Fully Foreign Owned Company in Thailand: possible and convenient
Despite what is believed, opening a Fully Foreign Owned Company in Thailand (company with 100% foreign shares) is possible by taking advantage of certain government structures and incentives. Let’s see in which cases it is not only possible but convenient.
A limited liability company operating in a sector promoted by The Board of Investment can always be 100% incorporated by foreign investors. In addition to full ownership, such a company can benefit from tax and non-tax incentives; other concessions related to visas and work permits are included.
United States Treaty of Amity
US citizens can exercise 100% foreign ownership of a company in Thailand using the bilateral agreement of the US-Thailand Friendship Treaty.
Representative offices and regional branches
Companies registered abroad can open local units under the direct control of the parent company. They will have specific restrictions on operations and on the generation of profits / revenues. In general these units cannot carry out commercial activities or register licenses.
A limited liability company with the sole objective of purchasing and exporting products or materials outside Thailand can have 100% foreign shares.
A limited liability company with the sole purpose of producing goods and exporting them outside Thailand can have 100% foreign shares.
Company based in the Free Trade Zone
A company under Thai law based and operating in the Free Trade Zone can be 100% owned by foreign investors. The free Trade Zone represents a good solution for manufacturing industries. The ones importing raw materials and machinery from abroad and transform them substantially (i.e. change the HS code), re-exporting them to other countries falls into this case. Furthermore, there are exemptions for duties, VAT and for visas and working permits for foreign citizens.
Foreign-owned limited liability company
A limited company can be a Fully Foreign Owned Company in Thailand applying for a foreign business license. The activities of this company are however limited by the restrictions of the Foreign Business Act. In this case the companies have severe restrictions and are subject to the Foreign Business License, the obtaining of which is rather complicated for some sectors of activity. Wholesale and retail require, in order not to be subject to the license, a share capital of 100 million THB for each warehouse / shop. Obtaining of the license takes 4/6 months and is questionable by any official.
For many investors, the traditional Thai company with 51% national shares is not the only solution. It all depends on the structure and the activity you want to undertake.
Siam Trade Development supports your investments with customized projects, also managing it on your behalf during travel restrictions. Contact us for further information.