In September 2022, Thailand launched a new 10-year visa, known as a Long Term Resident Visa (LTRV), designed to attract high potential foreigners who would like to relocate to Thailand long-term.
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After three years of delays due to COVID-19 pandemic, Thailand’s first law on personal data protection (PDPA) officially entered into force on June 1, 2022.
The PDPA (Personal Data Protection Act) aims to regulate how personal datas are collected, used, disclosed, transfers, and provides a safeguard against abuses of the right to privacy of a date subject.
Your company is growing and you want to hire a new Thai employee? The problem is that you don’t understand how you should pay him/her, nor what you should pay as social contributions? We give you all the answers in this article.
Thailand is one of the fastest-growing economies in Southeast Asia being the second-largest business to consumer e-commerce market in the region after Indonesia (Economic Research, J.P. Morgan Chase Bank).
Thanks to its strategic location, stable economy, business-friendly environment and cost-effective labor, Thailand offers foreign investors a lot of benefits to make it one of the region’s most attractive to establish a business and make important connections (read our article).
Thailand has been a cash-driven society for many years. But over the past 8 years the payment systems landscape has changed massively and presented consumers with a number of alternative ways to pay for goods and services.
According to the Law on Foreign Trade in Thailand, certain types of activities are reserved only for Thai citizens. As a result, foreign entities or firms who wish to do business in Thailand in one of the prohibited classes of business, have to obtain a foreign business license. “The Foreign Business Act (FBA), B.E. 2542 (1999) is enacted to govern business operations and activities involving foreign nationals and entities”.
The Thai government has approved measures to encourage investment in special economic zones (SEZs). The purposes for developing the SEZs include the acceleration of border trade, increasing border security, promoting the greater distribution of income, and enhancing Thailand’s competitiveness in the ASEAN Economic Community.
In 2021, Thailand is the world’s 53rd-largest country by area, 20th-largest by population, and the 28th-largest in the world by economic size. With a newly industrialized emerging market economy, international investors know the country for its robust growth rates that are being driven by a rapidly expanding population and growing exports around the world.
Thailand is the second-largest economy in Southeast Asia after Indonesia, and recognized by the World Bank as “one of the great development success stories” in social and development indicators.
Thinking of starting a business in Thailand, but not sure where to start? GORIOUX SIAM has got you covered. With the right guide and infos, it can be a lucrative and enjoyable process. There’s an abundance of opportunity in the industrial and service sectors and in import and export in general.
- THE DIFFERENT TYPES OF ENTITIES
- SET UP YOUR BUSINESS
- RUN YOUR BUSINESS
- THE DIFFERENT TYPES OF ENTITIES
You can set up your business in a number of ways. If you have an international business, you may wish to set up a Thai branch office, Thai representative office or Thai regional office to take advantage of local business opportunities and possible tax advantages.
There are several ways for foreigners to set up a company in Thailand, the most popular being the Thai limited company, which is likely to be your choice too, since it gives you the advantages of being able to operate in a category that is normally reserved for Thais, requires lower registered capital, and gives you the option to buy land.
Thai laws allow four types to suit your goal.. The types are:
The most popular choice among foreign investors. Shareholders can own only a limited amount of unpaid shares. Thai laws require them to divide their capital into shares. At least three promoters / shareholders must register the company. It must include director(s), an auditor. Every promoter will receive at least one share. The first payment of the shares cannot be less than 25% of the nominal amount.
Foreign investors may be drawn to this type of incorporation, but the laws of Thailand limit their ownership to 49%. Fifty-one percent goes to the nationals. The company directors may apply for work permits to foreign employees.
Board of Investment Promotions
Foreign entrepreneurs who want full ownership of their business can realize this by being part of the Thailand Board of Investment. This Board promotes select foreign companies, which assist with the grant of visas and work permits. These companies are also exempt from corporate taxes. But the Board is guided by strict criteria in choosing which foreign enterprises to promote.
