Legal Forms of Business in Thailand

In Thailand, various legal forms for businesses can be established, each with its own characteristics, benefits, and limitations. Based on the Civil and Commercial Code of Thailand and the Public Limited companies Act, the primary legal forms for companies include:

Sole Proprietorship: A business owned and operated by a single individual.

• Characteristics: The simplest form of business ownership, with the owner having full control and responsibility.
• Benefits: Easy and inexpensive to establish and operate.
• Limitations: The owner bears unlimited personal liability for business debts and obligations.
• Applicable Law: Civil and Commercial Code of Thailand (Sections 1018-1028)

Partnership: A business formed by two or more individuals or entities sharing ownership and management.

• Characteristics: Partners share profits, losses, and management responsibilities.
• Benefits: Pooling of resources and expertise, flexibility in management.
• Limitations: Partners may be jointly and severally liable for partnership debts.
• Applicable Law: Civil and Commercial Code of Thailand (Sections 1035-1062)

Limited Partnership: A partnership with at least one general partner with unlimited liability and one or more limited partners with limited liability. There must be at least two shareholders, and if involving foreign shareholders or directors, the Thai shareholder must hold at least 51% of the total share.

• Characteristics: Limited partners have limited liability, while general partners have unlimited liability.
• Benefits: Limited partners enjoy limited liability protection.
• Limitations: General partners bear unlimited personal liability.
• Applicable Law: Civil and Commercial Code of Thailand (Sections 1063-1093)

Limited Company (Private Limited Company): A separate legal entity with limited liability for shareholders.

• Characteristics: Shareholders' liability is limited to their capital contribution.
• Benefits: Separate legal personality, limited liability protection.
• Limitations: Compliance with corporate governance requirements, and restrictions on transferability of shares.
• Applicable Law: Civil and Commercial Code of Thailand (Sections 1094-1291)

Public Company Limited: A company whose shares are publicly traded on a stock exchange.

• Characteristics: Subject to stricter regulatory requirements and disclosure obligations.
• Benefits: Access to public capital markets, enhanced visibility and credibility.
• Limitations: Compliance with stringent regulatory and reporting standards.
• Applicable Law: Public Limited Companies Act B.E. 2535 (1992)

Independent professional statuses in Thailand include:

Freelancers: Individuals who offer their services on a project basis, typically without long-term employment contracts.

• Criteria: Individuals working independently without formal employment relationships.
• Rights/Responsibilities: Responsible for their own taxes, insurance, and business operations.
• Tax Considerations: Required to report and pay taxes on income earned.

When setting up a company in Thailand, there are several requirements including registered capital, shareholders, company address, and an auditor license number. The minimum registered capital varies between industries and is generally 2,000,000 THB for companies not promoted by the Board of Investment (BOI). For companies that aren't BOI-promoted, foreigners cannot hold more than 49 percent of the company shares.

• Sole Proprietorship/Partnership: Register with the Ministry of Commerce or local authorities. Costs vary depending on the location and nature of the business.
• Limited Company/Public Company Limited: Register with the Department of Business Development. Costs include registration fees, capital requirements, and legal fees.
• Freelancer/Independent Contractor: No specific registration is required, but individuals must comply with tax obligations. Costs may include tax registration fees and professional fees for tax compliance services.

Incorporation/Registration Timeline:

• Sole Proprietorship/Partnership: Typically completed within a few weeks to a month, depending on the complexity and completeness of the application.
• Limited Company/Public Company Limited: The process of registering a Thai Company Limited with the Department of Business Development is generally straightforward and can be completed in about one day, with the government fee for setup being approximately 5,500 THB and an additional fee of around 1,000 THB for issuing company documents.
• Freelancer/Independent Contractor: Immediate commencement of business activities, with ongoing compliance requirements.