company Archives

Setting Up a Second Residence in Thailand

April 27, 2023 11:17 am Comments Off

Setting up a second residence in Thailand has become a popular option for many high-net-worth individuals looking for a safe, stable, and convenient location to reside. With its favorable climate, world-class healthcare system, and vibrant culture, Thailand offers a unique and appealing lifestyle for those seeking a second home. However, before making the decision to establish a second residence, it is important to consider the legal and tax implications, as well as the family’s circumstances and priorities.

In this article, we will outline the key steps based on our experience to take in order to establish a second residence in Thailand, as well as some of the legal and financial considerations you should keep in mind.

Determine your eligibility

The first step in setting up a second residence in Thailand is to determine whether you are eligible to do so. In order to establish a second residence in Thailand, you must have a valid non-immigrant visa. This can be obtained through a variety of means, including work, education or retirement.

Setting up a business in Thailand

There are many legal requirements associated with setting up a business in Thailand. You may need help during the planning stage of your investment or during your day-to-day business operations. In our experience, without the expertise of a law firm that can communicate in Thai, registering your company in Thailand can be complicated and time-consuming.

Obtain the necessary work permit and visa

In order to live in your second residence in Thailand, you will need to obtain certain permits, such as a work permit if business is bringing you to Thailand. As with all work permit applications, experience really speeds up the whole process.

Research property options

The next step once you have decided where in Thailand you would like to set up a second residence is to research the different property options available to you. This may include apartments, condos, or houses. There are many websites and resources available to help you find the right property for you, including real estate agents and online listings. When researching properties, it is important to keep in mind your budget, as well as any legal and financial considerations, such as taxes and insurance, and legal limitations for foreigners.

Register your property

Once you have found the right accommodation, you will need to register your property with the appropriate authorities. This will typically involve filling out various forms and providing proof of ownership.

Tax implications

Thailand has a number of taxes that you will need to consider when setting up a second residence. These may include income tax, property tax, and other taxes and fees.

When considering the tax implications, it is important to keep in mind that taxes are not typically the top priority for families setting up a second residence. Higher priorities include safety, geopolitical stability, healthcare, language, location, climate, schools, cost of living, and quality of life. However, the tax rules and legal system should still be evaluated and considered before making a decision.

Conclusion

When setting up a second residence, it is crucial to work with a reputable and reliable law firm that can guide you through the process. The law and tax firm will work closely with the client’s external advisors to evaluate the family’s matrimonial property regime, estate plan, and tax breaks offered by the destination country. They will also play a key role in ensuring that no aspects are overlooked, as they have a holistic view of the situation.

If you have any legal or tax questions about setting up a second residence in Thailand, please contact our expert team at [email protected]

Fabian Doppler
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Fabian, a founding partner of FRANK Legal & Tax, is a German-trained lawyer with expertise in corporate/commercial and real estate law, and litigation, and has been living and working in Thailand since 2005.

Company Dissolution in Thailand

November 11, 2020 3:12 am Leave a Comment

Dissolution is the process of de-registering a company from the company registry at the Department of Business Development (“DBD”). When considering the life cycle of a business operation, the voluntary dissolution by the shareholders appears to be the usual way to end the company’s operations. There are several circumstances that will lead companies to the dissolution and subsequently, the liquidation process. Under Sections 1236 and 1237 of the CCC, a limited company may be dissolved by the following causes:

By a special resolution (voluntary dissolution by shareholders);
Company’s regulations set forth doing so;
If a company is formed for a specified period of time, by the expiration of such period;
If it is established for a single undertaking, by the termination of the undertaking;
The company becoming bankrupt and
Dissolution by the Court.

Special Resolution (above item 1): With regards to dissolution by using a special resolution, a general shareholders’ meeting shall be summoned by the director(s) or shareholders. Invitations to the meeting have to be sent to shareholders and published in at least one local newspaper at least 14 days before the meeting date. At the meeting, one-fourth of the total shares must be present to achieve a quorum. The special resolution for the dissolution requires a majority of not less than three-fourths of votes present voting in favor, per the requirements under Section 1194 of the CCC. The required period for an invitation, a quorum, and the voting may differ depending on the articles of association (by law) of the company. Apart from the dissolution, shareholders will also get to appoint a liquidator(s) and auditor(s). The dissolution and the name of auditor(s) should be registered at the Ministry of Commerce within 14 days after the meeting.

