How can a foreigner own a business in Thailand?

Thailand is one of the most popular holiday destinations in the world, and each year thousands of tourists descend upon its shores with many of them falling in love with the country and planning to move there long term. 

For some this remains a dream, but the few determined ones who manage to turn this into reality often look at options of starting or buying a business as a way to earn a living. 

While Thailand offers ample opportunities for foreign investors, navigating the legalities of business ownership requires careful consideration and adherence to regulations. By understanding the available legal structures, the restrictions on foreign ownership, and following the necessary steps outlined by authorities, foreigners can establish and operate successful businesses in the Kingdom. With due diligence and professional guidance, the dream of owning a business in Thailand can indeed become a reality.

One of the most important considerations is that in most cases foreigners cannot own a business in Thailand outright and need Thai partners. There are some exceptions to this rule which we will cover later. However, in most cases foreigners cannot own more than 49% of a limited company and a limited company must have at least three promoters (shareholders).

There are agencies that will provide nominee shareholders at a cost, however this is a grey area legally and should be approached with caution. 

How to register a limited company in Thailand as a foreigner

The first part of registering a limited company starts with choosing a name, it’s usually best to have two or three potential names in mind in case your first choice is not available. 

You can check if your chosen company name is available and start the registration process on the DBD website, however as everything is in Thai, it’s usually best to have someone help you with this. There are agencies in all areas of Thailand which specialise in business registration for foreigners. 

If you choose to use an agent to set up your company, they will normally recommend to register the company with 100% Thai ownership first. Doing it this way means that you won’t need to show proof of registered capital, meaning you can effectively register a company with zero cash in the bank. 

In order to be able to get a work permit through your company, you will need to have registered capital of 2M baht. If you register with 100% Thai ownership and then transfer 49% of the shares to you, the foreigner after 30 days, no proof of funds needs to be shown. The 2M baht registered capital is purely a paperwork exercise. 

If you don’t have Thai business partners and choose to go the nominee shareholder route, then it’s often advised to use two people who are not connected so they are less likely to work together to overthrow you if the business becomes very successful and they see an opportunity to make some quick cash. 

Thai limited companies need at least one director, in most circumstances this should be you so that you remain in control of the company. 

Remember that your shareholders out number you in numbers of shares and voting rights, so they could technically outvote you and have you removed as a director.

There are potential ways to avoid this by having a contract drawn up, signing the voting rights back to you or ensuring the type of shares they own are preferred shares. Again, this is a grey area in terms of legality, so it’s important to get expert advice on the structure of your company. 

Can a foreigner own a company outright in Thailand?

The simple answer is yes, but it’s rarely that simple! 

There are two ways that a foreigner can own a Thai company outright and they are as follows:

If you are an American citizen, you can set up a Thai company using the U.S.-Thai Amity treaty. Meaning that at least 51% of shares must be owned by US citizens. Work permit rules still apply, so if you wish to have a work permit through your Thai company you must have at least 2M baht of registered capital and 4 Thai employees (unless you are married to a Thai citizen, the rules are slightly different).

The other option is by receiving a Foreign Business Licence, most commonly issued after getting BOI Approval for an eligible project with investment into your Thai company.

How to get BOI Approval for a business in Thailand

The Board of Investment is a government agency tasked with promoting investment in Thailand by offering incentives and facilitating foreign and domestic investment projects. BOI approval grants eligible businesses access to a range of benefits, including tax incentives, import duty exemptions, and streamlined regulatory processes. These incentives aim to attract investment in targeted industries and promote economic development.

The BOI promotes investment in specific industries deemed vital to Thailand's economic development, such as manufacturing, agriculture, tourism, and services. Eligible activities vary depending on the industry and may be subject to certain conditions or restrictions.

Obtaining BOI approval means that you may be eligible for 100% foreign ownership depending on the size of the investment. BOI Approval also offers easier work permit and business visa processes. Work permits and visas can also be issued for a 2 year period instead of the normal one year. 

How to buy a business in Thailand

As well as seeing an influx of foreigners relocating to Thailand, we also see foreigners who have been living in Thailand and running businesses there who are returning to their home countries for different reasons. This offers opportunities to buy a business in Thailand which is already established and hopefully profitable. 

It’s important to do due diligence to see if the company has any debts which you may become responsible for or whether there are any unpaid legal bills such as tax or VAT. 

If the previous company owner had a work permit through the business, then it should be easier for you to also get a work permit but you will still need to ensure that you meet the criteria regarding qualifications and experience along with the requirements of 2M baht capital and 4 Thai employees.

If you are married to a Thai national, then it is possible to get a work permit with only 1M baht capital and two Thai employees. 

Finding a business to buy in Thailand can be a stressful experience in itself, Done Deal makes it easier by listing legitimate businesses for sale and offering expert advice on the whole process.