Setting up your Thai company | Initial Thoughts
Setting up your own company is always a big decision. This is even more so when you setup a company in a foreign country. Business registration in Thailand is a different process to most Western countries.
The reason for this is that Thai law generally tries to protect Thai people and land. However, as with most laws and processes, there are exceptions and workarounds.
Who will your partners be?
Unlike in the UK, where it is easy to register as a sole trader or independent contractor, in Thailand you have to form a company. Partnerships are available, but often the protection for investors isn’t as good as with a PLC. In this case, PLC stands for private limited company.
However, to create a PLC company, you must have at least three people involved. They must be shares holders too. This means that you need to have investors, or a lawyer that can arrange this for you.
Thai Business Restrictions
As I mentioned at the start, Thailand has laws to protect Thai people. These laws also include restricted areas of business for foreigners. However, your company can actually be registered as a Thai entity.
What does this mean? Well, simply that if 51% of the shares registered are Thai owned, then the company had similar rights to a Thai person. This means that it can buy land and even trade in the restricted business areas.
To do this, it is best to talk with a startup consultant. There are ways to protect foreign investors, while allowing the company to be registered as Thai. Such things as preferential shares that hold more voting power, contacts showing repayment of investment back to share holders, and sole foreign director/signatories are all options.
This is something that many people worry about. However, with a PLC, liability is greatly restricted, if not protected. With a standard registration, a person is only liable for the value of the shares that they own. Liability can’t go beyond this value.
However, for most businesses, it is unlikely that you will ever have a problem. Many business types can’t actually cause serious injury or damage to someone’s income/business, and hence, are very unlikely to ever have an issue.
As with any country, the key is to have good safety and risk management, combined with good insurance. A decent business insurance policy will pay any possible claims and will normally also handle the legal side, as to reduce their own expenses.
This way, you can protect yourself from potential issues before they arise.
The registration process
Any good lawyer can handle this for you. There are numerous steps, but most are fairly straight forward, so long as all investors and signatories are available to sign papers and if necessary, to visit offices (normally not required).
For more informations about Thailand Market Entry procedures and registration processes, you may check out the options here
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