How to Set Up a Company in Thailand as a Foreigner

Setting up a company in Thailand is achievable for foreign investors, but the process requires understanding a legal framework that differs significantly from most Western countries. This guide covers the main structures available, the key requirements, and the most common pitfalls to avoid before you start.

Understanding the Foreign Business Act

The Foreign Business Act (FBA) is the foundational law governing foreign ownership in Thailand. Under the FBA, certain business activities are restricted or prohibited for foreign nationals. In most cases, a foreigner cannot own more than 49% of a Thai company without a specific licence or exemption.

This does not mean foreign-owned businesses are impossible. It means the path to full or majority foreign ownership depends on your business activity, your industry, and the structure you choose. Getting this assessment right at the start saves significant time and cost later.

The Main Structures Available

• Thai Limited Company (Co., Ltd.)

The most common vehicle for international companies entering Thailand. A Thai Co., Ltd. requires a minimum of three shareholders, at least 25% of the registered capital paid up at incorporation, and a board of directors. Under standard FBA rules, Thai nationals must hold at least 51% of the shares unless an exemption applies.

This structure works well for companies that have identified a reliable Thai partner or shareholder, or for businesses that fall outside the FBA restricted list entirely.

• BOI-Promoted Company

For companies in qualifying sectors, promotion by the Board of Investment (BOI) allows 100% foreign ownership and comes with meaningful incentives: corporate income tax exemptions, import duty reductions, and a streamlined work permit and visa process.

Qualifying sectors include manufacturing, technology, research and development, regional headquarters functions, and certain services. BOI promotion adds time to the setup process (typically two to four months for approval) and comes with minimum investment thresholds, but for the right business it is the most advantageous structure available.

• Foreign Business Licence (FBL)

Companies in FBA-restricted sectors that do not qualify for BOI promotion can apply for a Foreign Business Licence, which permits majority or full foreign ownership. The process is more complex and approval is not guaranteed, but it is a legitimate route for certain service businesses, trading companies, and professional services firms.

• Representative Office

A Representative Office allows a foreign parent company to establish a presence in Thailand for non-revenue-generating activities: market research, sourcing liaison, quality control, and reporting to the head office. It cannot sign contracts, generate income, or operate independently. It is a low-commitment entry point suitable for companies still in the assessment phase.

The Registration Process

Company registration in Thailand is handled through the Department of Business Development (DBD) under the Ministry of Commerce. The main steps are:

1. Reserving the company name, preparing the Memorandum of Association,

2. Convening a statutory meeting with all shareholders,

3. Registering the company with the DBD,

4. Obtaining a tax identification number from the Revenue Department,

5. And registering for VAT if annual revenue is expected to exceed 1.8 million THB.

The full process typically takes two to four weeks when working with an experienced local partner. The most common source of delays is incomplete or inconsistent documentation, particularly around shareholder identification and the registered office address.

Work Permits and Visas Are Separate

One of the most frequently misunderstood points: company registration and the right to work in Thailand are two entirely separate processes. Registering a company does not automatically entitle any foreign national to work in Thailand.

A foreign employee requires a Non-Immigrant B visa to enter Thailand for work purposes, and a work permit issued by the Department of Employment before beginning work. Standard regulations require a ratio of four Thai employees per one foreign work permit, though BOI-promoted companies benefit from more flexible rules.

Planning your staffing structure before registration is important precisely because the number of Thai employees you can hire directly affects how many foreign employees can be legally employed.

What to Clarify Before You Start

Before engaging a law firm or registration agent, having clarity on the following four points will make the process significantly smoother:

1. The business activity and whether it falls under the FBA restricted list.

2. The intended shareholding structure and the identity of all shareholders.

3. The registered capital amount, which affects perceived credibility, work permit eligibility, and certain licence applications.

4. The planned ratio of Thai to foreign employees from day one.

Companies that work through these questions before starting registration consistently move faster and avoid the restructuring costs that come from getting the foundation wrong.

How KLAY Can Help

KLAY Consulting supports international companies through the full company registration process in Thailand, coordinating legal, accounting and compliance steps from a single point of contact. We work with a vetted network of local specialists and manage the process so your team can focus on the business itself.

If you are planning to set up in Thailand and want to understand which structure fits your situation, get in touch for an initial conversation.