There are several different business structures,
which you can choose in operating your
business. TPL will advice on the most
suitable form of the local company to be
incorporated and register such company with the
Ministry of Commerce and the Revenue Department
of the Ministry of Finance, as described in the
If required, TPL can also help in finding
partners and shareholders and assist in all legal
matters pertaining to the company's
incorporation. TPL can offer managerial services
on behalf of absentee directors and is prepared
to be responsible to perform various duties on
behalf of a director as may be required.
Visa and Work Permit matters are serviced by our
In order to set up a limited company
in Thailand, the following procedures should be
A. Corporate Name Reservation
name to be reserved must not be the same or close to that
of other companies. Certain names are not allowed and
therefore the name reservation guidelines of the
Commercial Registration Department in the Ministry of
Commerce should be observed. The approved corporate name
is valid for 30 days. No extension is allowed.
B. File a Memorandum of Association
Memorandum of Association to be filed with the Commercial
Registration Department must include the name of the
company that has been successfully reserved, the province
where the company will be located, its business
objectives, the capital to be registered, and the names
of the seven promoters. The capital information must
include the number of shares and the par value. At the
formation step, the authorized capital, although partly
paid, must all be issued.
Although there are no minimum capital
requirements, the amount of the capital should be
respectable enough and adequate for the intended business
The Memorandum registration fee is Thai Baht
50.-per Thai Baht 100,000.- of registered capital. The
minimum fee is Thai Baht 500.-, the maximum Thai Baht
C. Convene a Statutory Meeting
the share structure has been defined, a statutory meeting
is called during which the articles of incorporation and
bylaws are approved, the Board of Directors is elected
and an auditor appointed. A minimum of 25 % of the par
value of each subscribed share must be paid.
three months of the date of the Statutory Meeting, the
directors must submit the application to establish the
company. Company registration fees are Thai Baht 500.-
baht per Thai Baht 100,000.- of registered capital. The
minimum fee is Thai Baht 5,000.-, the maximum Thai Baht
E. Tax Registration
liable for income tax must obtain a tax I.D. card and
number for the company from the Revenue Department within
60 days of incorporation or the start of operations.
Business operators earning more than Thai Baht 600,000.-
per annum must register for VAT within 30 days of the
date they reach Thai Baht 600,000.- in sales.
Firms must keep books and follow accounting
procedures specified in the Civil and Commercial Code,
the Revenue Code and the Accounts Act. Documents may be
prepared in any language, provided that a Thai
translation is attached. All accounting entries should be
written in ink, typewritten, or printed.
Specifically, Section 1206 of the Civil and
Commercial Code provides rules on the accounts that
should be maintained as follows:
directors must cause true accounts to be kept:
||Of the sums
received and expended by the company and of the
matters in respect of which each receipt or
expenditure takes place.
assets and liabilities of the company."
A. Imposition of Taxes
are required to withhold income tax from the salary of
all regular employees.
A value-added tax of seven percent is levied
on the value added at each stage of the production
process, and is applicable to most firms. The VAT must be
paid on a monthly basis.
A specific business tax is levied on firms
engaged in several categories of businesses not subject
to VAT, based on gross receipts, at a variable rate
ranging from 0.1 % - 3.0 %.
Corporate income tax is 30 % of net profits
and is due twice each fiscal year. A mid-year profit
forecast entails advance payment of corporate taxes.
B. Annual Accounts
newly-established company or partnership should close
accounts within 12 months from the date of its
registration. Thereafter, the accounts should be closed
every 12 months. The performance record is to be
certified by the company auditor, approved by
shareholders, and filed with the Commercial Registration
Department, Ministry of Commerce, within five months of
the end of the fiscal year, and with the Revenue
Department, Ministry of Finance, within 150 days of the
end of the fiscal year.
If a company wishes to change its accounting
period, it must obtain written approval from the Director
General of the Revenue Department.
C. Accounting Principles
general, the basic accounting principles practiced in the
United States are accepted in Thailand, as are accounting
methods and conventions as sanctioned by law. The
Institute of Certified Accountants and Auditors of
Thailand is the authoritative group promoting the
application of generally accepted accounting principles.
Any accounting method adopted by a company
must be used consistently and may be changed only with
approval of the Revenue Department.
accounting practices of note include:
The Revenue Code permits the use of varying
depreciation rates according to the nature of the
classes of assets which have the effect of
depreciating the assets over periods that may be
shorter than their estimated useful lives. These
maximum depreciation rates are not mandatory; a
company may use lower rates that approximate the
estimated useful lives of the assets. But if a
lower rate is used in the books of the accounts,
the same rate must be used in the income tax
for Pension Plans
Contributions to a pension or provident fund
are not deductible for tax purposes unless these
are actually paid out to the employees, or the
fund is approved as a qualified fund by the
Revenue Department and is managed by a licensed
Local companies with either foreign or local
subsidiaries are not required to consolidate
their financial statements for tax and other
government reporting purposes, except for listed
companies which must submit consolidated
financial statements to the Securities and
Exchange Commission of Thailand.
A statutory reserve of at least five percent
of the annual net profits arising from the
business must be appropriated by the company at
each distribution of dividends until the reserve
reaches at least 10 % of the company's authorized
Stock dividends are taxable as ordinary
dividends and may be declared only if there is an
approved increase in authorized capital. The law
requires the authorized capital to be subscribed
in full by the shareholders.
D. Auditing Requirements and
financial statements of juristic entities (that is, a
limited company, a registered partnership, a branch, or
representative office, or a regional office of a foreign
corporation, or a joint venture) must be certified by an
authorized auditor and submitted to the Revenue
Department and (except for joint ventures) to the
Commercial Registrar for each accounting year.
Auditing standards conforming to
international auditing standards are, to the greater
extent, recognized and practiced by authorized auditors
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86/1 Sukhumvit Soi 23, Sukhumvit Road, Bangkok
Tel.:+66-2-258-4086, 259-1601, Fax: +66-2-259-6217