Thailand Employer of Record Overview

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The Ultimate Guide To
Employment in Thailand

Employing in Thailand
Using Shield Geo Employer of Record Services in Thailand
Payroll and Tax in Thailand
Immigration and Work Permits in Thailand
Setting up a Company in Thailand

Thailand Facts

Population size: 68,146,609
Currency: Thai Baht(Thai: บาท, sign: ฿; code: THB)
Capital city: Bangkok
Languages spoken: Thai
Ease of Doing Business: 46

Employing in Thailand: What You Need to Know

Shield GEO can contract directly with the company to employ and payroll their staff in Thailand. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits. Shield GEO is able to advice companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.

Thailand labour market is governed by strict rules and regulations. It’s important that appropriate advice is sought out based on the business structure that would be established in Thailand.

Some of the rules and regulations that govern Thai labour market include:

Labor Protection Act B.E. 2541 (1998)
Labor Protection Act B.E. 2551 (2008)
Labor Relations Act (No. 2) B.E. 2518 (1975)
Social Security Act of 1990 as amended in 1999
Workmen’s Compensation Act of 1994
State Enterprise Labour Relations Act B.E. 2543 (2000)
The Labour Court and Labour Court Procedure B.E. 2522 (1979)
Thai Civil and Commercial Code
Provident Fund Act B.E. 2530 (1987)
Alien Employee Act B.E. 2521 (1978)
Employment and Jobseeker Protection Act B.E. 2528 (1985)

For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Thailand.

Key points on employment

Minimum daily wage is 300 Baht per day
Maximum probationary period is 120 days
Maximum number of work hours per day varies between 8 hours and 9 hours, while maximum work hours per week varies between 48 hours and 42 hours per week
In addition to the 13 public holidays, each employee is entitled to a minimum of 6 days of annual leave
Employees are entitled to 30 days of sick leave

There are several key areas to be aware of within Thailand’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.

Key Factors to Consider When Employing in Thailand

Hiring in Thailand? Here's our latest article on employment in Thailand.

Contracts

An employment contract can be written or verbal as per the Labour Protection Act. Thai Civil and Commercial code and the Labour Protection Act stipulate the following statutory entitlements be included in employment contracts.
- Entitlement to rest, sick leave, annual leave and holidays
- Entitlements to remuneration (wages, overtime pay, holiday pay, severance pay)
- Notice period and the right to receive wages in case of termination of employment
- Restrictions on suspension from work
Different types of employees based on nature of employment contract:

Temporary workers:
- Have the same rights as permanent employees such as minimum wages, working hours, fairness etc
- Are considered employees under the Labour Protection Act
- Employees whose period of employment is fixed to 2 years and is terminated according to that period will not be entitled to severance payment
Agency workers:
- Outsourced/agency workers are protected under the Thai Labour Laws.
- As per the 2008 Labour Protection Act a business operator who utilizes outsourcing service for its employees is
  - Considered as an employer of outsourced workers
  - Ensure that the benefits to outsourced employees are similar to direct employees who have the same description
Part time workers:
- Receives wages based on an hourly rate
- Minimum wage per hour is 40 Baht
Permanent workers:
- Are protected under the Thailand Labour protection Act

Employee Entitlements

Information	Explanation
Statutory Working Hours ?	Non-hazardous work: Maximum number of hours per day is limited to 8 hours, while the maximum number of hours per week is limited to 48 hours. *However, under special contracts employer and employee may agree to arrange the period of working hours. However, such hours cannot exceed 9 hours per day and 48 hours per week. Hazardous work: Maximum number of hours per day is limited to 7 hours, while the maximum number of hours per week is limited to 42 hours. All employees are entitled to a total of 1 hour for a full working day. Such daily rest periods can be taken after five consecutive hours of work. Employer and employee may agree to a shorter rest period. However, a total of 1 hour should be allocated for a full working day. Employees should be granted one daily holiday per week and the interval between holidays must not exceed six days. Employees will be entitled for overtime pay rates for work performed in excess of the maximum hours stipulated by the contractual agreement or the statutory law. Maximum overtime hours allowed per week is limited to 36 hours and will be paid at a rate varying between 1.5-3.0 times normal hourly wage rate. Minimum age for employment is 15 years and the minimum age for employment that involves hazardous work is 18 years. Pregnant employees are prohibited from working overtime, on holidays, or between 10pm – 6am.
Time Off Work ?	An employee is entitled to a minimum of 6 days of annual leave after working consecutively for one full year. For an employee who has not completed one year of service, the employer may provide an annual leave on a pro-rate basis.
Medical Leave ?	An employee is entitled to take sick leave with 30 days of paid sick leave per year. An employer may request a medical certificate if an employee is absent for three consecutive days. Days on which the employee cannot work because of injury or illness caused by work shall not be deemed sick leave.
Annual Leave Accrual Entitlement ?	Employees are entitled to 13 national holidays per year. In addition employees are entitled to a minimum of 6 days of vacation after one year of consecutive work.
Maternity Leave in Thailand ?	Female employees are entitled to 90 days of maternity leave and 45 days of paid leave. There are no specific regulations with regard to Paternity leave.

Employment Termination

Information	Explanation
Severance / Redundancy Pay ?	An employee can be terminated without a specific cause and subject to all payments including severance pay, unused annual leave, overtime pay, and other payments due under the employment agreement within 3 days from the termination of employment. Severance pay rates vary based on the length of employment. Severance pay rate Work period 30 days pay 120 days – less than 1 year 90 days pay 1 year – less than 3 years 180 days pay 3 years – less than 6 years 240 days pay 6 years – less than 10 years 300 days 10 years and over Severance pay is not made if: The employment contract is for a fixed duration such as projects The work is periodic in nature and has a fixed term or ending upon completion, seasonal work etc. Conditions under which there would be non-severance payment: Dishonesty or deliberate act of crimes against the employer Intentionally causing damage to the employer Negligence resulting in serious damage to the employer Violation of work regulations subsequent to a warning letter from an employer Desertation of work for 3 consecutive working days without reasonable cause Being imprisoned Conditions under which a special severance would be paid: If the employer relocates the its place of business, employees must be notified at least 30 days in advance or pay an amount equal to 30 days’ of wages. Employees have the liberty to terminate employment contract and is entitled to receive no less than 50% of the prescribed rates of severance pay. If the employer terminates employment due to streamlining of work units, production process, distribution process, due to the introduction or change of machinery and technology, at least 60 days of notice or 60 days’ of wages should be paid to the employee. In the interim a labour inspector should also be notified. If the terminated employee has worked consecutively for over 6 years, the employee would be entitled to an additional severance pay of 15 days of work for each year starting from the seventh year. However, such additional special severance payment should be limited to 360 days of wages.
Termination of Employment ?	Either party to an employment contract can give at least 1 days of notice and terminate employment, if the employment contract does not specify such terms. If an employee is dismissed for a statutory reason, such reasons should be kept on record. An employee may not be dismissed for due to the following reasons: Pregnancy Trade union membership Participation in trade union activities Unfair dismissal: Under the Labour Court’s Act, a Labour Court can re-instate an employee at the same wage rate that applied prior to the dismissal. However, if the Labour Court determines that the employer and employee cannot work together due to specific conditions, then it may order the employer to pay compensation. Ceasing operations temporarily: When employers encounter this issue the affected employees can be paid at a reduced rate of 25% of their normal pay rates. Workmen’s compensation Includes 4 categories Compensation amount Medical expenses Work rehabilitation expenses Funeral expenses Compensation amount should be paid monthly at the rate of 60% of the monthly wages. Medical expenses must be paid out and should not exceed 45,000 Baht for formal cases and 65,000 Baht for serious injuries. Work rehabilitation expenses should not exceed 20,000 Baht. In case of death, funeral expenses should be paid at a maximum amount equal to 100 times of the minimum daily wage prescribed by the law.

