

Net Profit (THB)	Tax Rate (%)
0 – 3,00,000	0
300,001 - 3,000,000	15
3+ million	20

Documents needed for Thai Company Registration

For the incorporation of a Company Limited in Thailand, the following papers must be presented, along with the registration form and the supplied information, to the Department of Business Development-

Name of the company (the name that one of the promoters, shareholders, or directors has reserved)
Location of the company's headquarters (along with any further information like the address, phone number, email address, and website, if applicable)
Each share of the registered capital should have the same worth (the share price should be a minimum of 5 Baht)
The company's goal (the type of commercial activity it engages in)
Name, address, profession, age, identification card, phone number, and other personal information (in case of a foreign investor) number and quantity of shares that individuals launching a company reserve to purchase the shares
Name, address, profession, age, identification card, phone number, and other personal information (in case of a foreign investor) the two witnesses' total number
100 Baht in stamp duty must be paid on any company regulations
The Memorandum of Association's required stamp payment (200 Baht)
Paid-up capital (at least 25% of the value of each share)
Name, address, profession, age, ID card, phone number, and further personal documents (In the instance of a foreign investor) Director names and signatures
The company's auditors' name and license number are the names and phone numbers of the directors who are authorized to sign on the company's behalf
Name, address, job title, age, ID card, contact information, and other personal records (in case of a foreign investor) how many shares each shareholder owns in total.
The corporate seal

FAQs

Concept of LLP

LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.

Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.

Structure of LLP

LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.

Advantages of LLP

LLP form is a form of business model which:

(i) is organized and operates on the basis of an agreement.

(ii) provides flexibility without imposing detailed legal and procedural requirements

(iii) enables professional/technical expertise and initiative to combine with financial risk-taking capacity in an innovative and efficient manner

Other Countries where this form is available

The LLP structure is available in countries like United Kingdom, United States of America, various Gulf countries, Australia and Singapore. On the advice of experts who have studied LLP legislations in various countries, the LLP Act is broadly based on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs in a body corporate form i.e. as a separate legal entity, separate from its partners/members.

Difference between LLP & ‘Traditional Partnership’

Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.
Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct

Difference between LLP & Company

A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a contractual agreement between partners.
The management-ownership divide inherent in a company is not there in a limited liability partnership.
LLP will have more flexibility as compared to a company.
LLP will have lesser compliance requirements as compared to a company.

Our Blog

Overview Thailand’s Regulatory Body for Company Registration Benefits of Thai Company Registration Companies available for business in Thailand Eligibility requirements for Thai company registration Thailand’s Company Registration Process Rate of Corporate Tax in Thailand Documents needed for Thai Company Registration FAQs Blog