Starting a Business in Thailand as a Foreigner: A Step-by-Step Guide

Thinking about starting a business in Thailand as a foreigner? You’re not alone. Thailand’s strategic location in Southeast Asia, favorable tax schemes, and welcoming culture make it an increasingly attractive destination for international entrepreneurs. But before jumping in, it’s critical to understand the legal requirements and procedures that govern foreign business ownership in Thailand.

This article provides a comprehensive, step-by-step guide tailored for foreign SME investors looking to legally and efficiently establish a business presence in the Kingdom.

Why Thailand Attracts Foreign Investors

Thailand offers an ideal business environment for SMEs because of:

• Competitive labor costs

• Well-developed infrastructure

• Government investment incentives (especially in BOI-promoted sectors)

• Access to the ASEAN market

• A growing middle-class consumer base

But Thailand also imposes restrictions on certain business activities through the Foreign Business Act (FBA) B.E. 2542 (1999). Foreigners must comply with specific rules and licensing requirements before operating.

Step 1: Choose the Right Business Structure

Foreigners commonly choose one of the following legal entities:

1.1 Thai Limited Company

• The most common structure

• Requires at least 3 shareholders

• Foreigners can own up to 49% of shares, unless exempted by law (e.g., via BOI or Treaty of Amity)

1.2 Representative Office

• For non-trading activities (e.g., market research, sourcing)

• Cannot earn revenue

• Ideal for feasibility studies before full operations

1.3 Branch Office

• Can earn income

• The foreign company remains fully liable

• Subject to Foreign Business License (FBL) under restricted categories

1.4 BOI-Promoted Company

• Allows 100% foreign ownership in eligible sectors

• Offers tax and non-tax incentives

• Requires project proposal and BOI approval

1.5 US Treaty of Amity Company

• Available to US citizens/entities

• Allows 100% ownership for most service businesses

• Must still register under Thai law

Recommendation: Most SMEs start with a Thai Limited Company and restructure later if needed. It’s flexible and scalable.

Step 2: Understand the Foreign Business Act (FBA)

The FBA categorizes businesses into 3 lists:

• List 1: Completely prohibited to foreigners (e.g., rice farming, land trading)

• List 2: Permitted only with Cabinet approval

• List 3: Permitted only with a Foreign Business License (FBL)

Workaround Options:

• Apply for a BOI promotion

• Use the US Treaty of Amity

• Appoint Thai majority shareholders (with caution regarding nominee structures, which are illegal)

Step 3: Company Registration Process

3.1 Reserve Company Name

• Submit 3 name choices to the Department of Business Development (DBD)

• Must be unique and not resemble existing names

3.2 File the Memorandum of Association (MOA)

• Includes company name, location, objectives, capital, and shareholders

3.3 Convene a Statutory Meeting

• Approve the Articles of Association

• Appoint directors and auditor

• Allocate shares and confirm capital payment

3.4 Register the Company

• Submit all documents to DBD

• Registration typically completed within 3–5 business days

Note: A minimum capital of 2 million THB is required if you plan to apply for a Work Permit as a foreign director.

Step 4: Register for Tax ID and VAT (if required)

• Obtain a Tax Identification Number from the Revenue Department within 60 days of incorporation

• Register for VAT if revenue exceeds 1.8 million THB/year or if engaging in VAT-sensitive sectors (e.g., exports, imports, digital services)

Step 5: Open a Corporate Bank Account

• Once the company is registered and has a company seal

• Most banks require all directors to be present

• Documents needed:

  
  

  • Certificate of Incorporation

  • MOA

  • List of shareholders

  • Company affidavit

  • Tax ID

Step 6: Hire Employees and Comply with Labor Laws

• Thailand has strong labor protections under the Labor Protection Act B.E. 2541 (1998)

• Ensure employment contracts are properly structured

• Register staff for social security within 30 days

• Maintain payroll and comply with minimum wage laws

Step 7: Apply for Work Permit and Visa

As a foreign director or employee, you must obtain:

• Non-Immigrant “B” Visa (from abroad or via in-country change)

• Work Permit issued by the Ministry of Labour

General criteria:

• Company must have 2 million THB paid-up capital per foreign employee

• Must employ at least 4 Thai staff per foreigner

Summary & Key Takeaways

Step

Description

1.

Choose the right business structure

2.

Check activities against the Foreign Business Act

3.

Register the company with the DBD

4.

Obtain Tax ID and VAT registration

5.

Open a corporate bank account

6.

Hire and register employees

7.

Apply for visa and work permit

Starting a business in Thailand is very doable — but the process must be legally sound. With a clear structure, compliant capital, and a properly staffed team, your company can thrive in one of Southeast Asia’s most dynamic markets.

GENTLE LAW IBL Can Help

At GENTLE LAW IBL, we specialize in helping foreign entrepreneurs establish, structure, and scale their business operations in Thailand — legally and efficiently.

From company registration to work permits, our bilingual team offers one-stop support tailored to your SME needs.

👉 Book a Free Online Consultation today and let’s get your business off the ground — the right way.