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Incorporation of limited company in Thailand


Presently, we are in the era that all countries have been connected by global economic where numerous investors are eager to seek for new opportunities to expand their business in developing countries.  Since Thailand is one of the most fabulous options for investment, I hope that this article may provide the worldwide investors with knowledge pertaining to the company establishment in Thailand.

Number of shareholders

It seems to be a tiny issue.  However, it may cause complexity to the incorporation procedures.  According to Thai Commercial and Civil Laws, kindly note that it requires minimum 2 individual shareholders to become the company’s founders in order to incorporate the company meaning that juristic entity cannot be one of the founders but it is still allowed to become a shareholder of the company. 

Aliens (foreign juristic persons or individual person) are allowed to own the shares of the company at least 50% of the total or higher.  However, the status of the company will be deemed as a foreign company and the company’s business activities are limited, unless the foreign business licenses (FBL) is given to the company before operate its business in Thailand in compliance with Thai Foreign Business Act B.E. 2542.

Minimum capital

The minimum value of each share imposed by law is only 5 THB.  If the shares are held by the minimum numbers of the initial shareholders, it means that the company's minimum capital can possibly be 10 THB.  However, that rarely happens in reality.  I would like to suggest that the company should be formed with the sufficient capital for the business.

Director appointment?

By laws, the director of the company can be appointed or removed by the majority vote of the shareholders in the shareholder meeting. The one-third of the total directors must retire from the position in every year. However, the director who retires from the position can be re-appointed once more.

In the case that vacancy occurs in the board of directors otherwise than by rotation, the board of directors is able to fill up such vacancy. Nevertheless, the new director can retain his/her position in duration as the removed director was entitled to retain in the same.

Time frame for the company incorporation

Normally, the entire procedures of the incorporation can be completed within a day. Most of delay usually incurs from circulating documents for signature arrangement, requesting for balance certificate from bank, creating company's seal and negotiation for remuneration with auditor.

Rukphon Sungsianawatara
(Attorney at laws)
Email: rukphons@gmail.com
Tel: +66-95-390-8245

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