Doing Business in Thailand

The following article was written in an effort to provide insight to readers about doing business in Thailand and the various corporate structures used to do so.

Those wishing to conduct business in Thailand are well advised to conduct research and due diligence into Thai business customs, practices, rules, and regulations. That being stated, there are many options with regard to corporate formation for those wishing to conduct business within the jurisdiction of the Kingdom of Thailand. As in countries such as the United States of America, in the jurisdiction of the Kingdom of Thailand individuals may conduct business as a sole proprietorship. Meanwhile, some individuals or groups may prefer to conduct business as a partnership. In the Kingdom of Thailand, partnerships are authorized in the form of both registered and unregistered partnerships which could or could not be vested with limited liability protection. Limited partnerships are sometimes utilized by two or more foreign nationals doing business in Thailand.

Many of those who ultimately decide to do business in Thailand make the decision to conduct business under the auspices of a Thai Limited Company. A limited company in the Kingdom of Thailand, much like a Limited Liability Company (LLC) in the United States, the European Union, or the United Kingdom; can have limited liability which can be a significant benefit for business operators as costs arising from possible personal legal actions can be, at least somewhat, defrayed. Bearing this in mind, under most circumstances, a foreign national wishing to conduct business in Thailand is well advised to take notice of Thai regulations regarding foreign ownership of Thai corporations (often referred to as juristic persons in Thai jurisprudence). In the vast majority of cases, a natural person of foreign extraction or a foreign juristic person may only be capable of owning 49% of a Thai company.

Even though most foreign nationals cannot own more than 49% of a Thai company, there are exceptions to this general rule. Most notable among the exceptions is the US-Thai Treaty of Amity which permits Americans to own virtually 100% of a Thai limited company provided it receives Amity Treaty certification from the Thai government for the activity which the company intends to engage in. Also of note is the Thai Board of Investment, sometimes colloquially referred to by the acronym: BOI. Foreign companies may be able to acquire BOI certification and thereby enjoy many benefits not generally accorded to foreign individuals or entities conducting business in Thailand.

Aside from limited companies, partnerships and sole proprietorships Thai law permits the operation of associations and foundations. However, both of these types of juristic persons have somewhat limited business usage as they are generally only utilized by philanthropic or non-profit organizations. Those wishing to conduct business in Thailand should also note that Thai Labour regulations stipulate that a foreigner must have a Thai work permit in order to take up employment lawfully within the jurisdiction. Failure to obtain a work permit could result in fines or even criminal sanctions.