Dissolution by Court (above item 6): On the other hand, under Section 1237 of the CCC, companies can also be dissolved by the Court if the business of the company can only be carried on at a loss with is no prospect of generating profit. The Court will only adjudge the company’s dissolution in cases where the company has been continuously experiencing losses. However, this will not be the case if the company occasionally suffers losses. A restructuring process may be possible under certain circumstances and such a procedure has been introduced to save certain businesses with viable business plans. A party with a vested interest (e.g., minority shareholder) may be eligible to file such motion to the Court.

If you have any questions regarding the Company Dissolution in Thailand, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.

Thailand Company Overview

May 12, 2020 4:09 pm Leave a Comment

Thailand is a country with many business opportunities for foreign investors; this includes the incorporation of partnerships and companies. There are two types of companies in Thailand, private limited companies and public limited companies. The main differences between the two is the governing law and the sale of shares. Private limited companies are governed by the Thai Civil and Commercial Code and sell shares privately. Whereas, public limited companies are governed by the Public Limited Companies Act B.E. 2535 (1992), and shares are traded on the Thai stock market.

For small businesses, setting up a private limited company is the most common way to start. There are specific requirements that should be met:

At least three founders holding at least one share each,
Value of a share should not be less than five THB, and
At least one appointed director.

The process for the registration for the company can be completed within one day. It must be noted that all information with regards to the directors, shareholders, and any changes in the company structure will be accessible to the public.

With regards to accounting, all juristic persons, including private limited companies, must submit financial statements every year, regardless of the company’s operation status. This means that if a company ceases to operate but has yet to go through the liquidation process, it must still comply with these legal requirements. All companies have the duty to start the accounting period from the date of the company registration.

A “Thai company” means that more than 50% of the total shares are owned by Thai nationals. Therefore, for the company to maintain its status as a Thai company, the amount of shares that foreigners can own must not reach 50%. If the amount reaches 50%, then the foreign company may – if no exemption is applicable – require a foreign business license (‘’FBL’’) to operate in Thailand. Due to restrictions imposed under the Foreign Business Act B.E. 2542,

the government official will consider various criteria before granting an FBL, such as the advantages and disadvantages to the nation’s safety and security, economic and social development, size of the enterprise, local employment, etc. The approval of the license depends on the profits that will be generated for Thailand, and if it promotes Thai interests. The entire process is rather time-consuming and often unpredictable.

Besides the FBL, Thailand also offers other incentives for foreign investors, such as through the Thailand Board of Investment (‘’BOI’’). The BOI was established pursuant to the Investment Promotion Act B.E. 2520 for the purposes of promoting certain foreign and domestic investments that are regarded as welcomed in Thailand. The BOI has discretionary authority to grant specific trade, taxation, employment, financial and other benefits. BOI incentives are divided into two categories, tax incentives and non-tax incentives. Tax incentives depend on many factors such as geographic location, nature of the business, and whether the output is intended for export or domestic sale, whereas non-tax incentives are available for all businesses

Company Registration Process:

The first step of the company registration process is name reservation. To reserve a name, a promoter is required to submit an Online Name Reservation Form to the Department of Business Development of the MOC.

After the name reservation has been approved, the company must then submit the application to register its Memorandum of Association (MOA) and to register the company formation which can be done at the same time.

The MOA must include the name of the company, the province where the company will be located, the scope of the company’s business, the capital to be registered, and the names of the promoters. The capital information must include the number of shares and their par value. At the formation step, the Articles of Association (AOA) (also called bylaws of the company), the director(s) and director(s)’ authority, company’s auditor and the authorized capital, although partly paid, must all be issued.

Although there are no minimum capital requirements for companies registered as Thai companies, the amount of capital should be reasonable and adequate for the intended business operation. Please note that if the company is to employ foreigners, certain minimum paid-up capital requirements for the visa and work permits may apply.

The official fees and stamp duty regarding company registration are as follows:

ฺMOA registration	500 THB
Company registration	5,000 THB
Certificate of registration	100 THB
Stamp duty for MOA	200 THB
Stamp duty for AOA	200 THB

Total amount is 6,000 THB.
An additional 50-baht document examination fee may also be charged.

