Register LLP in Thailand

 

To start a business in Thailand, business owners have two partnership options. An ordinary partnership involves two or more individuals sharing unrestricted responsibility. A limited partnership, on the other hand, consists of at least two people but provides limited liability to the limited partner, whereas the general partner has unlimited liability. Using the second concept, you can register a LLP in Thailand. It will be a Limited Liability Partnership firm in Thailand.

Understanding the intricacies of forming a limited partnership in Thailand can be challenging for business owners. Konrad Legal is here to offer assistance. Our legal team can assist with the preparation and submission of the necessary documentation on your behalf, ensuring a smooth process. Additionally, we can provide clarity on how liability is distributed within a limited partnership structure, helping you make informed decisions about your business.

Benefits of a Thai Limited Liability Partnership (LLP)

The allure of benefits draws many individuals to establish a limited liability partnership firm in Thailand.

Among the partners, the ordinary partner gains the most significant advantage due to limited liability. The ordinary partner is only held accountable for the amount of capital they invested. For instance, a limited partner who contributes 1 million Baht to the business may only lose that specific sum, even if the partnership incurs additional expenses, thereby limiting the extent of their potential losses.

In Thailand, a limited partnership provides entrepreneurs with operational flexibility. The Thai government permits limited partnerships to engage in various activities without limitations. Businesses can operate in various industries, although they may require licenses based on the scope of their operations. If necessary, Konrad Legal can assist you in acquiring the necessary licenses.

Additionally, existing partners have the authority to decide whether or not to admit new partners into the business. Unanimous approval from all partners is required before a new partner can be integrated into the business.

Furthermore, this partnership enables foreign ownership of up to 49 percent without the need for a foreign business license. This makes it convenient for foreigners seeking to establish businesses in Thailand to collaborate with nationals. It is noteworthy that if a foreign shareholder holds more than 49 percent of the business, they must obtain a foreign business license in Thailand to obtain which, we have dedicated services to help you.

Drawbacks of an LLP in Thailand

Unfortunately, there are also some drawbacks to consider before starting a limited partnership in Thailand.

First, the general partner has unlimited liability for the debts and obligations of the partnership. Assume that both partners invest 1 million Baht into the business. The limited partner is only liable for that amount, but the general partner’s liability is not limited, and can lose much more money. This puts the general partner at greater risk when operating the business.

Some also view business management as a drawback when operating a limited partnership in Thailand. The general partner has full control of the day-to-day operations. The limited partner cannot assume control of the daily operations without upgrading to a general partner.

Also, unlike an ordinary partnership, partners must file paperwork to set up a limited partnership. In addition, they must go through steps to dissolve the partnership. While many view this as an obstacle, we make the process of documentation and paperwork easy for the partners. The legal team can even help dissolve the partnership if needed.

Legal Requirements for LLP in Thailand

There are certain requirements in place for setting up a limited partnership in Thailand.

First, if the general partner is a foreigner, they will need a work permit or a non-immigrant business for business or work purposes. A foreign business license is also necessary if a foreign partner invests more than 49 percent into the business.

Thailand’s government requires 2 million Baht in capital to start the business. The partners do not need to contribute equally.

Timeline for Setting Up a Limited Partnership in Thailand

It takes approximately one week to set up a limited partnership in Thailand if you proceed correctly. This is the reason our clients choose us to ensure that the entire process goes smoothly and you can start your business fast.

To begin the process, the partners must complete and apply for registration to the Department of Business Development. Along with the application, the partners must settle the applicable fees.

The application can be cumbersome sometimes. It must include data and information related to the partners and the business as a whole comprising the objectives and nature of the same. 

If you’re ready to set up a limited partnership, contact Konrad Legal today by emailing us at officer@konradlegal.com. You will receive a quote and then can move ahead with us in the process of registering your limited liability partnership in Thailand.

BOI Thailand Benefits to Realtors for Affordable Housing

 

The Board of Investment of Thailand has now focused on the housing options for low-income Thais. This approach is to enable and encourage housing developers or agencies to deliver housing facilities at affordable rates in the market.

Announced on March 15, 2024, the key points of this scheme are as follows:

• Developers seeking tax privileges from the Board of Investment (BOI) must have plans to build townhouses, single-detached houses, and condominiums worth 1.5 million THB or less.