Foreign companies must apply for BOI promotion. If you are thinking of applying, be aware that it will take one to two months of going back and forth to the BOI for the lengthy process. When you are fortunate to be selected, you will be required to submit a regular status report to the Board in order to retain your status. It will also be to your benefit to secure the help of a corporate lawyer or an accounting firm for the purpose.
This type is owned and registered by and in the name of a single individual. He or she functions also as the operator. A foreigner may find difficulty incorporating this type if his business does not qualify.
The Thai Civil and Commercial Code provides for these three types of partnership:
Unregistered Ordinary Partnership – The partners share equal obligations and liabilities for any unfavorable eventuality. Furthermore, this type does not possess legal status as yet.
Registered Ordinary Partnership – This type must be registered with the appropriate authority. It possesses a legal status and legal rights, responsibilities and liabilities independent of its partners.
Limited Partnership – Two types of partners come under this subtype, namely, unlimited liability partner and limited liability partner. The unlimited liability partner has full and indefinite accountability regardless of the amount of his partners’ contributions. In comparison, the limited liability partnership’s accountability is fixed at the amount of his partners’ contributions.
Registering partnerships may be easier than registering other company structures, but these three types of partnership cannot apply for work permits. Neither they can use the company name in opening bank accounts.
GORIOUX SIAM is happy to help us, you can contact us for more informations and a personalized recommendation.
- SET UP YOUR BUSINESS
This may be the hardest step, as you must deal with the legal requirements and situations involved in putting up your business. You need patience and organization. We, at GORIOUX SIAM, can also help you for a hassle free experience.
You should first book your company name to make sure that it has no duplicate in Thailand. Prepare all registration documents, which include a list of the names of shareholders, minutes of your meetings, and proof of payment of share capital. When all done, you can register your company at DBD according to its procedure. The forms you have to fill up are in the Thai language, so it is an advantage if you can read and write in Thai. Otherwise, you may seek the help of a Thai lawyer or a suitable professional like us 😉
You will then need to register for VAT and obtain licenses applicable to your business line.
These licenses depend on your company type and size. Applying for VAT is required when your company earns more than 1.8 million baht as annual revenue. You need to apply for it at your nearest Revenue Department. (Discuss your VAT situation with professional, as it might be better to register right away).
Then, you have to look for an Appropriate Office Space. You may choose between a serviced office space and a traditional office space. A service office space may be better if you wish to do away with the cumbersome details of setting up your own office space.
Obtaining Visas and Work Permits is the next step of the process. This is another troublesome task in the process of starting a foreign business and hiring foreign employees. Again, it is an advantage to hire or manage with a business specialist like us in this field to make things right and easy for you and your business.
The last step, to complete your business registration process, is to open your Company Bank Account. This can be done when your company has been registered. Choose the bank that responds to your needs and preferences. You may need someone or your accounting firm who can recommend a suitable bank and prepare the legal documents and forms to perform this task.
Eventually, you’re done ! The whole process takes approximately one to two months.
- RUN YOUR BUSINESS
To properly run your business, the next step would be to follow thai rules and regulations and to pay your taxes !
Here is an overview :
According to the Revenue Department, companies are required to pay Corporate Income Tax (CIT) and must file their tax returns (Form CIT 50) within 150 days from the closing date of their accounting periods. There are several types of deductible expenses. The CIT in Thailand is 20% on net profit, and may vary depending on the type of taxpayer.
CIT is not the only cost you will have : VAT, Witholding Tax, Social security and health insurance are costs that you have to carefully calculate when running your business.
GORIOUX SIAM can handle the whole process for you, in compliance with the legal requirements. We’ll make sure that you’re in full ownership and control of your business, and we can complete the process in a a short period of time, so that you’re ready to start making money fast.
We are available anytime to answer your questions !
Contact us now: + (66) 2-258-2638 / firstname.lastname@example.org