A company that have one or more employee shall register for Social Security with the Social Security Office within 30 days after the first employment. A company that has a turnover in excess of 1.8 Million THB must also register for VAT with the Revenue Department within 30 days of the date the annual turnover exceeded that threshold.

If you have any questions regarding the business operation in Thailand, feel free to contact us [email protected] or call us at +66 (0)2 117 9131-2.

Liquidation of a Thai company

March 31, 2019 12:00 am Comments Off

At the end of a life cycle of a private limited liability company in Thailand it is necessary to liquidate and dissolve the company by resolution of its shareholders. The procedure, has to follow the rules of the Sections 1247 – 1273 of the Civil and Commercial Code of Thailand (CCC). To proceed with the dissolution and liquidation of the company under the provisions of the CCC, the shareholders are required to do the following:

The Board of Directors shall hold a meeting to adopt a resolution related to the planned liquidation of the company. Then, two shareholder meetings need to be summoned, to give the shareholders the opportunity to discuss the matter. the formality of such meetings will follow the company’s bylaws.
In the first General meeting, a special resolution of shareholders to liquidate and dissolve the company shall be set up. Therefore, the shareholders need to appoint a liquidator and an auditor.
In the second meeting of shareholders, the resolution of the first meeting – to liquidate and dissolve the company – needs to be confirmed. This second meeting has to be held between 14 days and 6 weeks after the first meeting if not a more extended period is required by the articles of association of the corporation.
The company shall place two succeeding advertisements in a local newspaper and send letters to all creditors by registered letter to announce the liquidation of the company. So, the creditors can settle their claims with the company before the dissolution.
All relevant documents need to be submitted within 14 days from the date of the second company meeting to the Commercial Registration Department, Company and Partnership Registration Office and Ministry of Commerce.
The financial statement (Balance Sheet, accounts) prepared and certified by the appointed auditor needs to be approved by a further meeting of shareholders and submitted to the Ministry of Commerce.
The liquidator is required to provide a report to the Ministry of Commerce every three months until all assets and liabilities are cleared, and all debtors are urged to settle their debts. At the end of this process, the liquidator shall set up a final meeting of shareholders to approve the liquidation of the company. Meeting minutes shall be forwarded to the Ministry of Commerce within 14 days from the date of the meeting.

After the final assembly, an application for liquidation of the company must be sent to the Thai Revenue Department and the original Value Added Tax Certificate as well as the original Tax Identification Card needs to be returned in the company’s name.
In order to obtain the final approval of the company’s liquidation by the Ministry of Commerce, a copy of the approval of the liquidation by the Thai Revenue Department has to be sent to the Ministry.
It is the Liquidators duty to deposit all the company’s books at the Registrar’s office, where they shall be stored for 10 years, beginning from the date of the final approval of the liquidation. In practice, the liquidator is asked to archive the books by himself and confirm this to the Registrar in writing.

The entire process of liquidation process takes about 1 – 2 years, depending on the period, the company was operating, the condition of the books and whether tax returns were all duly submitted as required by law.

If you have are any questions regarding company liquidation, feel free to contact us at [email protected]

Company Stamp

July 22, 2017 12:00 am Comments Off

A company stamp or company seal is the official seal used by a company. Company seals are not used in every country, but they are predominant in certain common law jurisdictions and in many jurisdictions of Asia. In Thailand, a company seal is used by practically every registered company.

Affixing the seal has a specific legal significance. Affixing a company seal signifies an act of the company and is a clear indication of authorization under the company’s bylaws. While Thai law (in particular the Civil and Commercial Code) does not force a company to use a company seal, the company may set this forth during the registration of the company, and this may then be stipulated in the company affidavit. Registered companies in Thailand frequently specify in the company affidavit that the the company is legally bound by affixing the director’s signature along with the company seal.

If the company has set forth such a method of authorization, but the document e.g. has only the signature of the director and is lacking the company stamp, then the document is not binding for the company.

The appearance of the seal must follow laws and regualtions as well: it should include the company name in Thai (and additionally in English or another language if that is desired). Furthermore, it must show any suffixes related to the form of the company (such as Co., Ltd. or Company Limited). It may include a picture or symbol as well, but this is not a requirement.

