Doing Business in Thailand: Minimal Capital Requirements

January 3 2012 Categories: Doing Business In Thailand, Thailand Business, Thailand Company Registration No comments yet

There is a lot of confusion as to minimal capital requirements when doing business in Thailand and I will try to clarify this issue in this post.

What is the minimum capital requirement to incorporate a Thai owned Limited Company?

The minimal capital requirement to incorporate a Thai limited company is 100,000 THB or a capital sufficient to exercise the business of the company.

While this criteria is not mentioned in the Thai Civil and Commercial Code the fact is that this minimal capital requirement applies only to Thai owned companies (a company in which Thai shareholders owns a minimum of 51% of the share capital)

What is the minimum capital requirement to incorporate a foreign owned Limited Company?

The minimal capital requirement to incorporate a foreign owned Thai limited company will be 2,000,000 THB (Section 14 of the Foreign Business Act) if the foreign owned company exercises an activity that is not controlled under List 2 and List 3 of the Foreign Business Act.

If the foreign owned company applies for a Foreign Business License or a Foreign Business Certificate to exercise an activity that is controlled under List 2 and List 3 of the Foreign Business Act, then the minimal capital requirement will be 3,000,000 THB (Section 14 of the Foreign Business Act) per activity for which a license is required.

If for example a foreign owned limited company apply for a license for retailing goods (FBA List 3 No 14) and services (FBA List 3 No 21) the capital requirement will be 3,000,000 + 3,000,000 THB that is to say 6,000,000 THB. Note that Section 14 of the FBA also applies to US Amity Treaty Company.

Note: that “minimum capital” in the FBA means the capital to be brought by the foreign investor.

Note: also that while the terms paid up are not used in relation to the definition of minimum capital in the FBA, it is the minimum capital “to be used at the commencement of the business operation”. Therefore the minimum capital under FBA Section 14 must indeed be brought in prior to commencement of the business operation and must hence be paid up.

Minimum Capital Requirement a Company must have to support a work permit?

In order to support a work permit an ordinary (non BOI promoted) Limited Company needs to have a minimum paid up capital of 2,000,000 THB per foreign employee.

Does the capital needs to be paid up and if so when?

When registering a limited company, at least 25 percent of the subscribed shares must be paid up.

However if the capital is declared fully paid up then 100% of the subscribed shares must be paid up. Legally the capital when declared paid up should be paid-up before the incorporation of the company. That is the reason why the first director of the company is requested to give receipt to the shareholders that they have paid their share subscription.

Of course the amounts listed above are the minimal legal requirements. If you want to do business in Thailand you should however consider what your investment actually cost before to implement it (which means that you should do a business plan) and not simply refer to the minimum of the law because doing business in Thailand is often more costly than what investors first anticipate.

About the Author:

The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.

http//:www.renephilippe.com

Originally posted 2009-09-28 05:31:43.

Doing Business in Thailand