Information

Explanation

Severance / Redundancy Pay ?

An employee can be terminated without a specific cause and subject to all payments including severance pay, unused annual leave, overtime pay, and other payments due under the employment agreement within 3 days from the termination of employment.

Severance pay rates vary based on the length of employment.

Severance pay rate Work period

30 days pay 120 days – less than 1 year

90 days pay 1 year – less than 3 years

180 days pay 3 years – less than 6 years

240 days pay 6 years – less than 10 years

300 days 10 years and over

Severance pay is not made if:

The employment contract is for a fixed duration such as projects
The work is periodic in nature and has a fixed term or ending upon completion, seasonal work etc.

Conditions under which there would be non-severance payment:

Dishonesty or deliberate act of crimes against the employer
Intentionally causing damage to the employer
Negligence resulting in serious damage to the employer
Violation of work regulations subsequent to a warning letter from an employer
Desertation of work for 3 consecutive working days without reasonable cause
Being imprisoned

Conditions under which a special severance would be paid:

If the employer relocates the its place of business, employees must be notified at least 30 days in advance or pay an amount equal to 30 days’ of wages. Employees have the liberty to terminate employment contract and is entitled to receive no less than 50% of the prescribed rates of severance pay.
If the employer terminates employment due to streamlining of work units, production process, distribution process, due to the introduction or change of machinery and technology, at least 60 days of notice or 60 days’ of wages should be paid to the employee. In the interim a labour inspector should also be notified.
If the terminated employee has worked consecutively for over 6 years, the employee would be entitled to an additional severance pay of 15 days of work for each year starting from the seventh year. However, such additional special severance payment should be limited to 360 days of wages.

Termination of Employment ?

Either party to an employment contract can give at least 1 days of notice and terminate employment, if the employment contract does not specify such terms. If an employee is dismissed for a statutory reason, such reasons should be kept on record. An employee may not be dismissed for due to the following reasons:

Pregnancy
Trade union membership
Participation in trade union activities

Unfair dismissal:

Under the Labour Court’s Act, a Labour Court can re-instate an employee at the same wage rate that applied prior to the dismissal. However, if the Labour Court determines that the employer and employee cannot work together due to specific conditions, then it may order the employer to pay compensation.

Ceasing operations temporarily:

When employers encounter this issue the affected employees can be paid at a reduced rate of 25% of their normal pay rates.

Workmen’s compensation

Includes 4 categories

Compensation amount
Medical expenses
Work rehabilitation expenses
Funeral expenses

Compensation amount should be paid monthly at the rate of 60% of the monthly wages. Medical expenses must be paid out and should not exceed 45,000 Baht for formal cases and 65,000 Baht for serious injuries. Work rehabilitation expenses should not exceed 20,000 Baht. In case of death, funeral expenses should be paid at a maximum amount equal to 100 times of the minimum daily wage prescribed by the law.

Probation

Information	Explanation
Probation Period ?	Thailand Employment law stipulates a maximum of 120 days.

Pension

Information	Explanation
Pension Requirements ?	Thai pension system is a 3 pillar system and includes: Pillar 1 – Old civil service scheme and social security fund. Includes old age benefits under the Social Security Fund (private sector) Pillar 2 – Government pension fund and National Security Fund (Thai government’s public pension scheme) Pillar 3 – Voluntary private pension schemes. In 2012 Thai government introduced a National Savings Fund, a new voluntary retirement savings program. Includes Provident funds and Retirement mutual funds. Pillar 1 and 3 would be more relevant to expats. Social security contributions* The Social Security Act of 1990, amended in 1999 specifies that all employers must with hold social security contributions from the monthly wage of each employee. The current rate is 5% of the first 15,000 Baht from the salary. Employer must match the employee contributions and should be remitted to the Social Security Office within the 15^th day of each day of the following month. Social Insurance A new business organization must register itself to make social security contributions. Registration of a juristic person: A copy of the certificate of incorporation A copy of the VAT form, or a copy of Specific Business Tax form, or a copy of the license to operate a factory/business Map of the business location Power of Attorney (authorizes others to act on behalf of one along with a duty stamp affixed pursuant to the revenue code) How to register the insured: A notice to register should be issued within 30 days from the effective date of employment to the Zone office of Social Security. Social Security Office (SSO) old age insurance scheme is: Socialized Defined benefit Pay as you go Features of SSO pension provision: Contribution – 3% employees, 3% employers, 1% government Maximum assessable salary per month 15,000 Baht Once you turn 55 pension benefits can be claimed To obtain a full rate pension, contributions must be made for at least 15 years Contributions are tax deductible. Pension payouts are tax exempt. Funds relevant to the private sector: Social security fund Retirement mutual fund Provident fund Social Security fund: Provides benefits in the event of: sickness, maternity, disability and death (Government, employer and employee contributes 1.5% of the employee’s salary) child allowance, old age (Government contributes 1%, while the employer and employee contributes 3% of the employee’s salary) unemployment (Government contributes 0.25%, while the employer and employee contributes 0.5% of the employee’s salary) Base wage used for the calculations range from 1,650 – 15,000 Baht Benefits paid out: Old age lump sum Old age pension paid monthly for a life time Tax benefits: Social security benefit payouts are tax exempt Retirement mutual fund* Retirement mutual funds are suitable for those who do not have other retirement welfare savings plans such as government pension funds or provident funds. It’s an investment vehicle that intends to promote retirement savings through tax incentives. Tax benefits: Investment up to 15% of annual assessable income or a maximum of 500,000 Baht when combined with provident funds or government mutual funds is tax deductible. Benefit payouts including capital gains are tax free Investors will not be granted tax benefits if the funds are redeemed before 55 years of age or if have not consistently held investment units for at least 5 years. Provident fund A provident fund is established under the mutual agreement between the employer and the employee. Voluntary contributions can range from 2%-15% given that the employer contributions are equal to or greater than the employee contribution. Factors to be considered by the employer prior to establishing a Provident Fund: Size of the organization Organizational growth rate Contribution rate Governance of the fund and management of the fund from employer’s end Number of employees and structure of employment (permanent or temporary employees) Saving ability of the employees Type of fund (a single fund or a pooled fund) Expenses (management fee, custodian fee, fund administration fee, and auditor fee) Management mechanism Asset management company (Fund manager must be a third party and not the employer himself. Must be licensed professionals of the SEC)

Information

Explanation

Pension Requirements ?

Thai pension system is a 3 pillar system and includes:

Pillar 1 – Old civil service scheme and social security fund. Includes old age benefits under the Social Security Fund (private sector)
Pillar 2 – Government pension fund and National Security Fund (Thai government’s public pension scheme)
Pillar 3 – Voluntary private pension schemes. In 2012 Thai government introduced a National Savings Fund, a new voluntary retirement savings program. Includes Provident funds and Retirement mutual funds.

*Pillar 1 and 3 would be more relevant to expats.

