Doing Business in Chiang Mai
If you are interested in doing business in Chiang Mai, you can set up your business in a number of ways. If you have an international business, you may wish to set up a Thai branch office, Thai representative office or Thai regional office in Chiang Mai.
Take advantage of local business opportunities and possible tax advantages in Chiang Mai today by speaking to a lawyer in Chiang Mai. This is a listing of the options in Thailand when it comes to business registration in Thailand.
Sole Proprietorship in Thailand
Although foreigners are generally prohibited from conducting business in Thailand as a sole proprietor, U.S. citizens who register with the Thai Department of Business Development under the U.S. – Thailand Amity Treaty are allowed to run a sole proprietorship in most industries. Siam Legal provides the legal services you need to register a sole proprietorship under the Amity Treaty.
Partnerships with a main office in Chaing Mai can be registered with the Commercial Registration Office in Chiang Mai. The registration fee is assessed as 1% of registered capital and ranges from 1,000 – 5,000 THB.
Ordinary Partnerships in Thailand establish a business with a minimum of two owners. Ordinary partnerships are not required to register with the Commercial Registrar, but often do if they wish to be taxed as a juristic person, and are therefore required to issue an annual financial statement and pay corporate income taxes. Otherwise, income must be reported on the partner’s individual tax returns.
Thai LLP (Limited Liabilty Partnership)
A Thai LLP is a partnership with two types of partners. General Partners are allowed to manage the business, and are fully liable for the partnerships financial obligations. Limited Partners are not allowed to manage the business, but their liability is limited to the amount of capital they contributed. Thai LLPs must be registered and are taxed as corporate entities. LLPs must report a financial statement every 12 months.
Limited Companies are the basic Thai corporate structure. They are governed by the Thai Civil and Commercial Code. Private Limited Companies are not eligible for public stock offerings but may be converted to Public Limited Companies if they wish to offer stock publicly. Every Private Limited Company must register their Memorandum of Association (similar to Articles of Incorporation) and Articles of Association (similar to by-laws).
Starting a Business in Thailand
Thai law requires at least 3 shareholders at all times. Shareholder liability is limited to the unpaid amount of their shares’ par value. All shares must be subscribed to at the time of incorporation, but only 25% of shares must be paid up. The minimum share price is 5 THB. Some shares may have preferential voting power, but every share must have at least one vote. If foreigners own more than 49% of the shares, the company is subject to the restrictions of the Alien Business Act.
Limited companies must follow strict financial requirements. Annual financial statements must be certified by an auditor, approved by the shareholders, and filed with the Commercial Registration Department and the Revenue Department. Small limited companies may be exempt from this requirement.
A company must have three promoters before it can be registered. Each promoter must have at least one share in the company and be at least twenty years of age, but do not have to be Thai citizens. Siam Legal provides the legal services you need to register a private limited company and apply for a tax ID card from the Revenue Department, and a Value Added Tax Certificate if needed.
Speak to a lawyer in Chiang Mai today for more information about business registration in Thailand and how best to take full advantage of all the options available.
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