Thailand business setup procedure (For Limited Liability Company)

Among 189 economies worldwide, Thailand is currently ranked 18^th in the World Bank’s Doing Business 2014. Compared to other Southeast Asia countries, Thailand ranks third (just after Singapore and Malaysia). In Thailand, procedures for business setting-up and fee-charging are varied by each type of business (partnerships, limited liability company, and public company).

The procedure below will describe steps to establish a private limited company, which is the most popular business form in Thailand. In practice, this procedure usually lasts from 2 to 6 weeks depending on diligence of promoters and expected business lines.

No.

Steps

Procedure

Fee charged

Time to complete

1

Search and reserve a company name online

The promoters of the company can search and reserve their company name via the Department of Business Development’s website www.dbd.go.th

The company name is only reserved within 30 days and not extendable. Hence, the promoters must complete their business registration within 30 days.

The name reservation in person at the Department’s Registrar is no longer available since 14 January, 2013.

Free

1 day (online procedure)

2

Register the Memorandum of Association

The promoters have to register the Memorandum of Association at the Department of Business Development’s Registrar – The Ministry of Commerce in Bangkok within 30 days since the date of company name reservation. If their office is not in Bangkok, the company directly handles dossiers in a local registrar where the company’s headquarter located.

There are at least 3 signatures of the promoters in the Memorandum of Association.

A content of the Memorandum of Association includes:

1. Company’s name (the same as the name reserved), which ends with the word “limited”
2. Location of head office (located at which province)
3. Objective of the company
4. A statement which specifies limited responsibility of shareholders

5. Registered capital must be divided into each share with the same value
6. Name, address, age, occupation and number of shares that persons who start up the company reserve to buy the shares)

The Memorandum of Association has to be executed in at least 2 identical copies with the signatures of all promoters and 2 witnesses.

After registering the Memorandum of Association, the promoters conduct a payment for the share subscribed.

The company has to pay 2 kinds of following fees:

- Fixed fee for register the Memorandum of Association: THB 500

- Fee is charged on registered capital:

+ If registered capital is smaller than THB 1,000,000: fee is THB 50

+ With each additional THB 100,000 of registered capital: fee is THB 50

+ If registered capital is greater than THB 50,000,000: fee is THB 25,000

- 1 day for registration

- Possibly be completed in a same day of Statutory Meeting

3

Convene a Statutory Meeting

After registering the Memorandum of Association, the company has to convene a Statutory Meeting with participations of all shareholders. A notice of the Statutory Meeting will be sent to shareholders at least 7 days prior to the meeting.

During this meeting, all the followings must be completed:

1. The adoption of the regulations of the company, if any.

2. The ratification of any contracts entered into and any expenses incurred by the promoters in promoting the company.
3. The fixing of the amount, if any, to be paid to the promoters.
4. The fixing of the number of preference shares, if any, to be issued, and the nature and extent of the preferential rights accruing to them.
5. The fixing of the number of ordinary shares or preference shares to be allotted as fully or partly paid-up otherwise than in money, if any, and the amount up to which they shall be considered as paid-up.
The description of the services or property in return for which such ordinary shares or preference shares shall be allotted as paid-up shall be expressly laid down before the meeting
6. The appointment of the first directors and auditors and the fixing of their respective powers.

* The resolution of the Statutory Meeting will be approved when most of members (including at least half of the promoters with their half shares), vote for.

* After organizing the Statutory Meeting, the promoters and investors will hand out all powers to the company’s directors.

* When 25% the par value of each subscribed share is paid, the authorized directors will register the company.

- 1 day for convening the meeting

- Possibly convening the meeting in a same day with registering the a company

4

Register the Company

The authorized director has to handle the application of business registration at the Department’s Registrar successfully within 3 months since the Statutory Meeting. If not, the meeting will be no longer valuable.

The application has to cover the followings:

1. A total number of registered shares or a distribution of preference shares and ordinary shares

2. A statistic table of fully/partly paid preference/ ordinary shares distribution except for contributing capital in cash, specifying the payment schedule for the remaining shares in the event of partial payment

3. An amount of money paid to each class of shares

4. A total amount of money received for the shares

5. Director’s name, occupation and address

6. If directors have separate rights, their names and signatures will be defined corresponding to their rights

7. A schedule of capital contribution if the company is established

8. An address of the company and all branches

A copy of the articles of association/ the regulations (if applicable) and a summary of activities taking place in the Statutory Meeting with at least 1 signature of the director need to be attached to the application. Contemporaneously, the directors have to hand in 10 copies of the Memorandum of Association and the articles of association/ the regulations (if applicable) at the Department’s Registrar.

* In case all directors complete the followings at the same time with the Memorandum of Association completion of the promoters,the director can request to register the Memorandum and register the company within the same day.

1. Shall have the persons reserve to buy all the shares that the company can be registered.
2. Arrange the meeting to establish the company to consider various affairs according to legal regulations, and all the persons who start up the company and all the persons who reserve to buy the shares shall attend the meeting, and all of them shall agree in the affairs in the meeting.
3. Persons who start up the company assign all the affairs to the director.

4. The directors require the shareholders to pay a minimum of 25% of the par value of each subscribed share.

* According to the Notice in 11/01/2012 of the Director General of Revenue Department, enterprise code of a company is also their tax identification code since 01/02/2012. Hence, the company does not need to register for tax identification number issued.

* According to Thai law, a company is not required to have a corporate seal except for affixation on company share certificates. In practice, however, a Thai company usually affixes its corporate seal to other documents. The cost of such seal is THB 400 on average (within 4 days), and it can be ordered and purchased via private stationeries. The cost of an urgent order is THB 700 - 800 and it takes about 2 days to make the seal.

- 1 day for registering the company

- Within 3 months the day of the Statutory Meeting, registering the company must be done