Social security contributions

The Social Security Act of 1990, amended in 1999 specifies that all employers must with hold social security contributions from the monthly wage of each employee. The current rate is 5% of the first 15,000 Baht from the salary. Employer must match the employee contributions and should be remitted to the Social Security Office within the 15^th day of each day of the following month.

Social Insurance

A new business organization must register itself to make social security contributions.

Registration of a juristic person:

A copy of the certificate of incorporation
A copy of the VAT form, or a copy of Specific Business Tax form, or a copy of the license to operate a factory/business
Map of the business location
Power of Attorney (authorizes others to act on behalf of one along with a duty stamp affixed pursuant to the revenue code)

How to register the insured:

A notice to register should be issued within 30 days from the effective date of employment to the Zone office of Social Security.

Social Security Office (SSO) old age insurance scheme is:

Socialized
Defined benefit
Pay as you go

Features of SSO pension provision:

Contribution – 3% employees, 3% employers, 1% government
Maximum assessable salary per month 15,000 Baht
Once you turn 55 pension benefits can be claimed
To obtain a full rate pension, contributions must be made for at least 15 years
Contributions are tax deductible. Pension payouts are tax exempt.

Funds relevant to the private sector:

Social security fund
Retirement mutual fund
Provident fund

Social Security fund:

Provides benefits in the event of:

sickness, maternity, disability and death (Government, employer and employee contributes 1.5% of the employee’s salary)
child allowance, old age (Government contributes 1%, while the employer and employee contributes 3% of the employee’s salary)
unemployment (Government contributes 0.25%, while the employer and employee contributes 0.5% of the employee’s salary)

*Base wage used for the calculations range from 1,650 – 15,000 Baht

Benefits paid out:

Old age lump sum
Old age pension paid monthly for a life time

Tax benefits:

Social security benefit payouts are tax exempt

Retirement mutual fund

Retirement mutual funds are suitable for those who do not have other retirement welfare savings plans such as government pension funds or provident funds. It’s an investment vehicle that intends to promote retirement savings through tax incentives.

Tax benefits:

Investment up to 15% of annual assessable income or a maximum of 500,000 Baht when combined with provident funds or government mutual funds is tax deductible.
Benefit payouts including capital gains are tax free
Investors will not be granted tax benefits if the funds are redeemed before 55 years of age or if have not consistently held investment units for at least 5 years.

Provident fund

A provident fund is established under the mutual agreement between the employer and the employee. Voluntary contributions can range from 2%-15% given that the employer contributions are equal to or greater than the employee contribution.

Factors to be considered by the employer prior to establishing a Provident Fund:

Size of the organization
Organizational growth rate
Contribution rate
Governance of the fund and management of the fund from employer’s end
Number of employees and structure of employment (permanent or temporary employees)
Saving ability of the employees
Type of fund (a single fund or a pooled fund)
Expenses (management fee, custodian fee, fund administration fee, and auditor fee)
Management mechanism
Asset management company (Fund manager must be a third party and not the employer himself. Must be licensed professionals of the SEC)

GEO Solutions or DIY Employment in Thailand?

Companies entering Thailand must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Thailand Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Thai entity established that can run payroll.

Learn how we've helped clients with employees in Thailand in this case article!

A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Tax

Income Tax Rates

A resident of Thailand is liable to pay taxes on income from all sources earned in Thailand as well as a on a portion of the income from foreign sources that is brought into Thailand. However, a non-resident of Thailand is only subject to income tax on sources of income earned in Thailand.

Assessable income includes the following.

Employment income attributable to personal services

Employment income attributable to jobs, positions or services

Income from goodwill, copyright, franchise, and annuity

Income from letting property, sales installments and hire-purchase agreements

Income from liberal professions

Income from construction contracts

Income from business, commerce, agriculture, industry, and transport

Grossed income	Tax Rate (%)
0-150,000	exempt
150,001-300,000	5
300,001-500,000	10
500,001-750,000	15
750,000-1,000,000	20
1,000,001-2,000,000	25
2,000,001-4,000,000	30
Over 4,000,001	35

Tax Returns Supplied

Yes

Corporate Tax Requirements

All individuals and corporate entities liable to pay tax must file annual tax returns.

Thai companies and foreign entities carrying on business in Thailand are required to file their tax returns (Form CIT 50) within 150 days from the closing date of their accounting periods. Tax payment must be made together with the tax returns.

In addition to the annual tax payment, any corporate entity subject to income tax on net profits is also required to make tax prepayment (Form CIT 51). A company is obliged to estimate its annual net profit as well as its tax liability and pay half of the estimated tax amount within two months after the end of the first six months of its accounting period.

Employers are obligated to contribute 5% of employee salary upto a maximum of 750 Baht per month. An employer is obligated to contribute between 2%-15% of the employee’s monthly wage to the Social Security Fund (SSF). This contribution should match the contribution made by the employee.

Employees are obligated to contribute 5% of employee salary upto a maximum of 750 Baht per month. An employee is obligated to contribute between 2%-15% of the employee’s monthly wage to the Social Security Fund (SSF).

Payroll and Tax in Thailand

There are specific rules in Thailand depending on whether your company employs residents or non-residents. The key concerns for a company that needs to comply with tax laws in Thailand are net taxable income, social security contribution, value added tax (VAT), corporate income tax, specific business tax (SBT), and property tax. Moreover, international treaties to avoid double taxation, international social security agreements, free trade agreements and special tax regimes for specific industries or sectors can make an indirect impact on a company’s tax environment.

Here's our most recent article on running payroll and taxes in Thailand.

Information	Explanation
Remote Payroll ?	A remote payroll in Thailand is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Thailand. As per the Thailand Revenue Department a foreign company is defined as -A company that carries out business functions in Thailand but is registered under a foreign law -A company that does not carry on business operations in Thailand but derives income from Thailand Thus a non-resident company is permitted to process payroll for Thailand residents who are on its payroll. Another option for a non-resident company to payroll its employees in Thailand would be to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.
Local Payroll Administration ?	In some cases, a company will register their business in Thailand under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll ?	Larger companies with a commitment to Thailand may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Thai payroll, and can fulfill all tax, withholding, and payroll requirements. This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Thai employment laws.
Fully Outsourced Payroll & Employment ?	Companies can outsource the employment and payroll of their staff in Thailand to a GEO, like Shield GEO. This is possible for both foreign workers and Thailand nationals. This is the easiest, fastest and safest way to payroll staff in Thailand. Shield GEO manages all aspects of payroll for workers in Thailand, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client. Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips. Read more about outsourced payroll and employment through Shield GEO.

Setting up payroll in Thailand

Information	Explanation
Currency ?	Thai Baht (Thai: บาท, sign: ฿; code: THB)
Social Security Registration ?	An employer needs to register an employee as the “insured person” who starts working at the age of fifteen to sixty years old in the enterprise with 1 or more employees with the social security office within 30 days from the start of work.
Documentation Required for New Employees ?	Employment contracts and labour relations are governed by the Labour Protection Act, the Labour Relations Act, the Civil and Commercial Code, and the Labour Procedure Act. New employees in Thailand whether local or foreign are governed by the Labour Protection Acts B.E.2541 (A.D.1998).

Tax Figures

Information

Explanation

Corporate Income Tax ?

Companies in Thailand are generally taxed at 20%. Branch corporate income tax rate is also 20%. However, corporate tax rates may vary as follows.

