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Registering a Company Under the Thailand Board of Investment

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Registering a company under the Thailand Board of Investment (BOI) opens up a whole host of fiscal and non-fiscal incentives for foreign investors. However, achieving BOI status takes time and care.

Documents like a memorandum of association, details about shareholders, and copies of passports or IDs are required. Other files include a business plan and forecasts for investments and profits.

Requirements

If you are planning to register a company under the Thailand Board of Investment, it is advisable to seek guidance from legal and business professionals to ensure that your application meets all requirements. These requirements include the preparation of a detailed business plan. This document will be scrutinized by the reviewing BOI official, so it must be exhaustive and accurate. It should cover every aspect of the company’s business in Thailand, including management, ownership, processes, financing, human resources, investment, technology, and profitability.

It should also include a detailed inventory of all equipment and materials used by the company, as well as a list of all employees and their job titles. The company should also prepare financial statements and projections for the first three years of operation. Lastly, the company must submit a list of directors and their nationalities. At least one of these must reside in Thailand to sign documents on behalf of the company.

Several incentives are available for companies registered under the Thailand Board of Investment. These incentives are based on the type of industry and region. For example, a five-year corporate income tax exemption is provided for high-technology activities that are vital to the development of Thailand. Incentives are also available for activities that contribute to the production of goods for export. Other benefits include a removal of the foreign worker quota and a reduction in value-added tax (VAT) registration fees for certain products.

Procedures

Before applying for a BOI certificate, investors must first prepare a business plan. This document should address every aspect of the business, including management, ownership, processes, finances, investments, and technology. The plan will be reviewed by a BOI official, and any shortcomings could result in the rejection of an application. Working with a professional to assist with this process is highly recommended.

After preparing a comprehensive business plan, investors must deposit a minimum of 1 million baht as capital. They must also open a bank account and choose an original name for their company. In addition, they must obtain a tax ID number and register for VAT if their revenue is above 1.2 million baht. They must also submit copies of the directors’ passports or IDs and the company’s registered address.

Once approved, the BOI will issue a business registration certificate that must be displayed in a prominent location. Additionally, companies must report any changes to the BOI within 30 days of those changes. Furthermore, BOI-promoted companies are required to make a tax prepayment of 50% of their estimated tax liability within two months after the end of their accounting period. In addition, these companies must display a business name board in both Thai and English on the front of their main office and any branch offices.

Taxes

The BOI is an agency under the Prime Minister’s Office that safeguards foreign investment in the country. It offers both fiscal and non-fiscal incentives to companies registered with it. For example, it waives corporate taxes for up to thirteen years. Incentives are based on a variety of criteria, including the company’s potential impact on Thailand’s economy and industry. However, a company must adhere to strict guidelines and ensure that its work doesn’t harm the environment.

The first step is to create a comprehensive business plan that meets the BOI’s requirements. This is essential, as an inadequate plan will likely get rejected. It should include details of all aspects of the company’s operations in Thailand, including management, ownership, production processes, financing, human resources, and technology.

Once the application is complete, it must be submitted to a BOI officer. The approval process can take between 40 working days for investments equal to or less than 200 million baht, and 90 working days for those exceeding 2,000 million baht. In some cases, the project must also be approved by the Ministry of Commerce, the National Economic Development Board (NEDB), or the Industrial Promotion Centers. It is best to consult with experts on the matter before submitting an application. They can help you navigate the process and avoid unnecessary delays.

Incentives

Incentives are available for registering businesses under the BOI, but they are dependent on the project’s location. Special economic zones (SEZs) are established in ten provinces bordering neighboring countries, where the government offers tax and non-tax incentives for logistical activities such as warehouses near the borders; distribution; services; manufacturers that use raw materials from nearby markets; and knowledge-based industries, like R&D centers.

Companies may also receive incentives for establishing regional operating headquarters and research and development centers in Thailand. To qualify, the company must meet certain minimum requirements for capital investment and debt-to-equity ratios. The company must also establish a technical and personnel management center in Thailand, or provide support, service, or training for its associated enterprises. The company must also have paid-up capital of at least THB 10 million on the last day of each accounting period, and at least ten knowledgeable and skilled employees working full time for its international business centre (IBC).

Generally, foreigners may not own majority stakes in most businesses under the FBA, but U.S. nationals are exempt from these restrictions under the U.S.-Thailand Treaty of Amity and Economic Relations. In addition, the Thai government has taken steps to become a leader on Responsible Business Conduct (RBC).

