Thailand is continuing to be among the best business hubs in Southeast Asia and for this reason, a number of multinational companies have set up or have expanded their operations in the Kingdom with a large percentage of their products are for export i.e. computers and vehicles.
For business entities that are aiming to establish their operations in the country, the following are the basics steps in registering their companies.
Step 1: Reservation of Company Name
The company, through its authorized and appointed promoter, should reserve a company name with the Department of Business Development of the Ministry of Commerce. The promoter should supply the name along with the fully filled-up Name Reservation Form.
When it comes to company names, the company should see to it that the names to be submitted, one of these is the primary choice while the other two are the alternate names, do comply with the standards set by the Thai government as prescribed by the applicable laws.
One of these standards is that the names should not be previously reserved. Also, the names should not violate any ministerial rules among which is any company is barred from adopting the name of the King or the Royal Court as part of its company name.
The process would generally take two (2) or three (3) days to complete and if all of the names are rejected, the promoter will be required to submit another set of three names. If and when a name has been accepted, the approved company name will be reserved for up to 30 days only.
Step 2: Filing of Memorandum of Association (MOA)
The company will then have to submit its Memorandum of Association which contains the reserved company name, the location of operations, the scope of its operations, the capitalization to be registered and the names of the company promoters.
Now, the capitalization must be detailed enough to contain the number of shares and their equivalent par value. Furthermore, the required capital do differ if the company’s operations is specified by the Foreign Business Act or not.
- FBA specified company operations
The minimum registered capitalization is above 25% of the company’s average annual expenses for its first three years of operations and at least 3 million baht (although exceptions do apply) fully paid up capital.
- Non-FBA specified company operations
The minimum registered capitalization is 2 million baht, also fully paid up.
Other minimum registered capital requirements may also apply if the company is going to employ foreign employees.
Step 3: Convene a Statutory Meeting
The company shall then convene a statutory meeting to settle the following:
- Determine and adopting of the company Articles of Association (by laws).
- Making the contracts entered into and the expenses spent by the promoters as official.
- Determining the amount to be paid to the company promoters if there are any.
- Determining the amount of preferred shares to be issued, if there will be, as well as their nature and the extent of their attached preferential rights.
- Determining the amount of shares, preferred or ordinary, and the amount that will be considered as paid.
- The appointment of the company directors, auditors and determining the extent of authority of the directors within the company structure.
It is also during this time in which the company promoters will turn-over the company to the directors.
Step 4: Company Registration Proper
Within three (3) months, starting on the date of the statutory meeting, the company directors will need to submit the application to establish their company. This should be done within the specified period otherwise the previously held statutory meeting will be considered as void.
In this part of the process, the name, license number and the compensation of the company auditor to be hired must be submitted.
The company directors will then order to the promoters and subscribers to pay their shares of not less than 25%.
The registration fee varies as it is at 500 Baht per 100,000 Baht of registered capital. However, the minimum fee is 5,500 Baht and the maximum is 250,000 Baht.
Step 5: Tax Documents Registration
Companies that qualify for income tax should secure their respective Tax IDs and number from the Thai Revenue Department. This should be done within 60 days starting on the date of incorporation or the start of company operations.
Company with turn-overs of more than 1.2 Million Baht should also register for VAT, also with the Revenue Department within 30 days after the annual turnover has surpassed the limit.
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