• Each townhouse or detached property must have a floor area of at least 70 square meters, while condominium units must have a minimum floor space of 24 square meters.

• To qualify for the tax privileges, property developers must also obtain endorsement from the Government Housing Bank (GHB).

• Developers interested in this promotion must submit their applications to the BOI before the end of the following year (2025).

What are the Benefits?

To stimulate the creation of affordable housing for low-income households, the Board of Investment (BOI) provides lucrative tax incentives to qualified real estate development projects.

These projects are exempt from corporate tax for up to three years, covering 100% of investment costs excluding working capital and land acquisition. These exemptions apply to investments in roads, public amenities, and public use spaces within the development's scope.

In response to the demand for affordable housing options, the Bank of Thailand's (BOI) tax incentives for developing housing for low-income Thai citizens, coupled with the government's measures to expand the price range eligible for reduced transfer and mortgage fees, aim to address this critical need. These initiatives not only benefit homebuyers and real estate developers but also have broader economic implications. By stimulating various sectors and promoting economic growth, they contribute to the overall well-being of the Thai economy.

With the government's commitment to providing accessible housing solutions, the Thai real estate market is poised for positive growth. These measures create opportunities for low-income individuals to secure affordable housing, while simultaneously supporting property developers in addressing this crucial societal need.

Not all Projects are eligible for this BOI Promotion!

To qualify for the BOI Thailand promotion, at least 80% of the project's residences must comply with the usable area and price criteria. The minimum usable area is 24 square meters for condominium units and 70 square meters for townhouses and detached houses. Furthermore, the residences can be sold solely to private individuals, and the sale price for each condominium unit or house (inclusive of land price) should not exceed THB 1.5 million.

Additionally, the projects must comply with the following:

• Have a car park, CCTV throughout the project, a 24-hour security guard, cleaning staff, a common area, and other facilities in appropriate proportions.
• Obtain BOI approval of the building plan and layout.
• Hold a permit for the construction of a building under building control laws and other relevant regulations.
• Obtain approval from the Government Housing Bank before applying the BOI.

Companies must submit applications for promotion to the BOI by the end of 2025, as per the official notification. New low-income residential projects promoted by the BOI will receive a corporate income tax exemption for the same duration as A4-promoted activities (usually three years).

Only the construction costs associated with roads, other facilities, or public utilities commonly used within the project will be considered when calculating corporate income tax exemptions. Construction costs for residences, houses, buildings, or commercial structures, regardless of whether they are intended for lease or sale, are not included.

How can we help?

The BOI formulates the schemes and we help individuals and businesses adhere to the eligibility and process parameters flawlessly. In this effort, we can help you with:

• Company Registration in Thailand - you need a company before applying for BOI Promotions
• Project Feasibility Study for BOI Promotions
• Documentation Support for BOI Application
• Setting up your Accounting and Tax Systems

All you need to do is email us your requirements at officer@konradlegal.com for our team to know you and your project. Henceforth, it is on us to enable your business to avail of BOI Promotions in Thailand.

BOI Thailand Benefits for Regional Operating Headquarters in Thailand

Talking about Board of Investment privileges, it is known to most of us that almost all types of business structures, be it LLPs, LLCs, Sole Proprietorships (only Thai ownership), etc. can be eligible for the same provided their business deals with the BOI eligible activities. But what if you are planning to expand your business in Thailand - you can register your Regional Operating Headquarters in Thailand and enjoy seamless BOI privileges.

To boost business activity in Thailand, the Thai government has introduced the Regional Operating Headquarters (ROH) scheme. This instrument offers incentives to investors who set up a regional headquarters in the country and provide "qualifying services" to branches or affiliated companies both within and beyond Thailand's borders.

Regional Operating Headquarters (ROH)

In 2002, the Revenue Department introduced the first set of ROH incentives, which included both tax and non-tax incentives, with the primary goal of attracting more investment in Thailand. Some of the tax incentives offered by the Revenue Department include:

• Corporate income tax reduction from 30% to 10% is offered on net profit stemming from offshore branches and associated companies.
• Dividends received from both domestic and foreign subsidiaries of ROH are exempt from taxation.
• Withholding tax exemption is granted for dividends paid out from ROH to foreign companies that do not conduct business in Thailand.
• A reduced personal income tax rate of 15% applies to the salaries of expatriates working with ROH, instead of the progressive tax rate ranging from 5% to 37%.
• An initial allowance of 25% on buildings is provided upon acquisition.

