Registration of Thai companies, their management, financial reporting, shareholder rights, and dividends. The organization of company activities is regulated by the provisions of the Civil and Commercial Code of Thailand (CCCT). The law provides for partnerships and companies according to Article 1013 of the CCCT. Partnerships are related to residents.

As for foreigners, they can be shareholders in Thai limited companies (LTD) with a maximum share of 49% and can manage the company as a managing director, manager, or jointly with Thai directors, depending on the type of company’s activities and licensing.

The registration of companies is carried out in the Department of Business Development (DBD). The registration certificate of a Thai company issued by DBD contains information about the registration date, company name, registration number, registered capital, powers of directors, legal address, types of activities, information about auditing, and founders.

If licensing is required for certain activities, the company complies with the requirements of the relevant ministry, obtains the license, and then proceeds with the re-registration at DBD, adding the licensed activities.

Before registration, it is necessary to find a location, the address of which will be the legal address of your company, according to Article 1016 of the CCCT. Seek permission from the property owner and have the lease agreement reviewed by a lawyer.

Register only new companies without hidden problems from past activities. According to legal practice, companies in Thailand are created for conducting real business, lease an office, display signage, license their activities, have real Thai staff and Thai partners, and employ foreigners with work permits, according to the size of registered capital and the quota for Thai staff.

Such companies may own property, engage in investment activities, including construction, trade, manufacturing, etc.

The registration process of a Thai limited company takes seven working days. The company operates smoothly and without legal complexities and restrictions.

Thai companies with 100% foreign ownership can be registered under the Board of Investment (BOI). The purpose of these BOI companies is for manufacturing, investment, innovation, and other business activities. The investment threshold is 10 million baht (300 thousand US dollars). They are exempt from corporate income tax for three to five years.

The Board of Investment conducts an interview with the investor and studies the business model. The BOI Board makes a decision on registration. After receiving the investment promotion certificate, you can apply to the Board of Investment at www.boi.go.th.

Thai companies are managed by directors:
Directors make decisions regarding planning, licensing, production activities, logistics, marketing, management, and financing.
They manage bank accounts, sign contracts, invoices, receipts of funds, and pay taxes.
They hire personnel and set internal regulations and corporate ethics.
Directors establish the company’s image, the so-called Goodwill name, and approve the advertising budget.
One director or more is appointed by the protocol of the shareholders’ meeting, according to Article 1150 of the CCCT. The authority of the directors is reflected in the company’s DBD certificate.

All necessary matters are decided at the general meeting of shareholders by a majority vote and according to the number of paid shares.

In case of a tie vote, the chairman has the deciding vote, according to Article 1161 of the CCCT.

Shareholders have the right to attend the general meeting, according to Article 1176 of the CCCT. Shareholders have the right to vote by proxy, according to Article 1187 of the CCCT.

The meeting is not legitimate if shareholders representing at least one-quarter of the company’s capital (25%) are not present, according to Article 1178 of the CCCT.

What legal risks do investors bear? In business activities, risks are related to the protection of share rights, copyrights, physical assets, control over processes, missed benefits, force majeure events, licenses, lack of planning, and poor management.

Investors who own real estate can mitigate their risks through loan agreements, investment contracts, and possible guarantees.

When leasing real estate, it is recommended to use real estate agencies or other intermediaries to mitigate the risk of possible claims from third parties.

During the growth of asset value, monitor the increase in the company’s capital. Often, the company’s capital is much lower than the value of its assets.

In case of disputes, real capital ensures the return of investment funds.

Each type of company activity is unique, and so are the legal risks.

Now let’s talk about financial reporting and company dividends. Financial reporting is done through monthly or annual balance sheets, according to Article 1196 of the CCCT. The report contains a summary of assets, liabilities, profits, and losses, and it is audited by auditors. It is presented for approval at the general meeting no later than four months after its preparation.

The accountant provides services to Thai companies on an outsourced basis. Dividends are distributed in proportion to the amount payable for each share, unless otherwise specified for preferred shares. Dividends are paid annually or as agreed from the profits, according to Article 1201 of the CCCT. No interest is accrued on company dividends, according to Article 1205 of the CCCT.

The dividend tax rate is 10% (ten percent).

The director must ensure the accurate recording of the amounts received and expended by the company, the assets and liabilities of the company, according to Article 1206 of the CCCT. This information must be entered into the accounting book, which should be kept at the registered office of the company.

Any shareholder has the right to access the documentation.

Upon the request of shareholders holding at least one-fifth (20%) of the company’s shares, the competent authority may appoint inspectors to examine the affairs of the limited company. In such a case, the applicant bears the expenses for the inspection, according to Article 2015 of the CCCT.

The specialists of our legal company will provide services for the registration of Thai companies, determine the legal structure of corporate relations according to Thai legislation, and protect your legal rights. Welcome to Thailand!