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  Thailand Company Registration
 
Business Registration is up due to Thailand's unprecedented economic growth over the years which has been attracting investors to Thailand and addressing the country's increasing market demands while hoping to maximize the return on their investments in the process. Foreign investors are flocking to Thailand because of strong government support and incentives, sufficient infrastructure, skilled and cost-effective workforce. Doing business in Thailand is also supported by well-defined policies geared towards liberalization and free trade, social and political stability and the country's strategic location in Asia. The same reasons why doing business in Thailand is one of the most attractive investment destinations in the world.

When doing business in Thailand, you have the choice of what type of business entity which you wished to establish depending on your organizational requirement. The following can be your options:

Partnership

Under the Civil and Commercial Code of Thailand, there are two types of partnerships: ordinary partnership and limited partnership.

Section 1025 of the Code defined ordinary partnership as a kind of partnership in which all the partners are jointly and unlimitedly liable for all the obligations of the partnership. On the other hand, a limited partnership as defined in Section 1077 is that kind of partnership in which there are: (1) one or more partners whose liability is limited to such amount as they may respectively undertake to contribute to the partnership; and (2) one or more partners who are jointly and unlimitedly liable for all the obligations of the partnership.

Company Limited

The Thai Limited Company is the most popular and appealing form of business organization among foreigners doing business in Thailand due to its flexibility. This type of business entity is most utilized in Thailand. This entity is similar to that of a Limited Liability Company (LLC) in the United States or Private Limited (Pte. Ltd.) in Singapore.

In a company limited, the company is owned by at least three shareholders and managed by at least one director. Section 1097 of the Civil and Commercial Code states that any three or more persons may, by subscribing their names to a memorandum and in compliance with the provisions of the Code, promote and form a limited company. The shareholders’ direct participation in company affairs is somehow limited as the directors are responsible for managing the company affairs and in the same manner, have fiduciary duties to the shareholders and the company.

Branch, Representative and Regional Offices

It is a common practice for multinational companies to establish a presence in Thailand but do not want to operate as a separate legal entity. The multinational company may want the Thailand office to function and operate as part of its head office overseas.
Under Thai law, branch, representative as well as regional offices are treated as extensions of the head office overseas and not as separate legal entities. Thus, these companies are foreign-owned and must comply with the requirements set under the Foreign Business Act.

Branch Office

A branch office structure is similar to that of a company limited structure. Like the company limited, a branch office can earn income in Thailand. Branch offices are likewise governed by the rules on foreign-held company limited. It is with issues concerning liability that a branch office and a foreign-held company limited structure may differ. For a company limited (foreign-owned), liability arising from the business operations or its employees is generally limited to the Thailand Company only. As for the branch office, liability arising from the actions of the business is also the liability of the head office overseas as the branch is merely an extension thereof.

Representative Office

The Representative Office is meant to provide support to the head office and engages in activities such as acquiring information of the source of raw materials, market research to report back to the head office, providing advice about the head office’s goods or services or offering news and information about new products or services of the head office.
In order to form a representative office in Thailand, at least one of the following purposes would need to be sought for the purposes of strictly the following “non-trading” activities:

1. Search and procuring information about the source of goods or services or raw materials in Thailand for the headquarters overseas;
2. Ensuing or checking the quality and quantity of the product ordered by the headquarters overseas;
3. Offer advice regarding products offered by the head office or affiliated companies to local distributors or consumers whereby, the product must have already been distributing in Thailand;
4. Disseminate news or updates regarding new products, upgrades or improved versions/formulas or services offered by the head office or its affiliated companies; and
5. Reporting the economic movement in Thailand to the headquarters.

Regional Office

Just like a representative office, regional offices are also not allowed to earn income. It is also strictly regulated to performing specific functions designated by statute on behalf of the head office overseas. A regional office is only limited to perform the following functions:
1. Communicating, coordinating and directing, on behalf of the head office, the operation of branches and affiliates that are in the region;
2. Providing services in consulting and management;
3. Training and personnel development;
4. Financial management;
5. Marketing control and sales promotion planning;
6. Product development; and
7. Services in research and development.

Doing business in Thailand can be very complicated and may take you several weeks to complete the process. This is mainly due to the registration procedures and the required documents and forms being in Thai. It follows that you need someone you can trust and who is able to communicate in Thai on your behalf to be able to successfully review your company registration. Arna Company can take care of the legal points of setting up your business thereby making sure that all the necessary requirements are met.




















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