Benefits of a Limited Company

Foreign business owners enjoy lots of benefits when opening a Limited Company. First, because these companies are so similar to LLCs, this is an easy way for foreigners to break into the business world in Thailand. They are already familiar with the business structure, so they already have a level of comfort they might not enjoy with another type of business.

Also, like an LLC, the liability for shareholders is limited. Shareholders and investors are protected when they invest in this type of company. They cannot lose more than what they invested in the company, so if something happens and a business folds, shareholders will only lose their capital investment.

A Limited Company uses a tiered corporate share structure, giving owners the option to maintain full control. Dividend allocations and share voting rights can be adjusted at any time, so owners never have to worry about relinquishing control as the company grows. This gives owners confidence as they start and maintain their businesses.

This structure also provides flexibility for business owners. Companies just need a relative business license to engage in all types of business. While there is flexibility, there are no grey areas with a Limited Company. Roles are designated in writing, so every person knows what he or she is obligated to do for the company. Also, because it’s in writing, board members can refer to the materials if they need to clarify anything.

A Limited Company can also be completely owned by foreigners. There are some restrictions that Plizz will discuss with you to ensure that your company meets the criteria necessary for 100 percent foreign ownership. If you don’t, Plizz can explain the steps you need to take to begin your business.

It’s also easy to hire foreign employees, including executives, with a Limited Company. Once you create your company, you can apply for work permits for your employees. Then, they can travel to and work in Thailand as long as they hold a position at your company. Plizz can also help you apply for and obtain the necessary permits.

Finally, you’ll have access to a corporate bank account when you form this company. That includes a checking, savings, and foreign currency account. Don’t worry if you aren’t in Thailand. You can access your accounts online.

Drawbacks of a Limited Company

As the easiest and most popular option, a Thailand Limited Company does not have many drawbacks. However, there are two drawbacks that you should be aware of before moving forward.

• A Limited Company shall be 51% owned by Thai nationals, unless your company applies for a Foreign Business License (FBL) before operating. However, not all activities are authorized to be conducted by foreign companies under the Foreign Business Act, Plizz legal team can advise whether or not your activity(ies) will be eligible.
• For a Limited Company to be authorized to employ a foreigner, a 4 to 1 ratio applies i.e that at least four Thai nationals shall be employed in order to hire 1 foreigner.

Legal Requirements

Thailand has some legal requirements for setting up a Limited Company. First, the company must have at least three promoters, one director, and one auditor.

The business must also file a memorandum of association, hold a statutory meeting, and register the incorporation papers. Let’s look at this in greater detail.

Timeline for Setting Up a Limited Company in Thailand – Meeting the Requirements

Some Limited Companies are set up in a single day, although it can take several days or weeks to finalize the process. You must go through various steps to set up your company.

• You need to reserve your company name. The Business Development Office in the Ministry of Commerce has guidelines in place for reserving a name. Follow these guidelines to secure your company’s name.
• You need to file a Memorandum of Association. This memorandum contains the company’s name, address, personal details of the promoters, authorized capital, and the number of shares each promoter has. It also must include the objectives set forth by the company.
• All involved parties also must conduct a statutory meeting. During the meeting, you must approve the articles of incorporation and the bylaws and elect a board of directors. Your company also needs to appoint an auditor and ratify the expenditures and transactions of the funders.
• Your company’s director will then register the company. Each Limited Company must be registered with the Commercial Registrar.
• You also might need to register for the Specific Business Tax or the Value Added Tax. Our lawyer can help you determine if this is necessary for your business.

You can set up your Limited Company with Plizz starting at ฿29,900 with our help, you won’t have to worry about missing details and derailing the company’s setup.

Contact Plizz today to learn more about setting up a Limited Company in Thailand. With our help, your company will be up and running soon.