subject: Legal establishment and regulatory matters [print this page] Legal establishment and regulatory matters
When one understands the processes involved and the reasons for those processes, an entity incorporation or registration in Thailand is fairly straight forward, but unfortunately, it involves a semi-trailer load of documents, and a power of attorney needs to be provided to a Thai lawyer in order for the incorporation/registration of theentity in Thailand to proceed.
Procedures for establishment
First and foremost, a US corporation is usually required to obtain the certification document' as previously mentioned from the Commercial Services Office of the US Embassy in Thailand. With the certification document', the lawyer will then, for a Thai private limited company entity, incorporate such an entity for you. There are no provisions under Thai law to permit shelf- companies to be established and sold, and so, the lawyer in Thailand will establish the private limited company in Thailand from scratch.
The same incorporation procedures will also be undertaken for an ROH company in Thailand, but additionally, the lawyer in Thailand will also register' the company as an ROH entity with the Thailand Revenue Department. No incorporation procedures are required for a branch office, representative office and/or a regional office entity in Thailand. Instead, and again, after the US certification document' has been obtained, the lawyer will merely register' the US corporation for the particular office, and obtain a license' for the US corporation to carry out its activities under that registration.
Minimum capital requirements for the entity structure
Thailand's Foreign Business Act prescribes a minimum "capital" amount of Bt 3 million (about $100,000) or for any foreign company's entity in Thailand. US citizens and US corporations
Should note that whilst the Treaty of Amity may override the Thai FBA in relation to ownership, it does not however override the Thai FBA in relation to the minimum capital requirements of foreign entities in Thailand.
Thus, for any of the legal entities of company, branch office, representative office or regional office, a minimum amount of Bt 3 million (or about $100,000) is required for establishment of the entity in Thailand. This minimum amount of Bt 3 million forms the "capital" of the entity (similar, if you like, to share capital), it shall be actually remitted into a Thai Baht bank account (you cannot hold this sum in a USD account in Thailand) and it is required to stay in Thailand under the termination of the entity in Thailand, but of course, it can be used for the purposes of the entity.
For an ROH in Thailand, the minimum amount of capital is increased to Bt 10 million (or about $330,000).
Minimum capital requirements for each non-Thai (foreign national) employee in Thailand
You need to note however, that in addition to the minimum capital requirements under the Thai FBA, Thailand's Foreign Employment Act prescribes that for work permit and immigration purposes, the employer entity in Thailand shall have paid-up capital of at least Bt 2 million (or around $67,000) per foreign national employee (including US national employee) in Thailand.
Thus, in addition to meeting the required capital amount of a minimum of Bt 3 million stipulated under Thailand's Foreign Business Act, if a US corporation will be seconding foreign nationals (including US nationals) to work as employees of the entity in Thailand, the entity in Thailand will be additionally required to meet the Foreign Employment Act requirement and have at least Bt 2 million of paid-up "capital" in Thailand for each foreign national employee.
