Limited partnership in Thailand
How partner liability works, when the foreign business rules apply, and how registration with the DBD works.
Thailand offers two types of partnership. In an ordinary partnership, two or more partners share unlimited liability for the partnership’s debts. A limited partnership in Thailand also has two or more partners, but at least one partner has unlimited liability (the general, or managing, partner) and at least one has liability limited to their contribution (the limited partner).
The difference matters when things go wrong, and it is easy to get wrong on paper. Plizz’s legal team prepares and files the registration for you and explains how liability works for each partner.
Benefits of a limited partnership
The main benefit goes to the limited partner, whose liability is capped at the capital they contribute. If a limited partner invests THB 1 million, that is the most they can lose, even if the partnership owes more.
A limited partnership can operate in most sectors, with the relevant license where an activity is regulated. Plizz can help you obtain the licenses you need.
The partners also control who joins: all partners must agree before a new partner is admitted.
Foreign partners can contribute up to 49% of the capital of a partnership in restricted activities without a Foreign Business License. However, a limited partnership whose managing partner is a foreigner is treated as a foreign business whatever the capital split. In either case above these limits, a Foreign Business License is needed for restricted activities, and Plizz can apply for it.
Drawbacks of a limited partnership
There are also drawbacks to weigh before you register. First, the general partner has unlimited liability for the partnership’s debts and obligations. If both partners invest THB 1 million, the limited partner can lose at most that amount, while the general partner can lose much more, including personal assets.
Management is the second drawback. Only an unlimited-liability partner can run the business day to day; a limited partner who takes part in management loses the protection of limited liability.
Finally, unlike an ordinary partnership, which can stay unregistered, a limited partnership must be registered, and dissolving it also takes formal steps. Plizz handles the filings in both cases.
Legal requirements
If the general partner is a foreigner, they need a work permit and a Non-Immigrant B visa to work in the business. A Foreign Business License is needed for restricted activities if foreigners contribute half or more of the capital or if the managing partner is a foreigner.
Thai law sets no minimum capital for a limited partnership, and partners do not need to contribute equally. A foreign-controlled partnership must meet the foreign business minimum capital (generally THB 2 million, or THB 3 million for activities on the Foreign Business Act lists), and each work permit generally needs THB 2 million of capital.
How to set up a limited partnership in Thailand
To register a limited partnership in Thailand, the documents must be complete and in order. Plizz prepares them so nothing holds up the registration.
The partners file the registration application with the Department of Business Development (DBD) and pay the government fees.
The application sets out the partnership’s name, objectives and office, each partner’s contribution and liability, and the managing partner. Plizz’s legal team prepares it for you.
Ready to register your limited partnership? Get a quote and we start the paperwork.
