Business
Thailand — Business: Company Formation
Foreigners forming a business in Thailand most commonly register a Thai Limited Company through the Department of Business Development (DBD). Because the Foreign Business Act restricts many business activities to majority-Thai-owned companies (foreign ownership above 49% is restricted in most service/retail/most sectors absent a Foreign Business License or BOI promotion), most foreign-founder companies use either a Thai-majority shareholding structure (with genuine, not nominee, Thai shareholders) or seek BOI promotion / a Foreign Business License to permit majority or 100% foreign ownership in eligible activities. BOI-promoted companies in targeted sectors (technology, manufacturing, regional headquarters) can obtain 100% foreign ownership, corporate tax holidays, and streamlined work permit/visa processing via the BOI's One Stop Service.
Why this matters
The Foreign Business Act's ownership restrictions are the single biggest structural decision point for any foreign entrepreneur in Thailand — the choice between a Thai-majority company, a Foreign Business License, and BOI promotion has major implications for control, tax, and visa/work permit ease.
Key facts
- The Foreign Business Act generally restricts foreign ownership to 49% or below in most service, retail, and many other business categories absent special approval.
- BOI (Board of Investment) promotion allows 100% foreign ownership in eligible targeted sectors, plus corporate tax holidays and simplified visa/work permit processing.
- A Foreign Business License can permit majority/100% foreign ownership outside BOI-promoted sectors but requires case-by-case Ministry of Commerce approval.
- Minimum registered capital for a foreign-majority-owned company seeking a work permit is generally THB 2 million per foreign employee (though rules and exceptions vary by structure).
- Using Thai nominee shareholders to disguise majority foreign control is illegal under the Foreign Business Act and subject to enforcement.
Steps
- Choose the ownership structure — Decide between a Thai-majority company, BOI promotion for 100% foreign ownership in eligible sectors, or a Foreign Business License application.
- Reserve the company name — Reserve a unique company name with the DBD before proceeding to registration.
- File the Memorandum of Association and register — Submit incorporation documents, shareholder details, and registered capital information to the DBD.
- Obtain Tax ID and VAT registration (if applicable) — Register the new company with the Revenue Department for a Tax ID, and for VAT if turnover will exceed the threshold.
Costs
- Minimum registered capital per foreign employee (for work permit purposes): THB 2 million
Timelines
- Standard DBD company registration: 1-2 weeks once documents are complete
- BOI promotion application processing: several weeks to a few months depending on activity
Required documents
- Reserved company name confirmation
- Memorandum of Association and company registration forms
- Shareholder and director identification documents
- Registered office address documentation
Common mistakes
- Using Thai nominee shareholders to circumvent the Foreign Business Act's ownership restrictions — this is illegal and has led to enforcement action.
- Underestimating the minimum registered capital requirement needed to sponsor a foreign employee's work permit.
- Not exploring BOI promotion for an eligible activity before defaulting to a Thai-majority structure, missing out on tax holidays and 100% ownership.