Small companies with a net profit between 300,000-3,000,000 Baht are taxed at 15%
Small companies with a net profit over 3,000,000 Baht are taxed at 20%
Companies listed in the Stock Exchange of Thailand are taxed at 20%
Companies newly listed in the Stock Exchange of Thailand or the Market for Alternative Investment are taxed at 20%
Foreign companies engaging in international transportation are taxed at 3%
Foreign companies disposing profit out of Thailand are taxed at 10%

Income Tax Rate ?

Grossed income	Tax Rate (%)
0-150,000	exempt
150,001-300,000	5
300,001-500,000	10
500,001-750,000	15
750,000-1,000,000	20
1,000,001-2,000,000	25
2,000,001-4,000,000	30
Over 4,000,001	35

Sales Tax ?

Current Value Added Tax (VAT) rate is 7%.

Business entities with an annual turnover exceeding 1.8 million Baht per annum is legally obligated to pay VAT.

Withholding Tax ?

Certain income types paid to companies can be subject to withholding tax at the point of source.

Such withholding tax rates on pre-specified categories of income are as follows.

- Dividends 10%
- Interest 1%
- Royalties 3%
- Advertising fees 2%

Service and professional fees

- - If paid to a Thai or foreign company with a permanent branch in Thailand 3%
    - If paid to a foreign company not having a Permanent branch in Thailand 5%
    - Prizes 5%

Other Tax ?

Petroleum Income tax

An indirect tax paid on an annual basis on net profit earned while carrying out the business of petroleum exploration and production.

Act B.E. 2514 (status 1) 50%

Act B.E. 2522 (status 2) 35%

Act B.E. 2532 (status 3) 50%

Disposal of profits 23.08%

Withholding tax rates

(For transfer of petroleum)

Property or rights 50%

Payment of interest 50%

Payment of dividend 23.08%

Payment of interest 15%

Time to prepare and Pay Taxes ?

266 hours

Time required to start a Business ?

25.5 days

Payments

Information	Explanation
Payment Mode ?	Manual/soft copy by cheque or online.
Frequency of Salary Payment ?	12 monthly pay periods.
Invoice / Payslips required ?	Available monthly as pdf.
Minimum Wage ?	Annual (US$) 3,012

Immigration and Work Permits in Thailand

Foreign workers are required to have the proper visas and work permits in Thailand, as established by immigration laws. Work permits must be secured for employees, and sponsored by a locally licensed and incorporated entity, which can be a problem for companies just entering the Thailand market. If you have yet to complete the incorporation process you can use an outsourced management company or GEO Employer of Record to sponsor the employee for the necessary permits.

Use your own company?

To obtain a work permit a foreigner must initially apply for a non-immigrant visa prior to entering Thailand. Once the initial visa is obtained a foreigner may begin the process of obtaining a work permit. On average the Thailand Ministry of Labor Office would take 7 business days to process a work visa.

Foreigners, who wish to work, conduct business or undertake investment activities may apply for

Business visa category “B”
Business approved visa category “B-A”
Investment and business visa work

Visas for single entry and multiple entries vary in cost. Please contact us for a quote.

A foreign national must ensure that the intended job and skills does not belong to the categories generally limited to Thai nationals only.

Steps in securing a work permit (Thai work visas)

Step 1: Securing a non-immigrant visa

To obtain a non-immigrant visa an employee must provide the following

Employment invitation and/or recommendation letters
A request from the company that the employee shall be given a non-immigrant visa that would allow the company to apply for a work permit
Company attestation mentioning that the employee is dependable, upstanding, law abiding and guarantees that the employee will respect Thai laws and customs

The non-immigrant visa will be valid for a period of 90 days. Non-immigrant

Step 2: Obtaining the work permit

The applicant (employee) must provide the following documents

Passport copies with each page signed by the employee
Non-immigrant visa card
Departure card TM. 6
Certified copies of scholastic records
Certified copies of transcripts of records
Curriculum vitae
3 copies of photos taken within the last 6 months (5 X 6 centimetres in size with full face coverage and on business attire)
Certified marriage certificate if married to a Thai national

The employer must provide the following documents

Commercial Registration Department certificate that shows the company is duly registered as a juristic entity and bearing the name of the Managing Director and/or Director, its objectives and registered capital
A Commercial Registration Department certified shareholders’ list
Application of VAT –VAT certificate (Phor Phor 20)
Withholding tax of the company
A Factory Department, Ministry of Industry issued factory license (if required)
Financial statement
Photocopy of the Directors’ passports and work permits with signature affixed
Office map
Letter of employment stating applicant’s salary and position
Employment agreement

While the work permit is being processed the Thai employer should apply for the tax ID card for the employee.

Thai work permit can be granted to expatriates who satisfy one or more of the following conditions

An establishment with a registered capital of atleast 2 million Baht can hire one expatriate for every 2 million Baht limited to a maximum of 10 expatriates in total.
An establishment which has paid income tax to the Revenue Department in the past 3 years with not less than 5 million Baht can hire 1 expatriate for every 3 million Baht limited to a maximum of 3 expatriates in total.
An establishment which employs 50 Thai employees can hire 1 expatriate for every 50 Thai employees limited to a maximum of 5 expatriates in total.
An expatriate who has an income and duty to pay personal income tax equivalent or more than 18,000 Baht

Thai immigration authorities may consider work permit approval, renewal and modification of employment descriptions regardless of afore mentioned requirements if any of the following conditions are met.

An expatriate working for a representative office conducting quality control, procurement, or marketing research
An expatriate working for investment consulting, administrative consulting, technical and technology, or periodical internal audit
A tourism representative who brings in foreigners to travel in Thailand
Employed under a International Financial Institution approved by the Bank of England
Engaged on a temporary basis in the entertainment, religious, social welfare, cultural or sporting without the intention of making profit and paying income tax to the government
A contractor working on government or state enterprise projects
An individual who works using mostly local raw materials or is capable of reducing the usage of imported raw materials
Supports the export of Thai products
An individual working to bring in new technology
Provision of labour where there is a shortage of Thai labour

Work permit for expatriates in Thailand

To apply for a work permit the employee should have a non-immigrant visa or a residence permit. An employer may file an application for advance permission to allow an employee work prior to arriving in Thailand. However, the work permit will only be issued one the employee arrives in Thailand.

Documents that should be submitted to apply for a work permit.

Application form (Tor. Thor. 2) along with 3 ID photos (5 X 6 cm) taken within the last 6 months
Letter from the employer certifying employment and the reasons for not employing a Thai national
Employment agreement
Copy of the company’s affidavit (within the past 6 months) certified by the Commercial Registration Department
Copy of the list of shareholders certified by the Commercial Registration Department (obtained within the last 6 months)
Copy of certified incorporation
Copy of the tax payer card, VAT certificate or Phor. Por. 01 and 09
Copy of current balance sheet with profit and loss showing total assets
Copy of Phor. Ngor. Dor. 50 (Corporate Income tax return) including the receipt
Organizational chart
List of all expatriate(s) along with their positions and work permit numbers
Copies of educational certificates and letters of recommendation from previous employment
Copies of all pages of the passport with a calid non-immigrant visa (category B or O)
Copies of all the pages of the work permit of the authorized Director showing the valid date (given that the authorized Director is a foreigner)
A medical certificate (taken not more than 3 months ago)
Power of attorney affixed with a stamp worth
Map of the company’s location
Official form of notification of commencement of work (Tor. Thor. 10)
Copy of Phor. Por. 30 for the previous 6 months including receipts (for new companies only)

Thai work permits are only valid as long as the visa allows the employee to remain in Thailand.