State-owned enterprise (SOE) investors can enjoy the same tax benefits as private enterprises. However, SOE senior managers report to a cabinet minister or SEPO and corporate board seats are typically given to politically affiliated individuals.

Representative Office in Thailand

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Setting up a Representative Office in Thailand is the fastest and easiest way for a foreign company to establish a business presence in Thailand. This type of entity doesn’t require a Foreign Business License.

However, it does have some restrictions like not being allowed to invoice in Thailand. It also has to pay tax on remitted funds according to the revenue code.

Regulatory Requirements

While a Representative Office is permitted to conduct non-revenue-generating activities, it’s also subject to regulations. For instance, it must report on business trends and product advice to its parent company. It is also required to have a manager who has power of attorney and must reside in the country. In addition, it must submit monthly accounting records and annual financial statements. Additionally, it must register with the Thai Revenue Department. It must also abide by labor protections, including the minimum wage and work permit requirements for foreign employees.

A Representative Office can perform a variety of activities, including collecting market information and negotiating contracts. However, it cannot earn income or make sales on behalf of its parent company in Thailand. This makes it an attractive option for companies who want to test the market without making a commitment.

In addition, a Representative Office must remit at least 3 million baht in working capital to Thailand. This capital must be transferred in stages: 25% within the first three months, 50% within the first year, and the remainder within three years. Moreover, it must avoid obtaining loans from local banks to cover operational costs, as this will violate the conditions of its license. Lastly, a Representative Office must file taxes in accordance with the Revenue Code. This includes submitting corporate income tax documents and paying withholding taxes for its staff.

Tax Benefits

As a non-revenue-generating entity, Representative Offices are exempt from corporate income tax in Thailand. This makes them a popular choice for foreign companies exploring the Thai market, as well as for those seeking to conduct market research in Thailand.

However, it is important to understand the limitations of a Representative Office before setting one up. The office is only allowed to perform a limited number of permitted activities, and must report back to its head office on any relevant business trends. It is also prohibited from engaging in sales or negotiations with natural or legal persons in Thailand.

Additionally, Representative Offices must maintain sufficient capital funds to cover operational expenses. In most cases, this is achieved by annually transferring a specified amount of funds from the parent company into a local bank account. The office must also maintain a physical office space in Thailand, and must employ at least one Thai employee who is registered for social security contributions.

The establishment of a Representative Office in Thailand can take as little as a week, but it is crucial to follow the proper procedures to ensure that the office is approved by the Department of Business Development. This includes assembling the required documents, including a letter of appointment signed by the director of the main business and an outline of intended operations.

Legal Requirements

As the name implies, a Representative Office manages service businesses on behalf of its head office or affiliated company in other countries. It is an ideal structure for companies exploring the Thai market, as it does not require a foreign business license and can operate with limited scope of activities, including conducting research or market exploration. However, there are a number of legal requirements that must be met to set up a Representative Office in Thailand.

First, the parent company must file an affidavit detailing important information about the company, its shareholders, and directors, and submit the corresponding documents to the authorities. The company must also submit its financial records for the last three years and provide a list of expected staff members.

The company must also remit a minimum of 3 million baht as initial capital. It must transfer this capital into its corporate bank account annually and show proof of funds remitted. Furthermore, the representative office must not engage in profit-making activities, and any loans that it receives must not exceed seven times the amount of capital remitted. In addition, a legal representative must be appointed to manage the Representative Office and submit a copy of his or her passport and household registration. This manager must have a broad power of attorney that allows him or her to perform the outlined functions.

Cost

As a foreign entity, setting up a representative office in Thailand isn’t cheap. The cost largely depends on the number of employees hired. In general, the rep office can only be employed by a maximum of three staff members (two Thai and one foreign).

In addition to the required influx of capital, the representative office is responsible for paying government fees. Registration fees are based on the company’s registered capital, so a larger registered capital leads to higher registration fees. Representative offices are also required to pay taxes on remitted funds from the headquarters, which can vary depending on the type of fund and amount of money remitted.

Other costs include a lease for an office space, equipment, and any other expenses related to the running of the office. Additionally, the representative office must pay for any staff employed by it who require work permits and visas. These are separate costs that can add up quickly, but they are necessary to maintain the legality of the office in the eyes of the Thai authorities.

Overall, the advantages of a Representative Office in Thailand are numerous and far-reaching. They can be a useful tool for a foreign company that wants to explore the Thai market without making an expensive investment. They can promote products, provide information to local distributors and customers, report trends back to the headquarters and affiliate companies, and more.