Feel free to contact us if you have any questions: [email protected]

Extension of Capital Expenditure Corporate Tax Deduction

March 1, 2017 12:00 am Comments Off

Under the Royal Decree No. 604 of 2016 (B.E. 2559), tax benefits were given to companies or partnership’s expenses of domestic investment. On 24^th January 2017, the cabinet approved a one year extension of this tax measure, that is for the period from 1^st January 2017 until 21^st December 2017.

It should be noted that the privileges have been amended, in particular the multiple for the calculation of tax expenditure deduction has been reduced from 2 to 1.5.

Accordingly, under this tax measure, expenses can be deductible 1.5 times if they were incurred for the investment in these following assets: –

Machinery, parts, equipment, tools, appliances, decorations and furniture;
Computer programs;
Vehicle except less than 10 seater cars; and
Permanent building which lands and housing are included.

Eligible for deduction are the following assets:

New assets which are invested in 2017 and will be ready for use within 31^st December 2017 (but not including machinery and permanent buildings which may be ready for use afterwards).
Assets which already obtained the 2 times deduction from the Royal Decree no. 604, ifthe assets’ expenses for investment have not been completed and are still carried on in 2017. The multiple of 1.5 will then apply for the deduction under this tax measure.

Please be informed that the company or partnership which applies for this benefit must prepare investment project and expense plans and present these to the Revenue Department.

Find out more about our corporate and commercial services

First Frank Legal MeetUp – Establishing a Company in Thailand

February 25, 2017 12:00 am Comments Off

FRANK Legal & Tax’s first MeetUp on Establishing a Company in Thailand was held successfully on February 10th, 2017 at the company office in Athenee Tower, Bangkok. We plan for the forum to take place once a month, covering a range of subjects related to corporations in Thailand. The next event “Company Formation In Thailand” will take place on March 9th from 18.15-19.45 at our Bangkok office.

FRANK Legal Tax represents fun park company during market entry in Thailand

January 18, 2017 12:00 am Comments Off

FRANK Legal & Tax advises and represents a foreign company in legal matters related to establishing fun parks in Bangkok, with a total investment value of approximately 200 Million THB. Our services include the incorporation of a group of companies, license applications and other related matters.

Find out more about our corporate and commercial services

Dormant Company

February 18, 2016 12:00 am Comments Off

This article summarizes the rules which apply in case of a company stopping its operation temporarily:

1. Notification Requirements

According to Section 85/12 of Revenue Code, if the company wishes to stop its operation for longer than 30 days, the company must submit a notification to that effect to the Revenue Department where the company is located. Such notice shall be filed within fifteen (15) days from the date of stopping the operations. If the company fails to notify regarding the temporary business cessation with the Revenue Department, the company shall be fined in an amount of not more than at 2,000 THB under Section 90 Revenue Code.

As regards to notification of the Social Security Office, the company shall submit an application related to the stoppage of operations temporarily with local Social Security Office within the date of 15^th on the next month from the date of stopping operation. The company is also obligated to notify the Social Security Office to remove all existing employees from the company.

There is no minimum period specified for stopping the operation temporarily.

2. Filing Requirements after Notification

After the Revenue Department has been notified, the company is still obligated to submit monthly and annual tax returns for the Revenue Department, but the returns may show nil amounts. Furthermore, the company shall continue filing annual company financial statements with the Department of Business Development.

3. Forced De-Registration

If the company stops the operation for a period of three (3) years or more without any notification and submission the respective government offices, it shall be deemed that the company no longer carries on any business. By exercising the powers stipulated in Section 1273/1 of CCC, the Company Registrar is authorized to remove the name of the company from the register. The effect would be subject to Section 1273/3 of CCC. The status of the company as a juristic person shall come to an end after the registrar has struck the name of such company off the register.

It should be noted that the liability of directors and shareholders remain and may be enforced as if the status was still that of a juristic person.

If the company feels aggrieved with that result, the company is entitled to submit an application to the court in order to restore the name of company within ten (10) years from the date of removing the company name, according to Section 1273/4.

FLT represents German energy company during market entry in Thailand

June 9, 2015 12:00 am Comments Off

FRANK Legal & Tax advises and represents a German energy company in legal matters related to their market entry in Thailand. The client is in the process of establishing renewable energy plants (VSPP) in Thailand. Our services include company establishment, BOI application and related services.

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