*A One-Stop Service Center was established to speed up the processing of visas and work permits. Work permits that would normally take between 10 and 14 working days would be processed within 3 hours.

The following personnel are qualified to submit applications via the one-stop service center

An investment expert who has been granted privileges under the Investment Promotion Act, the Petroleum Act, or the Industrial Estate Authority of Thailand
An executive or expert working for a company with a fully paid up registered capital or whose operational funds are not less than 30 million Baht
Alien officers of branch offices of overseas banks, foreign banking offices of overseas banks in Bangkok, provincial foreign banking offices of overseas banks, and representative offices of foreign banks
Aliens who come to work for branch, representative, or regional offices of overseas enterprises

Use the Shield GEO solution?

Once you get in touch with us, one of our consultants will take all the work off your hand, co-ordinate with our local partners to get all the required permits organised, provide the processing time, costs, document-checklist and keep you informed through the process. Contact us to know more.

Types of visas in Thailand

Category	Description of Visa
Non immigrant visa category “B”	Issued to applicants who wish to work or conduct business in Thailand 1) Foreigners who wish to work in Thailand Documents required • Passport or travel document (valid for 6 or more months) • Completed visa application form • Passport sized photograph (4 X 6cm) taken within the last 6 months • Evidence of financials (20,000 Baht per person and 40,000 Baht per family) • Letter of approval from the Ministry of Labour To obtain this letter the employer must submit Form WP3 to the Office of Workers Administration, Department of Employment at the Ministry of Labour or the Provincial Employment Office in the respective province. • Copy of the work permit issued by the Ministry of Labour and Alien income tax or Por Ngor Dor 91 (if the employee has worked previously in Thailand) • Corporate documents of the hiring company in Thailand o Business registration and business license o List of shareholders o Company profile o Details of business operations o List of names of foreign workers, their nationalities and positions o Map indicating the location of the company o Financial statements including the balance sheet, statement of income tax and business tax (Por Ngor Dor 50 and Por Ngor Dor 30 of the latest year) o Value added tax registration (Por Por 20) 2) Foreigners who wish to conduct business in Thailand Documents required • Passport or travel document (valid for 6 or more months) • Completed visa application form • Passport sized photograph (4 X 6cm) taken within the last 6 months • Evidence of financials (20,000 Baht per person and 40,000 Baht per family) • Letter of applicant’s company indicating the applicant’s position, length of employment, salary and purpose of visit to Thailand • Documents indicating correspondence with the business partners in Thailand • Evidence of financial status (where the applicant is self-employed) • Letter of invitation from trading or associated partners/companies in Thailand • Corporate documents of the hiring company in Thailand o Business registration and business license o List of shareholders o Company profile o Details of business operations o List of names of foreign workers, their nationalities and positions o Map indicating the location of the company o Financial statements including the balance sheet, statement of income tax and business tax (Por Ngor Dor 50 and Por Ngor Dor 30 of the latest year) o Value added tax registration (Por Por 20) Copies of company documents must be signed by the Board of Directors or authorized Managing Director and affix the company seal. An extension maybe applied for a period of one year from the date of first entry into Thailand. Visas for single entry and multiple entries vary in cost. Please contact us for a quote.
Non-Immigrant visa category “B-A” (Business approved visa)	The applicant’s associated company in which he or she will invest in or conduct business mat apply for this visa on behalf of the applicant. Period: valid up to a 1 year Visas for single entry and multiple entries vary in cost. Please contact us for a quote.
Non-Immigrant visa category “IB” (Investment and Business visa)	Issued to foreigners who intend to become teachers at education levels below university level in Thailand. Documents required: • Passport or travel document (valid for 6 or more months) • Completed visa application form • Recent passport sized photograph (4 X 6 cm) taken within the last 6 months • Letter of acceptance from the employing school or institution • Letter of approval from the respective government agency (Private Education Commission, the Office of the Basic Education Commission) • Evidence of education qualifications • Scholl license or business registration, list of shareholders and school profile • Applicant’s resume • Police certificate Visas for single entry and multiple entries vary in cost. Please contact us for a quote.
Three year Non-Immigrant visa “B” (for business only)	Issued to foreign citizens who wish to visit Thailand for business purposes. Valid for a period of 3 years. Multiple-entry allows the visa holder to visit Thailand as often as required as long as each visit is not for period exceeding 90 days. Employment of any kind is strictly prohibited. Documents required: • Completed application form • Valid passport or travel document • Two passport sized photographs (4 X 6 cm) taken within the last 6 months Additional documents required: • National identity card, residence documentation or proof of identity • Employment letter (applicant’s position, length of employment, salary and purpose of visit. If the applicant is self-employed, the applicant must provide documents representing business undertaking such as business registration and details of business operation) • Copies of correspondence with business partners in Thailand • Letter of invitation from trading or associated partners/companies in Thailand • Corporate documents of the hiring company in Thailand o Business registration and business license o List of shareholders o Company profile o Details of business operations o List of names of foreign workers, their nationalities and positions o Map indicating the location of the company o Financial statements including the balance sheet, statement of income tax and business tax (Por Ngor Dor 50 and Por Ngor Dor 30 of the latest year) o Value added tax registration (Por Por 20) Please contact us for a quote.
APEC Business Travel Car (ABTC) scheme	Australian businessmen and businessmen who belong to APEC economies are eligible to apply for ABTC which allows them to obtain multiple entry business visas. APEC economies which currently participate in the ABTC scheme are Australia, Brunei, Chile, China, Hong Kong, Indonesia, Japan, Korea (Republic of Korea), Malaysia, Mexico, New Zealand, Peru, Philippines, Papua New Guinea, Singapore, Thailand, Chines Taipei, Vietnam

Setting up a company in Thailand

When setting up a company you may want to consider these factors:

Business factors

There are clearly defined restrictions on foreigners who wish to establish a business in Thailand. The Foreign Business Act details out the industries in which foreign investors are prohibited to conduct business. Further, it specifies the industries in which foreign investors can establish business operations with special permission from the respective regulatory authority.

You may also want to consider the following when making your decision:
- The industry and the nature of business that will be established
- Nationality of the headquarters/Management and employees
- Minimum capital and conditions
- Treaties, free trade agreements and economic partnership agreements
  - Treaty of Amity between Thailand and the USA
  - Thailand – Australia Free Trade Agreement
  - Japan – Thailand Economic Partnership Agreement
Location

Location is another critical factor. Other provinces in Thailand (excluding the province in which Bangkok is located) may have different rules, cost structures and approval criteria. It is always recommended to seek advice from relevant professionals, such as business or legal advisers, accountants and others depending on your needs.

There are specific rules in Thailand depending on whether your company employs residents or non-residents. The key concerns for a company that needs to comply with tax laws in Thailand are net taxable income, social security contribution, value added tax (VAT), corporate income tax, specific business tax (SBT) and property tax. Moreover, international treaties to avoid double taxation, international social security agreements, free trade agreements and special tax regimes for specific industries or sectors can make an indirect impact on a company’s tax environment.

There are seven types of business forms available for foreign companies in Thailand. Each of these business forms has unique advantages and disadvantages, as well as differing scope of approved business activities, registration requirements, minimum capital requirements and accounting/auditing requirements.