Wills and Succession in Thailand

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If you die without a legal Will, your family will have to hire a lawyer in Thailand to complete court probate proceedings. This is time consuming and expensive.

If the deceased had no Will, his property will be distributed according to statutory inheritance laws. This article will cover the basic rules of succession in Thailand.

A Will is a legal document that outlines your wishes for the disposal of your property after death.

The process of inheritance and succession in Thailand is complex. It requires a thorough understanding of both statutory and testamentary succession. The latter, governed by specific sections of the civil code, allows individuals to dispose of their assets according to their desires, bypassing statutory provisions otherwise applicable in cases of intestate succession. In order for a Will to be deemed valid, it must clearly express the testator’s intentions and must be drafted in accordance with Thai law.

Heirs and beneficiaries must be carefully selected to ensure that the testator’s wishes are carried out. In addition, heirs must be prepared to work together and cooperate in the distribution of estate assets. If there is disagreement among heirs, the process can be prolonged. A knowledgeable lawyer can help facilitate the process and resolve disputes.

For foreigners with assets in Thailand, a Will is essential to safeguard their interests. However, the execution of a foreign Will in Thailand may be difficult. This is because the court must determine whether or not the document complies with Thai laws. It is therefore important to consult with a lawyer who understands the intricacies of Thai inheritance law. Our legal team can assist you with drafting and executing a Will that is legally compliant with Thai law and reflects your wishes for the disposition of your assets after death.

It is a good idea to make a Will if you own property in Thailand.

The main reason why a person should make a Will is to ensure that their last wishes are respected after death and to prevent family disputes. Having a properly drafted Will also makes the succession process much easier to settle.

It is important that a foreign national makes a Thai Will in order to protect their assets in Thailand, especially if they have children or if they own shares in a company. A lawyer should be consulted in order to draft the Will and make sure that it meets the requirements of Thai law.

A Will must be made in the presence of a district officer or at least two witnesses in order to be valid. There are three types of Wills: a private document, a public document, and a secret document. The latter is the most difficult to contest, but it must be signed and sealed in the presence of a district officer and two witnesses.

In the absence of a Will, inheritance law determines how property is distributed amongst heirs. The process can be complicated and time consuming, as well as being subject to disputes from heirs. A Will enables people to select their heirs and skips the statutory provisions that would otherwise apply in cases of intestate inheritance. Moreover, it can save on taxes as the Will is a clear indication of what should be passed on.

It is a good idea to make a Will if you have children.

For parents, one of the most important reasons to make a Will is to designate guardians for your children. Without a Will, the courts will decide who is responsible for taking care of your children after your death. Choosing guardians who share your values and are familiar with the needs of your children can help ensure that your children are well-cared for after you’re gone.

A Will also allows you to name an executor who will manage the court process for wrapping up your estate and making sure all of your assets are distributed according to your wishes. The person you choose to serve as executor will have a big job and will have to make many decisions, both large and small, about how to distribute your estate. Using your will to state your preferences will minimize family conflict and allow your executor to focus on making sure that everything is done right.

Your Will can also include a no-contest clause paired with at least some nominal gift to create a disincentive for one of your children from challenging your will in court. Often times, challenges to a Will are made because a child believes that you have been under undue influence and expressed wishes that weren’t really what you wanted.

Having a Will is especially important for foreigners who are close to or settled in Thailand because Thai law requires that heirs be designated based on the laws of Thailand and not the laws of your home country. This means that your family could face complicated legal proceedings and delay the distribution of your estate assets to your loved ones.

It is a good idea to make a Will if you have a spouse.

When it comes to succession, a well-drafted Will allows you to choose your heirs and structure the distribution of your assets according to your wishes. It also helps avoid family disputes and conflicts and ensures that your estate is properly managed and settled. In the absence of a Will, inheritance matters are left to the Thai courts who will decide how your estate should be distributed based on inheritance law.

This may lead to the outcome that is different from your expectations. It can also result in a delay in settling your estate. In addition, a court’s decision may be subject to appeal, which can further complicate the process and result in delays and unintended consequences.

Another benefit of a will is that it will prevent unnecessary taxation. The Thai government requires that all foreigners whose estates are in excess of 1 million Baht must file for estate taxation. The preparation of a will allows you to save on taxes and minimize your legal fees.

A will can include all of your property, including physical and financial assets. This includes your house, cars and other personal belongings, as well as retirement plans, life insurance policies, bank accounts, investment funds, and even digital assets such as logins and passwords to online accounts. In addition to a Will, it is important to make a Living Will which outlines your end-of-life wishes. This is a separate document that should be handed to your Health Care Representative so that they can act on your wishes if you are terminally ill or in a vegetative state.

