Limited Partnership in Thailand

In Thailand, business owners can choose between two types of partnerships: an ordinary partnership and a limited partnership. While an ordinary partnership involves two or more individuals sharing unlimited liability, a limited partnership has a distinct structure. In this model, there are two types of partners: the general partner, who holds unlimited liability, and the limited partner, who is only liable up to the amount they invest.

Though the concept may seem complex, Lotus Ledger is here to help you navigate the process. If you're looking to set up a limited partnership in Thailand, our experienced legal team can handle all the paperwork and guide you through the details of liability and other requirements.

Why Choose a Limited Partnership?

Many entrepreneurs opt for a limited partnership because of the significant benefits it offers. The limited partner enjoys the major advantage of limited liability, meaning their financial risk is capped at the amount of capital they contribute. For example, if the limited partner invests 1 million Baht, that's the maximum amount they can lose, even if the partnership faces unexpected expenses.

Additionally, a limited partnership provides flexibility for business operations. Thai law allows businesses under this structure to engage in various industries without excessive restrictions. However, depending on the nature of your business, you may still need specific licenses. Lotus Ledger can assist you in obtaining any necessary licenses.

One key benefit is the control the partners have over adding new members to the business. Any new partner must be agreed upon by all existing partners, providing a level of stability and mutual consent.

Moreover, a limited partnership allows up to 49% foreign ownership without requiring a foreign business license. This makes it a great option for foreign entrepreneurs looking to collaborate with Thai nationals. However, if the foreign partner's ownership exceeds 49%, a foreign business license is required, and Lotus Ledger can help guide you through that process as well.

Considerations Before Moving Forward

While a limited partnership offers several advantages, it’s important to be aware of the potential drawbacks. The most significant disadvantage is the unlimited liability carried by the general partner. If the business encounters financial issues, the general partner can lose more than their initial investment, which poses a higher risk compared to the limited partner’s capped liability.

Another consideration is the management structure. The general partner holds full control over the day-to-day operations, while the limited partner has no authority over daily management unless they change their role to that of a general partner.

Additionally, setting up a limited partnership involves more paperwork than an ordinary partnership, and there are formal steps to follow if the partnership needs to be dissolved. However, Lotus Ledger can assist in preparing and filing the necessary documents, ensuring a smooth process.

Legal Requirements for Limited Partnerships

To establish a limited partnership in Thailand, certain legal requirements must be met. If the general partner is a foreigner, they must hold a work permit or a non-immigrant business visa. If a foreign partner owns more than 49% of the business, a foreign business license is required.

Thai law mandates a minimum capital investment of 2 million Baht to start the partnership. However, the partners are not required to contribute equally.

Setting Up a Limited Partnership: Timeline

On average, setting up a limited partnership in Thailand takes about one week, provided the necessary steps are followed correctly. Many entrepreneurs trust Lotus Ledger to ensure the process is done efficiently and without delay, enabling them to launch their businesses swiftly.

To get started, the partners need to complete and submit a registration application to the Direct Registration Office, along with the applicable fees. The registration process requires detailed business information, and our legal team can expertly assist in preparing and submitting the necessary paperwork.

If you’re ready to set up a limited partnership in Thailand, contact Lotus Ledger today. We’ll provide you with a detailed quote and help guide you through every step of the registration process.

Contact us to get started.