When setting up a company in Thailand you have the following options.

Partnership
Limited Companies
Joint Ventures
Representative Office
Branch Office
International Head Quarters
Joint Ventures

This article provides a general guideline for foreign entities that seek to enter Thailand for business purposes. In particular, it looks at common pathways to establish a business presence in Thailand, generally through a Partnership, Limited Company, Joint Venture, Representative Office, Branch Office, or International Headquarters. In addition, various economic, tax, and regulatory factors are provided throughout as a source of useful information to assist those who seek to establish a business presence in Thailand.

Partnerships

There are 2 types of Partnerships that can be established in Thailand.

Ordinary Partnerships
Limited Partnerships

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Ordinary Partnership

All partners are jointly and wholly liable for all obligations of the partnership. Ordinary Partnerships are twofold.

Non-registered Ordinary Partnership
Registered Partnership

Limited Partnership

Limited Partnerships are twofold.

One or more partners whose individual liability is limited to the amount of capital contributed to the Partnership
One or more partners are jointly and unlimitedly liable for all obligations of the Partnership

Features of Partnerships

1. Unregistered Ordinary Partnership

All partners are jointly liable for all obligations of the Partnership
Not registered with the Ministry of Commerce
Partnership pays taxes at the rates applicable to individuals
If the Partnership agreement does not specify the value attributable for services, the contribution is to be equal to the average shares from other partners who made contributions in the form of cash or property

2. Registered Ordinary Partnership

All partners are jointly liable for all obligations of the Partnership
Must be registered with the Registration Office at district level (based on the location of the Partnership) or at the Office of Business Registration Services, Ministry of Commerce (Bangkok)
A Partner’s liability for the Partnership’s obligations ceases two years after the Partner leaves the Partnership

3. Limited Partnership

One or more partners are jointly liable without any limitation for all the Partnership obligations
Obligations of one or more partners are limited to their contributions made to the Partnership
Must be registered with the Registration Office at district level (based on the location of the Partnership) or at the Office of Business Registration Services, Ministry of Commerce (Bangkok).
Partnership name should exclude names of Partners with limited liability
A limited partner can contribute cash &/or property
A limited partners cannot contribute only services
Can be managed only by partners with unlimited liability
A partner who engages in the management, becomes jointly liable, without any limitation on the Partnership’s obligations

Management

A Limited Partnership must be managed only by the partners with unlimited liability. Partnerships which have a foreigner as a Managing Partner or Manager are considered as alien Partnerships and are under the jurisdiction of the Foreign Business Act.

Minimum capital requirements

Not specified

Accounting/Auditing requirements

Prepare financial statements and submit to the Business Information Service Office, Department of Business Development, or any provincial business development office within 5 months from the closing date. Failure to do so would result in a fine of 50,000 Baht.
Financial statements must be audited by and subject to the opinion of a certified auditor.
For Registered Partnerships with registered capital of less than 5 million Baht, total revenue of no more than 30 million Baht, and total assets of no more than 30 million Baht, the financial statements need not be certified by an auditor.

Registration Procedure

Information required for a Partnership registration:

Name of Partnership
Objective of the Partnership
Location of the Head Office and/or Branches
Name, address, age, nationality and the occupation of the Partners
Name of Managing Partner (must be partner without limit)
Limitation of Managing Partners power
Partnership seal

Place of registration:

Head office is located in Bangkok – Central Business Registration Division, Department of Business Development or at any of the 7 Business Development Offices
Head office is located in other provinces – Provincial Business Development Office and can submit the request via www.dbd.go.th

Steps for registering a Partnership:

1. Reserve the Partnership name. Upon receiving approval for the name, request for the Partnership registration within 30 days.

2. Prepare the request for registration and submit to the Registrar (request form can be obtained from the Department of Business Development or any of the 7 Business Development Offices or the Provincial Business Development offices or can be downloaded via www.dbd.go.th)

3. Obtain the certificate of registered transactions (if required)

4. Receive the certificate of registration

Limited Companies

In Thailand there are two main types of corporations:

Private Limited Companies
Public Limited Companies

Limited Public Companies in Thailand are governed by the Public Limited Company Act. Limited Private Companies are governed by the Civil and Commercial code.

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Private Limited Companies

Private Limited Companies in Thailand have the same basic characteristics as those in Western countries. The most common form of establishing a corporate is to set up a Limited Liability Company.

Management

A Limited Liability Company will be managed by a Board of Directors.
The number of Directors is determined by the Shareholders’ meeting and there is no statutory minimum requirement.
Foreigners can be appointed as Directors
However, for companies which have received permission to conduct business under list 2 of the Foreign Business Act, at least two fifths of the Directors should be Thai nationals.
For a company established under the Thai-US Treaty majority of the Directors should be American or Thai nationals.

Investment capital requirements

There are no minimum or maximum share capital requirements

A minimum of three shareholders should be present at all times. Under certain circumstances a Private Limited Company may be fully owned by foreign nationals. However, for business activities restricted to Thai nationals under the Foreign Business Act, foreign participation is restricted to 49% of share capital. The 49% foreign ownership may exceed or maybe exempted if a Foreign Business License is granted. Minimum capital, transfer of technology and reporting requirements may vary based on the Foreign Business License.

Accounting/auditing requirements

Directors must arrange for an annual general meeting to obtain shareholder approval of the company’s audited financial statements within 4 months from the end of the fiscal year
Directors must file the audited financial statements, including the shareholder list to the Company Registrar within 1 month after holding the shareholders meeting.
Financial statements must be audited by and subject to the opinion of a certified auditor.

Steps that should be taken to register a Private Limited Company:

1. To establish a Private Limited Company there must be at least 3 promoters signing together in order to prepare and register the Memorandum of Association.

Initially a company name should be reserved. It takes up to 2-3 business days to reserve a company name. To reserve a company name, the company can either submit a signed Name Reservation form to the Department of Business Development of the Ministry of Commerce or fill in a Name Reservation form and submit it through the Department of Business Development’s website. Two alternative names should also be provided in case there is a conflict in the name selected by the company.

*Upon receiving the shares, the director must register the company within 3 months from the date of the company’s first meeting.

Promoters should possess the following qualifications:

Be an ordinary person (should not be a juristic person)
Be at least 12 years of age
Must purchase at least 1 share

The following information is used to register the Memorandum of Association:

Company’s name (the name that was reserved)
Location of the head office (Province)
Objective of the company
Registered capital must be divided equally among all the shares (Share price per share must be at least 5 Baht)
Name, age, occupation, address and number of shares that the reserved
Name, age and address of two witnesses

2. Once the Memorandum is registered, the following actions must be taken.

Every promoter must purchase the reserved shares
Once all the shares are reserved, the promoters must hold a statutory meeting for all the subscribers.

3. Promoters shall handover the business to the Directors

4. Directors shall collect the share capital from the promoters and subscribers.

Such payment should be atleast 25% of the share capital.

5. Once the share capital collection is complete, the authorized Director must prepare the request for registration of company’s establishment and submit the form to the registrar. The request must be submitted to the registrar within 3 months from the date of the company’s statutory meeting.

If the following steps can be performed within the same day, then the promoter can prepare the Memorandum and the Director can register the Memorandum. Thus the company can be established on the same day.

1. All the shares that were reserved should be bought by the respective parties so that the company can be registered

2. Arrange a statutory meeting to establish the company according to the Civil and Commercial code

3. Personnel who set up the company shall assign all affairs to the Director

4. Director should request the personnel who reserve to buy shares and pay such funds according to the Civil and Commercial code 1110.