Board of Investment Option

Investors who seek non-tax incentives should apply directly to the Board of Investment (BOI). Here are the incentives that applicants may receive from BOI:

• Permission for foreign investors to own land.
• Permission to bring in foreign specialists and technicians.
• Facilitation of work permits and visas

In 2010, the Thai government revisited strategies to enhance Thailand's competitiveness in the regional market. The government aimed to provide fresh incentives to attract foreign investment and create a more favorable environment for businesses

Incentives from the Board of Investment

For a Regional Operating Headquarters (ROH) to qualify for BOI incentives, it must meet the following criteria:

• The Thai Revenue Department must confirm the business entity as ROH.
• It must be a juristic company or partnership incorporated under Thai law.
• It must have a paid-up capitalization of not less than 10 million baht.
• It must provide services to its branches or companies in at least 3 countries.
• It must earn half of its income from qualifying services provided to its branches or associated companies outside Thailand.

Definition of Services

“Qualifying Services” are the services that must be in line with the business of the ROHs to be eligible for the BOI Incentives in Thailand. The list of such activities that make these ROH eligible under the Investment Promotion Act of BOI Thailand is as follows:

• Organizational administration and management business planning
• Sourcing of raw materials, parts, and finished products
• Research and development activities
• Technical support
• Marketing and sales promotion
• Regional human resources training and development
• Business advisory services ( financial management, marketing, accounting, etc.)
• Investment feasibility studies and economic and investment analysis
• Credit management and control
• Other services shall be approved by the BOI on a case-by-case basis.

For any inquiries you may have, don't hesitate to contact our dedicated corporate Thai lawyers. Our legal experts are always ready to assist you and provide valuable legal guidance. Email us at officer@konradlegal.com to book a session of free email consultation.

Starting Regional Operating Headquarter in Thailand

 

Are you planning to control your subsidiaries or associated enterprises located worldwide from Thailand? Register a Regional Operating Headquarter or ROH in Thailand to do so and avail the Board of Investment (BOI) promotions in Thailand. To Register your ROH in Thailand, we can help you throughout the process after you check your eligibility to have so from this article.

Conditions: Regional Operating Headquarter (ROH) in Thailand

To register a Regional Operating Headquarter in Thailand, it must comply with the following conditions:

a. No. of Associated Enterprises/Subsidiaries worldwide

To be eligible to obtain recognition as Regional Operating Headquarters in Thailand, the company must have associated companies or subsidiaries in countries outside Thailand in the following order:

• One associated enterprise/subsidiary by the end of the 1st and 2nd Accounting period.
• Two associated enterprises/subsidiaries by the end of the 3rd and 4th Accounting period.
• Five associated enterprises/subsidiaries by the end of the 5th Accounting period onwards.

b. Paid-up Capital and Spending

• The organization must have a paid-up capital of 10 million THB at the end of each accounting period.
• An ROH must have a total business spending of at least 15 million THB per year which must be the total operating costs in Thailand excluding any type of expense made overseas.
• The business must have a total investment spending or actual payment of at least 30 million THB annually.

c. The associated enterprises or subsidiaries must have actual business operations with a physical office, management, and employees working for the same.

d. The overall strength of the skilled staff must be maintained at 75% of the total employees by the end of the 3rd accounting period.

e. Average remuneration for at least 5 employees must be at least 2.5 million THB per annum by the end of the 3rd accounting period.

Benefits of Registering ROH in Thailand

On registering a Regional Operating Headquarter in Thailand, both the business and the expatriate founder benefit individually.

Benefits for the Business

• Exemption from corporate income tax (CIT) on net profits for income. It must be derived from services provided to foreign branches or associated enterprises of the registered operator for 10 years.
• A 10% CIT rate on net profits for income derived. The income should be from services provided to domestic branches or associated enterprises of the registered operator for 10 years.
• A 10% CIT rate on net profits for qualified royalties for 10 years.
• A 10% CIT rate on interest received from foreign branches or associated enterprises of the registered operator for loans granted. Note that such loans must be from other sources and extended to the registered operator’s branches or associated enterprises for 10 years.
• Exemption from CIT for dividends received by the registered operator from associated enterprises incorporated abroad for 10 years.
• Exemption from CIT for dividends paid out of the registered operator’s concessionary profits to its juristic shareholders incorporated abroad and not carrying on business in Thailand for 10 years.

