Thailand continues to attract expatriates who wish to live, work, and start businesses in one of Southeast Asia’s most dynamic economies. Whether it’s the appeal of tropical beaches, the growing digital economy, or the opportunity to tap into the country’s bustling tourism sector, many foreigners are interested in starting a company here. However, establishing a business as a foreigner in Thailand involves navigating specific legal and regulatory challenges. From ownership restrictions to visa and tax obligations, this guide outlines the key steps every expat should follow to legally own and operate a business in Thailand.
Understanding Foreign Ownership Restrictions
Foreign business ownership in Thailand is governed by the Foreign Business Act (FBA) of 1999, which classifies business activities into three lists. Many sectors, particularly those related to retail, services, and certain trades, are restricted to Thai nationals. As a result, foreign entrepreneurs are generally limited to 49% ownership unless they obtain a Foreign Business License (FBL) or fall under special exemptions like the Board of Investment (BOI) promotion.
To comply with Thai law, many expats establish a Thai Limited Company with Thai majority shareholders. However, the use of "nominee shareholders" (Thais holding shares on behalf of foreigners without real investment) is illegal and strictly monitored by the authorities. It’s essential to structure your business legally to avoid severe legal consequences, including imprisonment or business dissolution.
Forming a Thai Limited Company
The most common type of legal entity for expat entrepreneurs is the Thai Limited Company. This structure is similar to an LLC and requires at least three shareholders and one director. Although foreigners can act as directors and signatories, they typically must hold no more than 49% of the shares unless permitted by the BOI or FBL.
The standard minimum registered capital is 2 million THB for companies employing foreign staff. This requirement ensures eligibility for work permits and visas. The incorporation process includes reserving a company name, filing the Memorandum of Association, preparing Articles of Association, and registering with the Department of Business Development (DBD). You must also open a company bank account and register for tax.
Professional assistance is highly recommended to avoid errors in registration documents, shareholder agreements, and statutory compliance.
Board of Investment (BOI) Incentives for Expats
The Thailand Board of Investment (BOI) promotes foreign investment in key economic sectors such as technology, healthcare, manufacturing, agriculture, and education. BOI-promoted companies are allowed 100% foreign ownership and enjoy benefits like:
- Corporate income tax exemptions (up to 8 years)
- Import duty exemptions
- Permission to own land
- Easier work permit and visa processes
- No foreign business license required
To qualify, your business must align with Thailand’s national development goals, and you must submit a detailed application with a comprehensive business plan and financial forecasts. BOI applications are reviewed rigorously, and approval can take several months.
Obtaining a Work Permit and Visa
Owning a business in Thailand does not automatically entitle you to live or work in the country. You must apply for a Non-Immigrant “B” visa and a valid work permit. To obtain these, your company needs to meet certain conditions:
- Minimum registered capital of 2 million THB per foreigner
- Four full-time Thai employees per foreigner
- A proper physical office address
- Tax and social security registration
Once approved, your work permit allows you to legally manage and work for your company. Note that your work activities are limited to those specified in the permit. Renewals must be managed annually, and visa overstay penalties are severe.
Accounting, Tax, and Legal Compliance
After incorporation, your company must maintain detailed accounting records in accordance with Thai law. This includes:
- Monthly VAT and Withholding Tax filings
- Social Security Fund contributions
- Annual Financial Statements audited by a certified auditor
- Corporate Income Tax returns
Failure to file taxes correctly can result in fines, penalties, and even blacklisting of the company. To avoid these issues, it’s wise to work with a qualified accounting firm like Pimaccounting, which specializes in helping foreign-owned companies comply with Thai accounting standards and regulations.
Conclusion
Starting a business as an expat in Thailand is entirely achievable with the right legal structure and professional guidance. From complying with ownership restrictions to navigating BOI incentives and tax regulations, the process requires careful planning and reliable partners. By following the correct legal path and working with experienced professionals like Pimaccounting, you can focus on growing your business while staying compliant and protected under Thai law.