Registration

Registration is twofold.

1. Registering the Memorandum

2. Registering the establishment

Registration procedure

To register the establishment, the personnel who set up the company or the company’s director shall request to verify and reserve the company’s name. Upon reserving the name, a request for the registration of memorandum of association will be submitted within 30 days by reserving the name in person or via www.dbd.go.th

1. Prepare the request for registration and other attachments and submit to the Registrar

2. Pay the fee

3. Obtain the certificate of registered transactions

4. Receive the certificate of registration

Time restrictions for setting up a Limited Liability Company

Request for registering the company’s establishment-must be submitted within 3 months from the date of the company’s establishment
Request for registering new directors-must be submitted within 14 days from the appointment of the directors

Fees for registering a Limited Liability Company

5. Registering the Memorandum of Association 500 – 25,000 Baht

6. Register the establishment 5,000 – 250,000 Baht

7. Registering for tax documents

A tax ID card and a number must be obtained from the Revenue Department within 60 days from the date of incorporation. For foreign companies, a tax ID card and a number must be obtained from the date it initiates business activities in Thailand.

8. Registering for an employer account under the Social Security Act

An employer account must be established within 30 days from the start of employment. The registration process would normally take 1 day.

Public Limited Companies

Investment capital requirements

There is no minimum capital requirement. However, each share must have the same par value
The Promoters must subscribe to at least 5% of the total share capital and must maintain such shares for 2 years from the date of registration
The Securities and Exchange Commission (SEC), compliant with the SEC Act, is responsible for approving the offering of shares and supervision of the Stock Exchange of Thailand (SET)

Management

Must have at least 5 Directors and at least half of the Board of Directors must have a registered address in Thailand.
At least 50% of the Promoters must be residents of Thailand.
A Limited Liability Company will be managed by a Board of Directors.
Foreigners can be appointed as Directors
For companies which have received permission to conduct business under list 2 of the Foreign Business Act, at least two fifths of the Directors should be Thai nationals.
For a company established under the Thai-US Treaty, majority of the Directors should be American or Thai nationals.

Accounting/auditing requirements

Directors must arrange for an annual general meeting to obtain shareholder approval of the company’s audited financial statements within 4 months from the end of the fiscal year
Directors must file the audited financial statements, including the shareholder list to the Company Registrar within 1 month after holding the shareholders meeting.
Directors should publish the balance sheet in a newspaper (public media) for at least 1 day within 1 month from the date on which it was approved at the Shareholders’ meeting.
Financial statements must be audited by and subject to the opinion of a certified auditor.

Incorporation process

1. Corporate name reservation

To reserve a company name, the company can either submit a signed Name Reservation form to the Department of Business Development of the Ministry of Commerce or fill in a Name Reservation form and submit it through the Department of Business Development’s website. Two alternative names should also be provided in case there is a conflict in the name selected by the company.

It takes up to 2-3 business days to reserve a company name.

Once the selected company name is approved, the corporate name reservation will be valid for 30 days.

2. File a Memorandum of Association (MOA)

After the name reservation has been approved, the MOA must be submitted to the Department of Business Development of the Ministry of Commerce.

For a Public Limited Company the MOA must include at least the name of the company, purpose of the company, province in which the company will be located, registered capital, number of share, and the names, date of birth nationalities and addresses of the promoters and the number of shares each of the promoters has subscribed.

There must be at least 15 promoters to register the MOA and prepare the prospectus to buy all the shares specified by the MOA. Promoters should be at least 20 years of age. The promoters of Public Limited Company must be among the company’s initial shareholders.

3. Convene a statutory meeting

Once the shares subscribed reaches the number specified by the prospectus (not less than 50% specified by the Memorandum of Association) a statutory meeting should be convened. The following would be determined during the meeting.

Adoption of Articles of Association
Ratify any contracts entered into and expenses incurred by the promoters
Finalise the remuneration, if any, to be paid to the promoters
Finalise the number of shares, if any, to be issued
Finalise the number of ordinary or preference shares to be allotted as fully paid or partly paid up capital
Appointment of the initial directors and auditors

After the statutory meeting, the promoters should hand over all business matters to the directors of the company.

4. Registration

Within 3 months after holding the statutory meeting, the directors must register the company.

Time restrictions for setting up a Public Limited Liability Company

Submit the prospectus to the registrar within 15 days from the date the prospectus is submitted to the Securities and Exchange Commission.
Promoters should convene a statutory meeting when the number of subscribed share has reached the number specified in the prospectus (must not be less than 50% of the number of shares in the MOA) within 2 months from the date on which the subscribed number of shares reach the specified number and no later than 6 months from the date on which the MOA is registered.
Board of Directors should request for the company’s registration within 3 months from the date of establishing the company

Fees for registering a Public Limited Liability Company

1. Registering the Memorandum of Association 1,000 – 25,000 Baht

2. Register the establishment 1,000 – 250,000 Baht

*However, if the company is specified as “foreign” under the Foreign Business Act, the following rules shall apply

Engages in business activities specified by the Foreign Business Act, the minimum registered business capital would be greater than 25% of the estimated average annual operating expenses, calculated over a 3 year period, and not less than 3 million Baht.
If the company does not engage in activities specified by the Foreign Business Act, minimum registered capital should be 2 million Baht.

Registering for tax documents

Registering for an employer account under the Social Security Act

An employer account must be established within 30 days from the start of employment. The registration process would normally take 1 day.

Branches of Foreign Companies

Foreign companies may carry out business operations in Thailand through a branch office. Such branch offices are subject to legal and tax regulations in Thailand. There is no special requirement for foreign companies to register their foreign branches in Thailand to carryout business operations. However, most business activities must adhere to the respective regulations (VAT registration, taxpayer identification card, Commercial Registration Certificate, Foreign Business License etc.)

Branches of Foreign Companies are considered as foreign entities and maybe required to apply for a Foreign Business License under the Foreign Business Act.

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Investment capital requirements

Minimum investment capital must be greater than 25% of the estimated average annual operating expenses calculated over a 3 year period, but not less than 3 million Baht.

Once the Branch Office receives approval to commence business operations, the minimum capital must be remitted to Thailand for the commencement of business operations.

First 25% of minimum investment within first 3 months
Another 25% of minimum investment within first year
Another 25% of minimum investment within second year
Last 25% of minimum investment within third year

Management

At least one person responsible for operating business operations in Thailand must be domiciled in Thailand.

Accounting/auditing requirements

Branch office is required to maintain accounts only relating to the branch in Thailand.
Accounts and financial statements must be prepared to submit to the Department of Business Development for each accounting period.
The Manager must submit a copy of the financial statements to the Registrar no later than 150 days from the end of the fiscal year. Approval of the shareholders is not required.
Financial statements must be audited by and subject to the opinion of a certified auditor
Audited financial statements certified by an authorized auditor should be submitted to the Revenue Department and to the Commercial Registrar for each accounting period.

Auditing requirements specify that audited financial statements of juristic companies must be certified by an authorized auditor and be submitted to the Revenue Department and to the Commercial Registrar for each accounting year.