Benefits for the Expatriate

• Expatriates can choose from a tax rate of 15% on their remuneration. It must be derived from the registered operating headquarters (ROH) for eight consecutive years.
• Tax exemption in Thailand on income paid by a foreign company for services rendered abroad. To be eligible for this, there should not be any direct/indirect deduction as an expense of the ROH or its associated enterprises in Thailand. This applies to expatriates planning to work in another country the ROH.

The Bottomline

A company can apply for an extension of the ROH privilege for five more accounting periods. This is possible only if it meets all the required criteria in each accounting period. Furthermore, it must accumulate business spending of more than 150 million THB by the end of the 10th accounting period.

As the name itself, a “Regional Operating Headquarters” provides big benefits for expatriates in Thailand. If you are a foreign investor and planning to set up your business as an ROH in Thailand, feel free to write to us at officer@konradlegal.com and book your round of free consultation with us.

BOI Thailand Promotions for Green Investment Projects

 

Thailand has a well-established history of enforcing environmental protection policies. The country's development strategies prioritize green growth, and it has set consistent climate change mitigation targets. To foster green initiatives and industries, Thailand offers investment incentives as well.

Nevertheless, this time the Board of Investment of Thailand devised a plan and proposal to mitigate environmental threats. The Board of Directors of BOI Thailand has taken steps to encourage investments that reduce PM2.5 particulate pollution, as announced by BOI Secretary-General Narit Therdsteerasukdi.

Image Source: Board of Investment (BOI) Thailand

To address the current smog situation, BOI collaborates with the Ministry of Natural Resources and Environment to empower local organizations and farmer groups through various environmental management methods that lead to sustained PM2.5 pollution reduction.

Scope of Investment

The announced measures expand the scope of investment promotion support to include community and social development. They involve supporting local organizations and farmers to improve environmental standards within communities.

Specific focus areas include forest management in areas like community forests, conservation forests, and national forest reserves, aiming to alleviate the nationwide issue of PM2.5 pollution.

In addition, BOI prioritizes promoting investments in projects with minimal harmful effects environmentally and reducing pollution across various sectors such as industry, energy, transportation, and agriculture. Past efforts include supporting alternative energy production and use, upgrading industries with energy-efficient machinery and environmentally friendly technologies, and promoting electric vehicle industries.

Eligible Activities and Promotion

Activities eligible for benefits under these investment promotion measures include constructing firebreaks in wet-forest areas, building moisture-retaining ridges, providing firefighting tools and equipment, and offering training on forest fire prevention and control.

Operators involved in forest management and PM2.5 pollution reduction activities that meet the Ministry of Natural Resources and Environment criteria can receive a corporate income tax exemption for three years, not exceeding 200% of the actual investment in supporting local organizations and farmer groups.

The investment promotion measures have been extended for an additional year beyond the original end date, encompassing three measures: investment stimulation for economic recovery, a retention and expansion program, and a relocation program.

The deadline for submitting investment promotion applications has been extended to the final business day of 2024.

Already Promoted Projects

In other news, BOI's board of directors approved investment promotion privileges for two projects worth a combined 18.67 billion baht. The first is a biofuel production project using used vegetable oil, with an investment value of 10 billion baht. The second is a Smart Distribution Centre project, focusing on warehouse management and digital technology for product distribution across various industries.

Do you have a plan to start a Green Project in Thailand? Then be assured that it will be eligible for BOI Promotion in Thailand granting you all the benefits as announced.

As a leading corporate law firm in Thailand, Konrad Legal can help you in obtaining BOI Promotion in Thailand.

Are these benefits applicable to all global investors and are you eligible to apply for BOI Thailand promotions?

1. What are the steps of getting a BOI Thailand Promotions Certificate?
2. What to do before and after registering your BOI Company in Thailand?

To get answers to such or more complicated questions, you must consult with a leading corporate law firm in Thailand with experience in BOI Company Registration.

For direct support, feel free to email us at officer@konradlegal.com.