Starting a business in Thailand can be a daunting prospect, but get it right and it can be a profitable and enjoyable endeavor. There’s an abundance of opportunity in the industrial and service sectors, and in import and export.
Thailand is the second-largest economy in Southeast Asia after Indonesia, and recognized by the World Bank as “one of the great development success stories” in social and development indicators.
But before you even consider this adventure, you need to arm yourself with the basics of Thai business law and regulation.
There’s a ton of incorrect information out there online, and indeed to be heard next to a mumbling expat at 2am on a barstool in a back alley of Bangkok, with all the horror stories from a horrible business man.
Save hassle and loads of stress, choose experienced experts each time
Here is everything you need to know in one handy post:
There are two types of business registrations:
- Commercial registration by a regular person
- Company registration by a legal entity
For the commercial registration by a regular person:
This type is more suitable for smaller-scale businesses with a single owner, offering straightforward products or services. The advantage of this registration is that the owner is not required to perform accountancy or to submit a financial statement. Owners will have more freedom in managing and controlling their businesses. The disadvantage, however, is that sometimes it can hold less credibility than being a legal entity, hence more challenging to request for loans from the banks. Therefore, this registration is advised for businesses in their starting phase.
For the company registration by a legal entity:
This type is more suitable for more mature and more structured businesses with multiple owners (more than 3) and shareholders. This registration results in a ‘company’ with a status of a legal entity, and it will effectively be required by law to perform accounting, pay corporate taxes, and managing social security for its employees, for example. The advantage lies in that the corporate taxes which it has to pay will not exceed 20% of your net profit, which is a significantly lower rate than the personal taxes of up to 35%. This allows the business to reinvest its remaining profits to grow itself further, or to withdraw them as appropriate.
There are three subtypes when registering as a company, and in effect, a legal entity:
- Ordinary partnership (having 2 shareholders or more)
- Limited partnership (having 2 shareholders or more)
- Company limited (having 3 shareholders or more)
The legal experts of Actio Global Consultancy Co., Ltd. are there to give you the best advice in your situation. Moreover, the necessary licenses (export, import, cannabis etc.) can be arranged by our experts.
Book a free initial consultation with Actio Global Consultancy today and find out what we can do for you in your specific situation.
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