THAILIVING LAW
BUSINESS & CORPORATE LAW
Setting up a Thai company starting and forming a limited company in Thailand
The process of setting up a Thai limited company and steps taken in order to achieve and complete the incorporation process, from the reservation of a business name till the certificate of incorporation of the company, can under the new company formation rules be completed in a few days. The registration of a company is processed by the DBD or Department of Business Development in Thailand.
In short, the following steps must be taken in the setting up process of incorporation of a limited company.
Promoters
To form a limited company at least 3 promoters (future limited company’s shareholders) are required who should be natural persons (at least 12 years old) and must subscribe to buy at least 1 share.
Steps in short
The formation steps are registered with the Department of Business Development Provincial District office. The registration of a business company name
- The ‘memorandum of association is filed contains the reserved company’s name
- address and location of head officecompany business objectivescompany’s registered capital divided into shares (share’s value must be at least 5 Baht)
- details of of the promoters setting up the company
- details of 2 witnesses
The ‘articles of association are filed
A ‘statutory meeting’ is held
Tax ID
Company Law accounting and corporate income tax
The basic accounting principles practiced in the Europe and the United States are accepted in Thailand. The Institute of Certified Accountants and Auditors of Thailand is the authoritative group promoting the application of generally accepted accounting principles.
Auditing standards conforming to international auditing standards are, to the greater extent, recognized and practiced by authorized auditors in Thailand. Any accounting method which is adopted by a company must be used consistently and may be changed only with approval of the Revenue Department.
Corporate Income Tax
Thai corporation tax (or corporate income tax) refers to as the percentage of the profits of registered companies, i.e. tax levied on the profits made by companies or associations. A newly established company in Thailand is liable for income tax and must obtain a tax I.D. card and number for the company from the Thailand Revenue Department within 60 days of incorporation or the start of operations.
If it is expected that its gross income will exceed 1.8 million baht per annum it must register for Value Added Tax within 30 days of the date, they reach 1,8 million baht in sales.
A newly established company in Thailand must hire a certified accountant. Companies must keep books and follow accounting procedures specified in the Civil and Commercial Code, the Revenue Code, and the Accounts Act. Documents may be prepared in any language, provided that a Thai translation is attached. All accounting entries should be written in ink, typewritten, or printed. A newly established company or partnership should close accounts within 12 months from the date of its registration. The director is responsible for the regular keeping of books and documents in accordance with the law and must file balance sheets and audited accounts every year with the Revenue Department and Ministry of Commerce.
In general, the basic accounting principles practiced in Europe and the United States are accepted in Thailand.
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