Filing of Divorce in Thailand

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Divorce is possible if you both agree and can be registered at a government District office (Khet or Amphur). It could be recommended that you draw up a divorce settlement agreement with a lawyer before heading to the Khet.

Contested divorces require proving specific legal grounds under Section 1516 of the Thai Civil and Commercial Code. These include adultery, misconduct, and desertion.

1. Filing the Petition

If both parties agree to divorce, the couple can opt for an uncontested divorce. This type of divorce is easier, quicker and less expensive. The process can take a few months to one year to complete depending on the complexity of the case and how quickly the spouses can come to an agreement on all issues related to their divorce such as the division of assets, child custody in Thailand, alimony or joint-ventures.

If the couple cannot reach an agreement on all matters related to their divorce they can file a petition for a contested divorce. This requires both spouses to appear in person at the district office. The court will then evaluate the case and may issue a divorce judgment.

The court will also decide the division of assets and property, if necessary, based on the individual circumstances of each marriage. In a contested divorce the judge can also make decisions about parental rights and support for children.

The court can also determine which party is liable for any debts that were acquired during the marriage. It is important to note that Thailand is a community property jurisdiction so assets and property acquired during the marriage are considered to be community property (sin somros) while personal property (sin suan tua) remains owned by the individual. It is possible for the court to make an exception to this rule if a prenuptial agreement has been made and is not contrary to public order and morals.

2. Filing the Affidavit

Once the spouse who initiated the divorce has verified that the grounds are valid, the affidavit will be filed at the district office (amphur). Depending on the circumstances, the amphur may require the filing party to also bring a translator.

This step is necessary if the divorce is contested as it allows the other spouse to respond to the petition. The affidavit must clearly state the spouse’s name, address and signature. The spouse must also state whether the marriage has children or joint property. In addition, the spouse must state whether they want to receive alimony or maintenance.

If the spouses are both in agreement with all issues regarding their divorce, then they can opt for an administrative divorce rather than a court divorce. This is much cheaper and more straightforward but requires both spouses to be present at the amphur for registration. The spouses cannot be represented by a lawyer with this type of divorce.

If the spouses are not in agreement on some divorce-related issues, they can use alternative dispute resolution methods like mediation to reach a mutually acceptable solution. Using ADR is more cost-effective and quicker than litigation, and it is also less emotionally taxing. This option is especially beneficial if both parties are still working together and/or have children in common. However, it is essential to get legal advice to ensure that the disputed issues are legally resolved.

3. Filing the Notice of Hearing

If a couple is unable to come up with an agreement on their property division, the judge will set up a hearing to decide this issue. The court will review all of the evidence presented, and make a ruling. The court may award a specific percentage of the marital assets to one party, or it may divide the estate equally.

Regardless of the outcome, this process can take months or even years. During this time, the spouses are required to submit financial statements every month. In addition, the parties are expected to provide support for their children if necessary.

In Thailand, there are two ways to end a marriage: divorce by mutual consent or divorce by judgment of the court (saiban rikon). A contested divorce is where one spouse files for divorce and cites a reason from the ten legally defined grounds in section 1516 of the Thai Civil and Commercial Code.

A divorce by mutual consent is where both husband and wife agree to end the marriage. The spouses then register their divorce at the district office (“Khet” or “Amphur”) where their marriage was registered. The couple will need to present their marriage certificate, Thai ID, house registration certificate, and the foreigner’s passport. The registration bureau will then issue a divorce certificate to the couple. It is important that a couple consult with a family lawyer before registering their divorce at the district office.

4. Filing the Final Judgment

Divorce in Thailand can be a complicated process for many reasons, and it is important to have the right legal representation to help you navigate it. There are two different avenues for divorce in Thailand: a contested divorce and an administrative (uncontested) divorce. A contested divorce involves going through court proceedings, while an administrative divorce is easier and faster for couples who mutually agree to end their marriage and meet specific requirements.

If a couple agrees to an uncontested divorce they can register the divorce at the district office where they married. They must be physically present during the process. If they have children the courts will make decisions on custody and alimony. Couples may also choose to divide their assets based on their preference.

Aside from property division, there are other issues that can arise in a divorce case. For example, if a spouse committed adultery, the innocent party can request compensation from both their husband and their lover for the harm caused to them. Additionally, if a married couple has a child, the parents are obligated to provide for the child’s education, medical care, and general living expenses.

