For those of you who have visited Thailand and thought how great it would be to setup a business and live out here, but how? This is your guide.

In this article we will cover the steps required to incorporate a company in Thailand, setup your business and ultimately hire yourself as an employee so that you can get a visa to live in Thailand.

Why setup a company in Thailand?

There are many visas that will get you access to Thailand. There is the Elite visa, Education visa, Retirement visa, the list goes on. All of these can be good options that allow you to live in Thailand. But none of these give you the ability to legally work and run a business in Thailand.

The Long Term Resident visa is one that does enable you to work in Thailand remotely as a digital nomad. But it is not that easy to access and it doesn’t allow you to setup shop in Thailand on an indefinite basis.

A common solution for people who want to live and run a business from Thailand is to incorporate your company in Thailand. This will allow you to have a physical business presence in Thailand and hire local employees. But perhaps the best part is that you can also hire yourself as an employee of your own company and attain a residence permit to live in Thailand on an ongoing basis.

As an employee of your own Thai registered company, you will be able to apply for a Non-immigrant business visa and work permit. This is generally a one-year renewable visa.

Not only does the Non-immigrant B visa allow you to live in the country, it also comes with other benefits. More on that later in the article.

How to set up a Thai Company

When you incorporate a company in Thailand, you will generally be creating a private limited company (LTD). This is a private company limited by share capital; similar to an LLC or S-Corp in the US, an LTD in the UK or a PTY LTD in Australia.

There must be a minimum of two shareholders. And at least 51% of the share capital must be owned by a Thai citizen. The remaining 49% can be owned by you, the foreigner. A foreign company (which you control) can also hold up to a 49% share.

It is possible to use the services of a nominee shareholder if you don’t have someone that you can trust to hold the majority shareholding.

There is no minimum share capital requirement to set up the company itself, unless you want to sponsor a foreigner’s work permit.

To complete the company registration, you will need to file a Memorandum of Association with the Ministry of Commerce. This is a document that outlines the following company information:

  • Names and information of the company shareholders
  • The directors
  • Business address
  • Amount of registered and paid-up capital
  • Proposed business activity

Once approved, the Ministry of Commerce will issue the company’s legal documents, such as:

  • Certificate of registration
  • Shareholder register
  • Company affidavit
  • Company articles of association/company constitution

If your revenue is expected to be greater than 1.8 million Baht (USD 50,000), you will need to register your company for Value Added Tax (VAT).

The final step to setting up your Thai company will be to open your business bank account.

What is a nominee shareholder?

Note: There has been a recent crackdown by Thai authorities to penalize people using a nominee service in order to set up a Thai company. Although the use of nominee shareholders is widespread, and often facilitated by Thai lawyers, we do not recommend setting up a majority owned Thai company unless the Thai shareholder is a legitimate partner in the business.

A nominee shareholder is someone who agrees to act in the capacity of shareholder as a service, and usually for a fee. They are generally a shareholder in name only, and have no input into the decision making of the company.

That said, legally a nominee shareholder can still potentially have access to company finances and the ability to make decisions on the company’s behalf.

To mitigate this, a contract would normally be drawn up to help protect your ownership and decision-making power. This is designed to keep you in control of the business, its assets, and its finances.

Some foreigners prefer to contract a non-related legal professional such as a Thai lawyer or accountant to carry out the duties of a nominee shareholder. The other option is to use a Thai spouse or friend.

The use of a nominee shareholder is not ideal. But there are ways to structure things so as to reduce the risks of such an arrangement. We can help put you in touch with a lawyer to discuss your options if you are considering this route.

What are your other options if you don’t want to have majority Thai ownership?

If a Thai limited company with majority Thai ownership is a deal breaker for you, the good news is there are some other options that can be explored.

These include setting up a foreign branch company, a representative company, a Board of Investment (BOI) company, or utilizing the Treaty of Amity if you are a US citizen.

How to hire a foreigner (you) as an employee of your Thai company

In order to hire yourself as an employee of your company, there are a few conditions that must be met.

The company must have at least 2 million THB of registered paid-up capital.

Your business must adhere to the 4:1 rule. This entails that for every 1 foreigner that you hire, you must also hire 4 Thai employees. This doesn’t have to be a big expense as long as you are at least paying in alignment with the minimum wage. If you are on the LTR visa, you will be exempted from the 4/1 hiring rule.

The business must also be VAT registered.

How to apply for a Thai work permit

Once you have satisfied the eligibility criteria above, your company will be able to apply for a work permit for yourself, as an employee of your company.

To apply for the work permit, the foreign employee should hold a Non-immigrant B visa or a marriage visa.

The company will also have to provide its latest financial statements and have all tax obligations up to date.

What are the ongoing running costs of Thai company?

Once the company is established, there will be some ongoing running costs that will need to be maintained.

You will have to complete an audit of the company financials each year.

There will be ongoing tax lodgments for income tax, VAT and payroll withholding and reporting that will require the services of a Thai accountant. There will also be annual government fees payable to keep your company registration active.

The setup and ongoing costs of running a Thai company are generally quite reasonable. We can help put you in touch with a local accountant who is familiar with working with foreigners.

What are the corporate tax rates in Thailand?

The corporate tax rate in Thailand is 20%.

Companies with paid-up capital of less than 5 million THB (USD 141,000), will not pay any tax on their first THB 300,000 (USD8.1k) profit. And then 15% tax on profits ranging from THB 300k to THB 3 million (USD 84,000).

What are the other benefits of a Thai work permit?

Having a Thai work permit opens up a lot of doors for foreigners who are living in Thailand.

Work permit holders will receive a Thai tax ID number. This is can be used as legal proof of having tax residency in Thailand. Having this document can be helpful when convincing the tax authority in your home country that you are indeed a non-resident for tax purposes back home.

You will be entitled to social security benefits.

You will be entitled to open a Thai bank account as well as a Thai brokerage account for buying and selling shares on the Thai stock exchange.

A work permit holder will be eligible to apply for long term leases on accommodation, saving you a lot of money.

You will also be eligible to purchase local insurance.

Holding a Non-immigrant visa in Thailand also provides a pathway towards permanent residency status in Thailand, should you wish to pursue that.

Next steps

For anyone who wants to legitimately work and build a business in Thailand over the mid to long term, a Thai limited company can be one of the best ways to achieve this.

It will enable you to break free from the long-term tourist feeling that can accompany many of the other visa options. And the extra rights that come with having a work permit speak for itself.

This is a great way for people who want to commit to Thailand, and build a life for themselves out here, whilst having a greater level of certainty as to their rights to reside in the country.

There are some points that you will need to navigate and become comfortable with. That said, countless foreigners have used a Thai limited company as a vehicle to indefinitely reside in this wonderful country.

So it is certainly worth at least giving it some consideration, and then talking to someone about your options.

Thanks for reading.