Business Overview
Following the Asian financial depression of 1997, Thailand further opened its
economy to foreign investment. Manufacturing and professional services, except
banking, present few entry problems for the would-be investor. Even so, the
government continues to closely guard some industries by limiting to 50 percent
foreign ownership of companies in many sectors. As a result, foreign investors
partner with law firms and trusted local acquaintances.
Owning land is another tricky issue, although the regulations were eased by
land-reform bills passed in 1999. Regulations also vary depending on region.
Investing in remote and less-developed areas is rewarded with easier regulations
and greater incentives.
The Board of Investment (BOI) offers qualified foreign investors a number
of incentives, including tax holidays.
Board of Investment
555 Vibhavadi-Rangsit Road, Chatuchak
Bangkok 10900 Thailand
Tel: +66-2 537-8111/55
Fax: +66-2 537-8177
Email: head@boi.go.th
Hiring agencies
Establishing a business in Thailand may seem daunting with all its regulatory
hurdles, but some agencies can be hired to facilitate the registration process.
Some of these companies advertise in the classified sections of English-language
newspapers such as Bangkok
Post and The
Nation.
Chambers of commerce, contactable via your country's embassy, can also offer
advice and assistance in finding suitable Thai partners.
Kinds of businesses that foreign investors can set up
A. Partnerships
Thailand provides for three general types of partnerships:
- Unregistered ordinary partnerships, where partners are jointly and wholly
liable for all obligations.
- Registered ordinary partnerships, where the partnership becomes a legal
entity, separate and distinct from the individual partners.
- Limited partnerships. Individual partner liability is restricted
to the amount of capital contributed to the partnership. Limited partnerships
must be registered.
B. Limited companies
- Private limited company. Must submit a Memorandum of Association (Articles
of Incorporation) and Articles of Association (By-laws) as its constitutive
documents. The registration fee for a private limited company is 5,500 baht
per million baht of capital.
- Publicly limited companies may offer shares, debentures and warrants to
the public and apply to have their securities listed on the Stock Exchange
of Thailand (SET), after complying with requirements, such as the submission
of a prospectus. The registration fee for a public limited company is 2,000
baht per million baht of capital.
C. Joint venture
Not considered a legal entity based on the Civil and Commercial Code. The
Revenue Code, however, recognizes a joint venture as a single entity whose
income is subject to taxes.
D. Branches of foreign offices
For a foreign branch to be granted an alien business license, the working
capital brought into Thailand must be equivalent to 5 million baht over a four-year
period.
E. Regional head office
Companies establishing regional offices need not register or incorporate
as juristic entities in Thailand, and need not submit financial statements
to the Department of Commercial Registration. The department assists in the
Customs clearing of foreign staff's personal effects, applying for visa extensions,
and changing visa types.
As a matter of norm, work permits for up to five foreign staff may be granted,
but this can be expanded on a case-by-case basis. The government charges up
to 1,000 baht per year for new or renewed permits.
F. Regional trade office and investment support offices
In 1996, the government announced businesses that provide:
- Information services related to sourcing and procurement, but not brokerages
or agencies;
- Engineering and technical services, except those related to architecture
and civil engineering;
- Testing and certifying standards of products, production and services standards;
- Exporting of all types of products;
- Wholesaling of all types of products within the country, excluding local
agricultural products, arts & crafts, antiques, and natural resources;
- Provision of training on the use of machinery, engines, tools, and equipment;
- Installation, maintenance, and repairing of machinery, engines, tools,
and equipment;
- Calibration of machinery, engines, tools, and equipment; and
- Computer software design and development
may receive the following incentives:
- Permission to own land for an office;
- Permission to bring in foreign nationals to undertake investment feasibility
studies;
- Permission to bring in as many foreign technicians and experts as required;
- Permission to take or remit foreign currency abroad; and
- No limit in the number of shares owned by foreigners.
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