Finally, if an ex-spouse dies with financial debts from court judgments, those creditors must be paid before the estate can be distributed to the remaining heirs. It is always a good idea to have a family lawyer like TFL with you when you register your divorce.

Child Legitimation in Thailand

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Although Thai law states that a child is the sole legal offspring of their mother, biological fathers can establish parental ties through a process known as child legitimation. Fathers who complete this procedure can claim custody rights, provide financial security, and use their surnames for the children.

There are several ways to obtain this recognition, including marriage, court action, and government registration. Legitimization bestows significant benefits, including the right to inheritance.

Fathers Have Equal Rights and Responsibilities

While Thai law states that children are the sole legal offspring of their mothers, fathers can establish paternal ties and take on parental rights through a process known as child legitimacy. This process provides social acceptance and reduces the societal stigma associated with illegitimate children while also providing financial security for children through their father’s obligation to provide support.

Legitimation can be achieved through marriage, court action, or government registration of paternity. The result is that the father gains equal custody and parental power with the mother, the child can use the father’s surname, and he has access to benefits such as social security and inheritance. In the event that a father wishes to pursue child legitimacy, it is best to seek out legal assistance from an experienced Thai family lawyer.

A father can apply to register his child as legitimate voluntarily at a district office if the mother and child consent to this. The application must be made with the mother and the child present, and a statement must be provided from both parties stating that they agree to the legitimacy of the child. In the case that a father is not able to gain the consent of the mother or child, he can file for a court decision on legitimacy in the same way that a divorce petition is filed with a Thai court.

Fathers Have Custody Rights

Fathers who are legally recognized as children’s fathers can exercise custody rights and inherit property from their offspring. They also have a legal obligation to support their children until they reach legal age. The process of legitimation can be done through marriage, court action or government registration. Regardless of how a father acquires parental rights, he can then register it at a local district office.

Generally, the father must declare his intention to legitimize the child by signing his application in the presence of a registrar. The mother and child are then notified of the father’s application for legitimation. They can either object or express their consent within sixty days (or one hundred and eighty days if they are outside of Thailand). Otherwise, it is presumed that they do not consent to the father’s request.

Aside from acquiring parental rights, the father can also use the registration to prove his relationship with the child. Proof of this can include DNA results, photographs of the father and the mother together when she was pregnant, testimony that the father publicly reported that he was expecting a child with the woman, or evidence that he paid hospital bills or other expenses for the mother and her baby. This is helpful in case the father wants to apply for a visa or other benefits on behalf of the child.

Fathers Can Apply for Registration of Legitimation

While Thai law stipulates that a child is solely the legal offspring of their mothers, fathers who wish to establish parental ties have several options. They can do this through marriage, court action, or government registration of paternity. This process of legitimation reduces societal stigma associated with illegitimacy and also allows children to access benefits such as financial support from their fathers.

The first option is for the father to apply for registration of legitimacy at his local district office. This requires the mother and child to express their consent to the application in front of a registrar. If the mother and/or child do not object or provide their consent within sixty days (or one hundred eighty days if they are abroad), it is presumed that they have given their consent.

Individuals that register as the father of a child are considered to have parental powers until their children reach legal age (20). They may then apply for custody, which is subject to a court’s decision. If the father wishes to revoke the registration, he must file a petition with a court. This is a complex and time-consuming process. Fathers seeking to acquire rights and responsibilities for their children should seek expert advice on the best path forward. The father should be able to show that there is no legal impediment to registering the relationship with the child and that he has met other requirements such as the verification of his identity through DNA testing.

Fathers Can Change Custody

When it comes to child custody cases, the Thai court’s major policy concern is what is in the best interest of the children. The judges will often take into account the wishes of both parents but, in most cases, give sole custody to the mother. This is a result of the traditional family structure in Thailand, which focuses on maintaining strong and cohesive families.

Fathers are able to change custody in some cases. The process is not a simple one though. For a father to gain custody of his child he must first be legally recognized as the father, which can be done through marriage, court action or government registration. Fathers who wish to establish parental ties are encouraged to do so, as this helps to reduce the societal stigma of illegitimate children and can provide financial security for them through fathers’ obligations to pay child support in Thailand.

The legitimation process is a complex and lengthy procedure that requires the consent of both the mother and the child. The application must be made at a local district office and both parties must appear before a registrar to express their consent. If the mother or child do not appear within 60 days of being notified of the application, they are presumed to have objected to the father’s request and, therefore, denied legitimacy.