Corporate Status

A Thai limited company has a juristic or corporate status distinct from its director or shareholder. A Thai limited company may enjoy all rights and vice versa be subject to all duties legally and naturally applicable to a juristic person.

Shares and Shareholders

A Thai private limited company is established with capital being divided into equal shares. The liabilities of every shareholder shall be limited to the amount unpaid on the shares held by each of them.

There must be at least seven shareholders that can be either individual or juristic person (corporate). There is no requirement to spread the shares among shareholders. That is to say, one shareholder can hold 99.99% while others may hold only one share each.

Most of private companies have par value of 100 baht.

Shares can be one kind, which are all ordinary shares or dividend into ordinary and preference shares or into different classes.

Foreign Business Restriction

The Foreign Business Act 1999 requires a Thai limited company to have a Thai majority shareholding structure, which is at least 51%. The limited company having foreign shareholding structure either shares or shareholders more than 49% will be deemed foreign juristic person and subject to restrictions under the Foreign Business Act 1999.

Thai Company under the Land Code

As a current practice of the Land Department, the limited company registering ownership of land must have the majority Thai shareholders holding shares of at least 70%. If the registrar be in doubt that Thai shareholders are only nominees of foreigners, the investigation can be made to verify the status of all Thai shareholders. However, up until now, we may register the ownership of land for the company with only 51% Thai.

Thai-US Treaty of Amity and Economic Relations

However, US nationals may invoke The Thai-US Treaty of Amity and Economic Relations to be exempted from The Foreign Business Law.


All policies of the limited company will be controlled by the resolutions of the general meetings of shareholders. If it is not otherwise provided in the Articles of Incorporation, a resolution will be passed by a majority vote, which is 51%.

Special Resolution

Some important matters require a special resolution, which must be passed by passed by two consecutive general meetings of shareholders with the majority vote of at least 75%.

The important matters are :-

Change or amendment of the Memorandum of Association,

Increase or Decrease of Capital,

Dissolution or Merger and Acquisition etc.

Articles of  Incorporation

The limited company may use the standard Articles of Incorporation provided by the Ministry of Commerce or exclusively designed for the specific purposes, e. g, protection of minor shareholders or prevention of transfer of shares to a third party without acknowledgement of other existing shareholders.

Board of Directors

The board of directors will carry on the business of the company in accordance with the policies set forth by the general meetings of shareholders. The director can be either a shareholder or non-shareholder. The authorized director will be the person who acts on behalf of the company.

The director will not be personally liable for all affairs performed within the scope of activities provided in the corporate objectives or articles of incorporation.

Minimum Registered Capital

There is no requirement to have a minimum registered capital. However, if the limited company wants to apply for a work permit for its expatriate director or staff, it must have capital of at least Baht  2,000,000.- fully paid up for one foreigner.

The paid up capital must be at least 25%.

Corporate Income Tax

The limited company is subject to the Corporate Income Tax, which is 30% from the net profits. The net profit is derived from the gross income deducted by allowable expenses.

The limited company may register the Value Added Tax (VAT) with the Revenue Department with the rate of 7%. However, if the income is up to 1,200,000 baht per year, the Company is required to register VAT.

Accounting Period

The multinational company may fix the accounting period to be coincident with the head office. Normally, it will be January 1 to December 31. The first accounting period can be less than 12 months.

Annual Financial Statements

Within 150 days from the end of each accounting period, the limited company has to file the audited financial statements, balance sheet and income statement with the Ministry of Commerce, and also the following monthly and annual tax returns with the Revenue Department.

Monthly Tax Returns

Monthly Value Added Tax Returns
(Phor. Phor. 30)

Monthly Withholding Tax Returns on Salaries

(Phor. Ngor. Dor 1)

Monthly Withholding Tax Returns on payments for services

or advertising, etc. (Phor.Ngor. Dor 3 and 53)

Annual Tax Returns

Mid-Year (interim) Corporate Income Tax Returns

(Phor.Ngor.Dor 51).

Annual Corporate Income Tax Returns

(Phor.Ngor.Dor. 50).

Annual Personal Income Tax Returns

(Phor.Ngor.Dor. 90 and 91).

Annual Withholding Tax Returns on salaries

(Phor.Ngor.Dor. 1 Kor).

Social Security

Monthly remittance 4% contributed by the Company and 4% deducted from the Employee’fs salary

Company Registration

1)                  First, an applicant must check with the Commercial Registration Office to see whether similar name has been registered, the applicant should reserve the intended name of the company straight away in order to prevent other applicants from using it. The name reservation can be made by internet.

After the name has been reserved, application for registration of the Memorandum of Association must be filed within 60 days.

2)                  After the applications have been completed, they must be submitted to the Registrar for examination. If no correction to the application required the Registrar shall order the applicant to make payment of a fee and the registration is thereby completed.

3)                  The above procedure would take 2 weeks to complete, provided the supplement of the required documents.

Registration Process

In establishing a limited company, the following steps must be taken:-

1)                  There must be at least seven promoters who will jointly make and sign a Memorandum of Association and bring it for registration.

2)                  After registration of the Memorandum of Association, the promoters must arrange for subscription of all the shares of the Company to be established.

3)                  Hold a statutory meeting. For which a notice summoning the meeting must be sent to the subscription of all the shares at least 7 days before the date of the meeting.

4)                  After the statutory meeting at which the company’fs director(s) are appointed, the promoters must hand over the business to the company’fs director(s) for further proceeding.

5)                  The company’fs director(s) shall demand from the promoters and the subscribers of the share payment of it least 25% of each share’fs par value. The company’fs capital can be divided into any number of shares but the par value of shares must not be less than 5 Baht.

6)                  After the subscription payment has been made, the director(s) must register the company within 3 months after the statutory meeting.

Professional & Registration Fees

The government fees of  5,500.- baht for the registered capital of each one million.