Tax regulations:

Branch is subject to Thai corporate tax of 20% on income derived from its business operations in Thailand
Must apply for a tax payer identification card and VAT certificate (if required)
Must file annual corporate income tax returns with the Revenue Department

Requirements to carry out reserved business activities:

Obtain a foreign business license
Adhere to minimum capital requirements, transfer of technology and reporting requirements attached to the Foreign Business License.

Fees for registering a Branch of a Foreign Company

Application fee 2,000 Baht
Government fee 20,000 – 250, 000 Baht

Representative Offices of Foreign Companies

Must have the following 3 characteristics:

Established in accordance with the Foreign Law with an office in Thailand to operate the services to the head office or the affiliated company or the group of companies in foreign countries
Provides services to the head office, affiliated company or group of companies without receiving income for the services rendered. However, a Representative Office can receive funds to cover expenses.
Has no authority to receive purchase orders or to offer for sale or to negotiate business deals with any person or juristic person.

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Scope of business activities should be limited to the following 5 categories.

Locating sources of goods and services in Thailand on behalf of the head office
Managing quantities of goods purchased in Thailand by the head office
Providing advice and assistance relevant to goods and services sold to agents or consumers in Thailand
Disseminating information on new goods and services to the head office
Reporting on Business developments in Thailand to the head office

Investment capital requirements

Minimum investment capital must not be less than 25% of the estimated average annual operating expenses calculated over 3 years, but not less than 3 million Baht.

Requirements to remit minimum capital are as follows.

First 25% of minimum investment within first 3 months
Another 25% of minimum investment within first year
Another 25% of minimum investment within second year
Last 25% of minimum investment within third year

Management

At least one person responsible for operating business operations in Thailand must be domiciled in Thailand.

Fees for registering a Representative Office of a Foreign Company

Application fee 2,000 Baht
Government fee 20,000 – 250, 000 Baht

Tax regulations

Obtain a corporate tax identification number
Submit income tax returns to the Revenue Department and Department of Business Development
All individuals and local staff must obtain taxpayer cards

*A representative office is not subject to Thai taxation since such representative office is understood to be receiving a subsidy from the head office to meet its expenses in Thailand and such gross receipts are not classified as revenue to be included in arriving at income tax payable by a juristic person.

International Headquarters

On May 1, 2015 Thailand introduced the International Headquarters scheme. It replaced the Regional Operating Headquarter scheme that expired in 15 November 2015.

Scope of business activities:

Managerial/technical services
Supporting services such as procurement, research and development. Marketing and sales promotion etc.
Financial management
International trading centers (ITC)

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An associated enterprise refers to companies or partnerships which are related to international headquarters and includes:

A company/partnership which holds direct or indirect shares in the International Headquarters of not less than 25% of total capital
A company/partnership in which the company/partnership is a direct or indirect shareholder or partner with not less than 25% of total capital
A company/partnership which has power to control or supervise the management and operation of International Headquarters
A company/partnership in which International Headquarters has the power to control or supervise the operation and management
A company/partnership in which the company or partnership has the power to control/supervise the operation and management.

Investment capital requirements

The paid up registered capital must not be less than 10 million Baht.

Management

Not specified

Accounting/Auditing requirements

Must prepare financial statements for each accounting period
Financial statements must be audited by and subject to the opinion of a certified auditor
Audited financial statements certified by an authorized auditor should be submitted to the Revenue Department and to the Commercial Registrar for each accounting period.

Tax regulations

Tax incentives offered by the Revenue Department subject to the following conditions:

Supervise foreign branch offices or associated enterprises in not less than one country
Paid up registered capital should not be less than 10 million Baht on the last day of the accounting period
Total business spending should not be less than 15 million Baht per annum

Corporate Income Tax (CIT):

CIT is offered for 15 accounting periods from the date of approval by the Director General of the Revenue Department.

Personal Income Tax (PIT):

PIT is offered to expatriates at specialist/executive level at a reduced rate of 15%

Specific Business Tax (SBT):

Exemption for the revenue from lending to Associated companies

Withholding tax (WHT):

Exemption on dividends paid by the International Head Quarters to corporate shareholders in foreign countries and interest paid by the International Head Quarters to corporate lenders in foreign companies.

*Other incentives are provided by the Board of Investment (BOI) subject to the following conditions.

Supervise associated companies in foreign countries or its foreign branches in atleast one country
Paid up registered capital must not be less than 10 million Baht

Joint Ventures

A Joint Venture is a Thai Limited Liability company owned by 2 or more companies. According to Thai law a Joint Venture is not a legal person. Although it can engage in business, it cannot be registered. However, the Revenue Department recognizes a Joint Venture as a juristic person for taxation purposes and therefore should apply for tax identification card. Also, a Joint Venture should register for VAT if it qualifies under the requirements of the Revenue code.

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Critical elements of a Joint Venture (as per the Revenue code and the Revenue Department):

At least one of the Joint Venture partners must be a juristic entity
A joint investment in the Joint Venture
Sharing of profit or loss under the Joint Venture agreement
Partners should have joint liability to third parties related to the Joint Venture

Investment capital requirements

Not specified

Management

Not specified

Accounting/Auditing requirements

Must prepare financial statements for each accounting period
Financial statements must be audited by and subject to the opinion of a certified auditor
Audited financial statements certified by an authorized auditor should be submitted to the Revenue Department and to the Commercial Registrar for each accounting period.

Registration procedure

A foreign company that participates in a Joint Venture:

Should obtain a business license under the Foreign Business Act
Should create a branch office in Thailand
Should register the Joint Venture to obtain a tax payer identification card

Time taken to obtain a business permit and a taxpayer identification number:

8 – 10 weeks.

Cost: 20,000 – 250,000 Baht

Regional Offices

Refers to an office established by a transnational corporation in a country which does not include the country of its registered head office.

A regional Office can engage in the following business activities:

Managing business activities of branches and/or subsidiary companies on behalf of the head office located in the same region as the regional office.
Provide services to the branches of the head office and its subsidiary companies

Prohibited activities:

No income can be derived by provisioning the above mentioned services
Cannot accept a purchase order or make a sales offer
Cannot negotiate business arrangements

If the business activities undertaken by the Regional Office are included in the List 3 of the Foreign Business Act, then a foreign business license must be obtained from the Director General of the Department of Business Development.

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Investment capital requirements

Invested capital must be at least 25% of the average estimated expenses of the past 3 years but not less than 3 million Baht (as per the Foreign Business Act).

Management

Not specified

Accounting/Auditing requirements

Must prepare financial statements for each accounting period
Financial statements must be audited by and subject to the opinion of a certified auditor
Audited financial statements certified by an authorized auditor should be submitted to the Revenue Department and to the Commercial Registrar for each accounting period.

Registration procedure

Should obtain a foreign business license (based on the Foreign Business Act)

Fees for registering a Regional Office

Application fee 2,000 Baht
Registration fee 2,000 – 250,000 Baht

Tax regulations

Should obtain a corporate tax identification number
Should submit tax returns
All staff are required to obtain tax payer cards and submit personal income tax

Outsourcing Employment Through a GEO Employer of Record Service

Whether to incorporate in Thailand, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.

If the company intends to have staff in Thailand they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where

the company is looking to setup an office quickly
the company wants to work within a defined budget
the company wants to limit its initial commitment in Thailand
the company needs help with tax, employment, immigration and payroll compliance in Thailand

The complexity of employment regulations in Thailand makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.

Shield GEO provides a comprehensive service in Thailand allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Thailand.

Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Thailand. Read more about outsourced employment through Shield GEO.