Market Entry Requirements
The most important requirement to remember is Thailand’s Foreign Business Act (FBA). When considering company formation in Thailand, understanding market access rules under Thailand’s FBA is essential. Business activities for foreign investors fall into three categories:
List 1: Absolutely Prohibited Businesses
- Industries strictly off-limits to foreigners, including newspapers/broadcasting, rice farming, land trading, Buddha image/alms bowl production.
List 2: Restricted Businesses (National Security/Culture/Environment)
- Activities like firearms production, antiques trading, mining, and timber processing. Foreign operation requires government approval (extremely difficult).
List 3: Businesses Where Thais Lack Readiness to Compete
- Most common restricted sector. Includes services (accounting, legal, construction, advertising, hospitality management, travel agencies, F&B), wholesale/retail (capital/size restrictions), and select manufacturing.
Choosing Your Thailand Business Entity
When deciding the type of business entity to form in Thailand, there are some other important factors to be considered for foreign investors:
- Investment Amount: Minimum capital varies by entity type and BOI eligibility.
- Control Requirements: Need for majority stake (>50%) or 100% ownership?
- Incentives: Seeking tax exemptions, land ownership rights, or other privileges?
- Operations Scope: Conducting only non-revenue activities?
For a better understanding of the business types in Thailand, Hongda lists the common company forms in Thailand.
How to Register Your Thailand Entity
1. Thailand Private Limited Company
Required Documents:
- Company Name: 3 reserved Thai names
- Memorandum of Association (MOA): Notarized document detailing capital, scope, shareholders/directors
- Shareholder Docs: Foreigners: notarized passport + embassy legalization; Thais: ID copy
- Registered Address Proof: Title deed (Nor Sor 3 Gor) or landlord-signed lease
- Capital Proof: Bank certification (≥25% paid-up capital, min. THB 500K)
- Director Info: Passport copy + Thai work address (non-Thai: visa page)
2. BOI Promoted Company
Required Documents:
- BOI application form + project plan (tech/employment/export analysis)
- Feasibility study: 3-year financial forecast + equipment list
- Parent company docs: certified certificate of incorporation + audited reports
- Standard company registration documents
- EIA report (if manufacturing)
3. Representative Office in Thailand
Required Documents:
- Parent company’s certificate of incorporation (legalized by Thai embassy)
- Parent’s bank statement (≥USD 50,000 balance)
- Power of Attorney appointing chief representative (notarized)
- Non-revenue activity plan (e.g., market research, QC)
- Office lease (≥1 year)
4. Branch Office in Thailand
Required Documents:
- Foreign Business License (FBL) from Commerce Ministry + parent-branch linkage proof
- Parent’s board resolution approving branch (embassy-legalized)
- Capital proof: ≥THB 3M remitted from overseas
- Branch MOA (scope matching parent’s)
- Tax agent appointment letter
Post-Registration Compliance Essentials
After incorporation, your Thailand entity must fulfill these ongoing obligations:
1. Financial Statement Audit
All companies must submit audited financial statements annually within 120 days of their fiscal year-end. BOI-promoted companies have an additional obligation to file a separate BOI annual report.
2. Corporate Tax Filing
Entities are required to make semi-annual tax prepayments in September and March. The final annual tax return must be filed within 150 days after the fiscal year closes. Even companies operating at a loss must submit a tax filing.
3. VAT Registration and Filing
Registration for Value Added Tax (VAT) becomes mandatory when annual revenue exceeds THB 1.8 million. Registered businesses must file monthly VAT returns by the 15th of the following month.
4. Withholding Tax Obligations
Companies must deduct withholding tax at the time of payment and submit returns by the 7th of the subsequent month. This applies to:
- Salaries (progressive rates 0-35%)
- Service fees (3% for individuals / 15% for foreign companies)
- Overseas payments to non-residents
5. Foreign Exchange Reporting
Transactions equivalent to USD 50,000 or more require submission of a Foreign Exchange Transaction (FET) form to the Bank of Thailand, specifying the purpose of funds.
6. Business License Renewal
All entities must annually renew their business registration with the Department of Business Development (DBD) by April 30. This process includes:
- Reporting any changes in shareholders or directors
- Paying an annual fee equivalent to 0.05% of registered capital
7. BOI Compliance Reporting
BOI-promoted companies must:
- Submit quarterly progress reports on investment activities, employment, and export performance
- Obtain pre-approval for duty-free equipment imports
Additional Critical Capital Rule for Foreign Entities:
- Capital must be used for actual operations (retain payment records).
- No reduction of paid-up capital within 2 years before dissolution.
