Limited Company in Thailand

A Popular and Flexible Business Structure for Foreign Entrepreneurs

A Limited Company is the most common type of business entity in Thailand due to its ease of setup and liability protection for shareholders. The name “Limited” signifies that shareholders' liability is restricted to their investment in the company, making it Thailand’s equivalent of a Limited Liability Company (LLC) in other countries. Lotus Ledger simplifies the company registration process, guiding you through every step to ensure a smooth setup.

Benefits of a Limited Company

Foreign entrepreneurs enjoy numerous advantages when establishing a Limited Company in Thailand:

• Familiar Business Structure – Since Limited Companies operate similarly to LLCs in other countries, foreign business owners can navigate the setup and management process with ease.

• Limited Liability – Shareholders are only liable for their investment, protecting them from additional financial risks beyond their capital contribution.

• Flexible Share Structure – Owners can maintain full control through a tiered share system, allowing adjustments to dividend allocations and voting rights as needed.

• Operational Flexibility – A Limited Company can conduct various business activities with the appropriate licenses. Roles and responsibilities are clearly defined in company documents, ensuring operational clarity.

• Foreign Ownership Options – A Limited Company can be 100% foreign-owned under certain conditions. Lotus Ledger will help determine if your business qualifies and guide you through the necessary steps.

• Easier Work Permit Processing – Once established, a Limited Company can sponsor work permits for foreign employees, including executives. Lotus Ledger assists in obtaining these permits.

• Corporate Banking Access – Your company can open a corporate bank account, including checking, savings, and foreign currency accounts, with online access available.

Potential Drawbacks of a Limited Company

While a Limited Company is the preferred choice for many, there are some restrictions to consider:

• Thai Shareholding Requirement – Unless granted a Foreign Business License (FBL), a Limited Company must have at least 51% Thai ownership. Certain business activities are restricted for foreign ownership under the Foreign Business Act. Lotus Ledger’s legal team can assess your eligibility and advise accordingly.

• Work Permit Ratio – To hire a foreign employee, companies must employ at least four Thai nationals per foreigner.

Legal Requirements for Setting Up a Limited Company

To establish a Limited Company, businesses must meet specific legal requirements, including:

• Minimum of two shareholders

• At least one director and one auditor

• Filing of a Memorandum of Association

• Holding a statutory meeting

• Registering the incorporation papers with the Commercial Registrar

Company Registration Process & Timeline

Setting up a Limited Company in Thailand can be completed in as little as a day, though it may take longer depending on business requirements. The key steps include:

• Company Name Reservation – The Business Development Office in the Ministry of Commerce has specific guidelines for reserving a company name.

• Memorandum of Association Filing – This document includes the company name, address, promoter details, authorized capital, share distribution, and business objectives.

• Statutory Meeting – Shareholders must approve company bylaws, elect directors, appoint an auditor, and ratify initial expenditures.

• Company Registration – The director must register the company with the Commercial Registrar.

• Tax Registration – Depending on business activities, the company may need to register for Specific Business Tax or Value Added Tax (VAT). Lotus Ledger’s legal team can help determine your tax obligations.

• Requirements to Register a Limited Company

• Minimum registered capital of 15 THB (with at least 5 THB per share)

• At least two shareholders

• Minimum 25% of registered share capital must be paid up

• For foreign-owned companies, shareholders must provide proof of funds for the paid-up capital

• Foreigners can form a Thai-majority company with a Thai partner holding at least 51% ownership

• Lotus Ledger offers expert assistance in setting up your Limited Company in Thailand, ensuring compliance with all legal and regulatory requirements.

Contact Lotus Ledger today to get started.