Thai Company Limited
Thai Company Limited
What is a Thai Company Limited?
It is the most common business structure in Thailand, where shareholders have limited liability. This entity is widely used by SMEs and foreign entrepreneurs wishing to establish and operate a business in Thailand on a long-term basis.
Main characteristics
• The capital (10 THB minimum) is divided in equal shares (5 THB minimum) and at least 2 shareholders/promoters. The liability of each shareholder is limited to the amount of the share held.
But if you require a work permit, the minimum of capital should 2,000,000 THB.
• A foreigner can detain a maximum 49% of the company.
There is exception, but it requires a Foreign business license.
• At least 25% of share capital must be paid up when registering the company.
• The usage of a tiered share structure, allow different rights of dividend or vote per category of shares.
The minimum registered capital of 10 THB, divided into equal shares with a minimum value of 5 THB. At incorporation, the company must have at least two shareholders (or promoters), and at least 25% of the registered share capital must be paid up. The liability of each shareholder is limited to the amount of capital they have invested in the company.
It is also required to appoint at least one director, who is responsible for managing its operations and legally representing the company.
If the entity plans to employ a foreign national, a minimum registered capital of 2,000,000 THB per work permit is required, in line with Thai immigration and labour requirements.
Finally, a Thai Company Limited can be structured with different classes of shares, offering flexibility in corporate governance. Voting rights and dividend entitlements can be allocated differently across share categories, allowing shareholders to separate economic ownership from control.
Registration process in Thailand
To register a Company Limited, the incorporation process must be completed with the Department of Business Development (DBD) in Thailand. Once registered, the legal entity becomes responsible for its own debts, contracts, and obligations.
The process typically begins with the reservation of the name, followed by the filing of the Memorandum of Association with the DBD. This document includes key information such as the entity details, registered province, capital structure, and promoters.
Once the Memorandum of Association has been approved, a statutory meeting is held. During this meeting, the shareholders formally adopt the company structure, appoint the board of directors, and, where required, appoint an auditor.
Following the statutory meeting, the directors must submit the application for company registration within three months.
In addition to the incorporation process, several post-registration steps are required. A company subject to corporate income tax must obtain a tax identification number from the Thailand Revenue Department within 60 days of incorporation or the start of business activities. The company may also proceed with opening a corporate bank account once the registration is completed.
Foreign ownership
Foreigners can legally hold shares in a Thai Company Limited, but ownership is generally limited to 49% under the Foreign Business Act.
The remaining 51% must be held by Thai shareholders, unless the company qualifies for specific exemptions (such as BOI promotion or Treaty of Amity for US citizens).
It is important to structure ownership carefully to ensure full compliance with Thai regulations, as improper arrangements may create legal risks.
In certain restricted business activities, a Foreign Business License may be obtained. However, this is subject to strict conditions, including minimum capital and eligibility to specific business categories.
Advantages for this type of Company
Some of the main advantages include:
- Limited liability protection
- Most flexible and commonly used structure
- Suitable for a wide range of business activities
- Credibility with clients, suppliers and financial institutions
- Possibility of long-term business development
Accounting and compliance requirements
A Thai Company Limited is subject to full statutory accounting and tax compliance requirements in Thailand.
This includes monthly bookkeeping, VAT filings (if registered), withholding tax submissions, annual financial statements, and a statutory audit by a licensed Thai auditor.
Taxation of a Thai Company Limited
The Entity is subject to corporate income tax in Thailand. The standard corporate income tax rate is 20% of the profits.
The registration to VAT is mandatory if its annual revenue exceeds the statutory threshold of 1.8 million THB. In addition, withholding tax may apply on certain types of payments, depending on the nature of the transaction.
For a broader overview of the Thai tax system, you can refer to our dedicated Insights section.
Who should use a Thai Company Limited?
This structure is typically suitable for:
- Foreign entrepreneurs starting a business in Thailand
- Consulting and service companies
- Trading companies operating locally
- SMEs with local operations
However, for capital-intensive or strategic industries, BOI promotion may be more appropriate.
Frequently asked questions
How many shareholders are required?
A Thai Company Limited requires a minimum of two shareholders at incorporation, who may be individuals or corporate entities. Shareholding can later be adjusted, subject to compliance with Thai corporate and foreign ownership regulations.
Can I own 100%?
Foreign ownership is limited to 49% under the Thai Foreign Business Act.
However, exceptions exist in specific situations, such as:
- BOI (Board of Investment) promoted companies, depending on the approved activity
- US nationals benefiting from the Treaty of Amity, subject to eligibility conditions
Each structure must be assessed on a case-by-case basis to ensure full legal compliance.
Does a Thai Company Limited need annual accounting filings?
Yes, the Entity is subject to mandatory accounting and tax compliance obligations.
This includes:
- Monthly or periodic tax filings (VAT and withholding tax where applicable)
- Preparation of annual financial statements
- Statutory audit by a licensed Thai auditor
- Annual submission of financial statements to the Department of Business Development (DBD)
Non-compliance may result in penalties or suspension of business activities.
Need support setting up a company in Thailand?
Selecting the appropriate structure is a key strategic decision, particularly regarding ownership, taxation, and regulatory compliance.
Our team supports international businesses in designing and implementing compliant corporate structures in Thailand.