Key Legal Requirements for Company Incorporation in Thailand for Foreign SMEs
- gentlelawlawfirm
- Sep 4, 2025
- 3 min read
Key Legal Requirements for Company Incorporation in Thailand for Foreign SMEs
Introduction
Establishing a company in Thailand is a critical step for foreign small and medium enterprises (SMEs) wishing to legally operate and expand in the Thai market. However, company incorporation in Thailand for foreign SMEs involves strict legal requirements and procedural steps under Thai corporate law.
This comprehensive guide by GENTLE LAW IBL explains the key legal requirements, procedural steps, and best practices to ensure a smooth and compliant company incorporation tailored to foreign SME investors.
Understanding Company Incorporation in Thailand for Foreign SMEs
Incorporating a company in Thailand means creating a legal entity recognized under the Civil and Commercial Code and registered with the Department of Business Development (DBD). Foreign SMEs often opt for a Private Limited Company (PLC) structure due to its flexibility and limited liability.
Key Legal Requirements
1. Minimum Shareholders and Directors
At least 3 shareholders are required; these can be individuals or juristic persons.
A minimum of one director is mandatory; the director can be a foreigner.
2. Registered Capital
The minimum registered capital generally is 3 million THB, but foreign business licenses or specific activities may require higher capital.
For foreign ownership over 49%, capital requirements must comply with the Foreign Business Act B.E. 2542 and related regulations.
3. Foreign Shareholding Restrictions
Foreigners may own up to 49% of shares unless granted a Board of Investment (BOI) promotion or under a treaty exempting foreign ownership restrictions.
For businesses restricted by the Foreign Business Act, a foreign business license is required.
4. Company Name Reservation and Registration
The company name must be reserved with the DBD and comply with naming regulations.
Articles of Association must be drafted in Thai and comply with statutory requirements.
5. Documentation and Filing
Key documents include Memorandum of Association, Articles of Association, shareholder meeting minutes, and a list of shareholders.
Registration must be filed with the DBD, and tax registration with the Revenue Department follows.
Step-by-Step Process for Incorporation
Name Reservation: Submit proposed company names to the DBD for approval.
Filing Memorandum of Association: Include company name, business objectives, capital, and shareholders.
Convene Statutory Meeting: Approve Articles of Association and appoint directors.
Register Company: File documents with the DBD to obtain the company registration certificate.
Register for Tax and VAT: Register with the Revenue Department within 60 days if applicable.
Legal Risks and Compliance Tips
Ensure compliance with Foreign Business Act restrictions to avoid penalties or forced restructuring.
Properly document shareholder agreements to prevent future disputes.
Avoid under-capitalization that may delay work permit or visa applications.
Maintain up-to-date statutory books and filings to comply with the Department of Business Development.
Why GENTLE LAW IBL Is Your Ideal Partner?
Comprehensive one-stop service from name reservation to tax registration.
Deep expertise in foreign investment law and BOI promotions.
Tailored legal and business advice to suit your SME’s unique needs.
Dedicated liaison with Thai authorities to expedite approvals.
Conclusion & Call to Action
Successfully navigating company incorporation in Thailand for foreign SMEs requires detailed knowledge of Thai law and procedural expertise. To avoid costly delays and legal risks, working with trusted legal advisors is essential.
Contact GENTLE LAW IBL today to ensure your Thai company is incorporated legally, efficiently, and aligned with your business goals.
