Thai Limited Company Registration

Setting up a business in Thailand requires a clear understanding of the various legal entities available under Thai law. Among the different structures, the limited company remains the most popular form for both Thai and foreign investors. It offers flexibility, limited liability protection, and a familiar corporate framework similar to international business practices.

However, not all limited companies in Thailand are the same. Depending on ownership, purpose, and compliance with Thai laws — particularly the Foreign Business Act B.E. 2542 (1999) — there are several distinct types of limited companies. Understanding these categories is essential for selecting the most suitable structure for your investment goals.

1. Overview of Limited Companies in Thailand

A limited company in Thailand is a legal entity established under the Civil and Commercial Code (CCC). It is treated as a separate legal person, distinct from its shareholders, which limits their liability to the amount of unpaid shares they hold.

A Thai limited company operates similarly to private limited companies (Ltd.) in other jurisdictions. It must have a registered address, share capital, directors, and shareholders. Its main purpose is to carry out commercial activities for profit within Thailand.

Limited companies are broadly classified into two main categories:

1. Private Limited Company (บริษัทจำกัด – Borisut Jamkad)

2. Public Limited Company (บริษัทมหาชนจำกัด – Borisut Mahachon Jamkad)

Within these categories, there are additional variations depending on ownership, business scope, and compliance with foreign business laws.

2. Private Limited Company (บริษัทจำกัด)

The Private Limited Company (PLC) is the most common and straightforward business entity in Thailand. It is ideal for small to medium-sized businesses and foreign investors seeking a manageable and flexible business form.

Key Characteristics

• Separate Legal Entity – The company is legally distinct from its shareholders.

• Limited Liability – Shareholders’ liability is limited to the unpaid amount on their shares.

• Minimum Shareholders – At least two shareholders are required (reduced from three following the amendment to the Civil and Commercial Code in 2023).

• Directors – At least one director is required, who manages the company’s operations.

• Registered Capital – There is no specific minimum capital requirement unless applying for certain licenses or employing foreign workers.

• Articles of Association and Memorandum of Association – These govern the company’s internal management and corporate structure.

Registration Process

The company registration process involves the following main steps:

1. Reserve the Company Name with the Department of Business Development (DBD).

2. File the Memorandum of Association (MOA), stating the company’s name, objectives, registered capital, and shareholder details.

3. Convene a Statutory Meeting to adopt the Articles of Association and appoint directors and auditors.

4. Register the Company with the DBD.

5. Obtain a Tax Identification Number and register for VAT (if required).

Ownership Structure

Private limited companies can be 100% Thai-owned or partially foreign-owned. However, under the Foreign Business Act (FBA), if foreign shareholders hold more than 50% of the shares, the company is considered a foreign entity and may be restricted from engaging in certain business activities unless a Foreign Business License (FBL) or Foreign Business Certificate (FBC) is obtained.

3. Thai-Owned Limited Company

A Thai-owned limited company is a private company where Thai nationals own more than 50% of the shares.

This structure allows the company to engage freely in most business sectors without restrictions under the Foreign Business Act. Foreign investors can still hold up to 49% of the shares and may participate in management or provide funding, but they cannot hold a controlling interest.

Benefits

• No restrictions under the Foreign Business Act.

• Easier access to business licenses and government contracts.

• Simpler compliance process and faster registration.

Considerations

• Must maintain a majority Thai shareholding structure at all times.

• In some sectors, Thai shareholders must demonstrate genuine ownership (not nominee arrangements), as using nominees to evade foreign ownership limits is illegal and punishable under the FBA.

4. Foreign-Owned Limited Company

A foreign-owned limited company is one where foreign shareholders own more than 50% of the shares.

This structure is common for multinational corporations and foreign investors who wish to retain majority control over the company. However, foreign-owned limited companies are classified as “foreign businesses” under the Foreign Business Act, which imposes restrictions on certain activities.

Key Requirements

• Must obtain a Foreign Business License (FBL) or Foreign Business Certificate (FBC) before engaging in restricted business activities.

• Subject to minimum capital requirements (usually THB 3 million per restricted activity).

• Can only operate in sectors not restricted by the FBA, unless special exemptions apply.

Exemptions and Alternatives

Foreign-owned companies may avoid restrictions by registering under special programs, such as:

• Board of Investment (BOI) Promotion – Grants incentives, tax exemptions, and permission for full foreign ownership in eligible industries.

• US–Thailand Treaty of Amity – Allows U.S. citizens and companies to hold majority ownership in Thai companies with similar privileges to Thai nationals.

• Industrial Estate Authority of Thailand (IEAT) – Permits 100% foreign ownership for certain export-oriented or industrial businesses.

5. Public Limited Company (บริษัทมหาชนจำกัด)

A Public Limited Company (PLC or PCL) is a company that offers its shares to the public and may be listed on the Stock Exchange of Thailand (SET). It is regulated under the Public Limited Companies Act B.E. 2535 (1992).

This form is typically used for large enterprises, joint ventures, or companies planning to raise capital from public investors.

Key Features

• Must have at least 15 shareholders at incorporation.

• At least 50% of the directors must be Thai residents.

• Must issue a prospectus and comply with Securities and Exchange Commission (SEC) requirements if offering shares to the public.

• Must appoint auditors and independent directors as required by Thai corporate governance standards.

• The name must end with “Public Company Limited.”

Advantages

• Access to public capital markets through share offerings.

• Enhanced credibility and investor confidence.

• Suitable for large-scale projects and partnerships.

Disadvantages

• Stricter reporting, auditing, and corporate governance requirements.

• Higher registration and operational costs.

6. Limited Company under Special Privileges

Some limited companies may be registered under special investment schemes or treaties that modify standard ownership rules. Common examples include:

1. BOI-Promoted Companies

   • Eligible for corporate income tax exemptions and full foreign ownership.

   • Must operate in industries promoted by the Thailand Board of Investment (e.g., manufacturing, tech, renewable energy).

2. Treaty of Amity Companies

   • Available exclusively to U.S. citizens and corporations.

   • Allows 100% foreign ownership and exemption from most restrictions under the Foreign Business Act.

   • Requires certification from the U.S. Commercial Service and registration with the DBD.

3. Companies in Industrial Estates or Free Zones

   • Governed by the Industrial Estate Authority of Thailand (IEAT).

   • Often allowed 100% foreign ownership if goods are primarily exported.

7. Choosing the Right Limited Company Type

Selecting the right form of limited company depends on several factors:

• Ownership Goals – Whether you want full foreign control or prefer a joint venture with Thai partners.

• Business Activities – Whether the business falls under restricted sectors of the Foreign Business Act.

• Capital Requirements – Higher foreign equity often requires larger minimum capital investments.

• Tax and Incentives – BOI and IEAT incentives can reduce tax burdens and increase ownership flexibility.

• Long-Term Objectives – A Thai-owned company may simplify operations initially, while a BOI-promoted or Treaty company can provide broader control and investment protection.

Conclusion

Understanding the types of Thai limited company registration is essential for any entrepreneur or investor looking to establish a business presence in Thailand.

The Private Limited Company remains the most common and versatile structure, offering limited liability and operational flexibility. A Thai-owned company allows full participation in most industries, while a foreign-owned company requires careful compliance with the Foreign Business Act — unless granted exemptions through BOI promotion or the Treaty of Amity. For large-scale or publicly funded ventures, a Public Limited Company provides access to Thailand’s capital markets and higher credibility.