Registration of Holding Company in Thailand

 

Are you planning for a Holding Company Registration in Thailand? Irrespective of the fact as whether you are a Thai or a foreign business owner, you may proceed with that. But before everything, you must know what is a Thai Holding Company and what are its features and privileges. The purpose of this guide is to comprehensively guide on the same. For further assistance, we are always reachable to help you with the best corporate law and accounting services in Thailand.

A Thai holding company primarily exists to hold and control the shares or assets of other companies. It is applicable to both domestic and foreign companies. A holding company cannot purposefully engage in direct business operations. However, it can manage its investments in other companies, known as subsidiaries. Holding companies are common in Thailand, due to their various benefits and advantages.

Key Features & Functions of a Thai Holding Company 

Ownership and Control

The purpose of a holding company in Thailand is primarily to have ownership and control over other companies. It achieves this by acquiring a significant portion of shares or assets of these subsidiary companies. Acquisition of such shares or assets is the "holding company's investments."

Risk Management

By holding diversified investments in multiple companies, a Thai holding company can evenly distribute its risk. If one subsidiary faces financial difficulties or legal issues, the other companies may remain active. Furthermore, these companies can provide aid to the subsidiary at risk. This provides a buffer against potential losses.

Asset Protection

Holding companies can offer asset protection by separating the ownership of assets from the operational risks. This structure can help shield the holding company's assets from potential liabilities incurred by its subsidiaries.

Tax Planning

In some cases, holding companies can facilitate tax planning strategies. Depending on Thailand's tax laws and the countries in which its subsidiaries operate, a holding company may be able to optimize tax efficiency within legal boundaries.

Consolidation of Financial Statements

A holding company typically prepares consolidated financial statements that include the financial results of all its subsidiaries. This provides a comprehensive view of the overall financial health of the entire group of companies.

Financing and Investment

Holding companies can raise capital through debt or equity financing and then use these funds to invest in new businesses or expand existing ones.

Dividend Income

The holding company can receive dividend income from its subsidiaries, providing a steady stream of revenue.

Governance and Decision-making

The holding company's board of directors exercises control over the group and its subsidiaries. This centralized governance can lead to more effective decision-making and resource allocation across the group.

It's important to note that while holding companies can offer various advantages, there are also legal and regulatory considerations to keep in mind. The establishment and operation of a holding company in Thailand must comply with the country's corporate laws and relevant regulations.

Foreigners may own a holding company in Thailand, provided that there is a genuine Thai partner in the business venture. This local partner will be a shareholder that must invest his own capital. It is prohibited under Thailand's company laws to have a local Thai partner who hasn't invested his own capital and holds company shares owned by somebody else. It is thus important to partner with genuine shareholders to operate your business under this structure. 

Benefits of Holding Company Registration in Thailand

Foreign investors choose to open a Thai Holding Company due to its ability to evolve and expand into new companies. It can be through local and/or foreign subsidiaries irrespective of their connections with their present business activities.

Additionally, setting up a Thai Holding Company helps foreigners avoid difficulties when applying for a listing on the Exchange. Holding companies can acquire subsidiaries that have various firm structures and subsidiaries on the list of the Exchange. Through this, they have better chances of having their stock listings without encountering any problems. 

Eligibility to Start a Holding Company in Thailand

There is no need to find a wealthy Thai investor to set up a holding company in Thailand. All you need is a local person you can trust, who can fork over 51% of the registered capital of 100,000 baht. 

You can set up a second company to hold a majority of the company shares and then offer shares from the operating company. This second company, being an investor, has a substantially lower capital than the operating company as its purpose of existence is to hold the operating company's majority of shares. 

What you need then is a Thai investor who can finance the holding company's capital that is much lower than the 51% of the usual 1 million baht required from regular investors. Applying for a holding company can take five to seven days to complete. 

As a result of this arrangement, both the operating and holding companies will be recognized as Thai companies that will be allowed to be involved in any business activity. This is because 51% of the operating company will be held by the holding company, whilst 49% will be held by foreign owners. This 51% is to be held by the true local investor, whilst 49% is to be held by the foreign owner.

Steps of Holding Company Registration in Thailand 

A holding company falls under the Thai Limited Liability Company (LLC) Category. Although LLCs allow companies to be 100% foreign-owned, holding companies require the majority of the company's shares (at least 51%) to be owned by a Thai national. 

To open a holding company, follow the steps of setting up a Thai Limited Company: 

• Reserve a Company Name 
• File the Memorandum of Association
• Organize a Statutory Meeting
• Holding Company Registration
• Tax Registration (Corporate Income Tax, Value Added Tax, and Withholding Tax)
• Open a Corporate Bank Account 

Get Work Permits and Visas 

All foreign employees and directors must get a work permit before being allowed to do business in the country. The company can be eligible to sponsor one non-immigrant foreign member if they meet the Ministry of Labour and Immigration Bureau requirements.

If you're considering setting up a Thai holding company or incorporating any type of business entity in Thailand, it's advisable to consult with Thai legal and accounting experts who can provide tailored advice based on your specific business goals and circumstances. Therefore, for the best professional results, email us at officer@konradlegal.com.

Register a Company in Thailand in 2023

 

Thailand’s extensive regulations and language requirements make starting a business a challenging task. You must know that there are some changes in the process of company registration in Thailand in 2023. The amendments may make the process easier or maybe, difficult for you. However, you can successfully complete the process with the help of reliable experts who can speak Thai on your behalf. 

Our qualified Thai lawyers at Konrad Legal Company Limited are committed to assisting you with a successful business start-up. Additionally, we offer a thorough one-stop solution that includes advice for foreigners looking to invest in or obtain licenses in Thailand as well as aid with tax benefits under the Board of Investment in Thailand (BOI). This article will outline the most current changes to Thai legislation regarding company registration regulations, which take effect on February 7, 2023.

Click the link to know the general rules of company registration in Thailand in 2023

Here are the Updates on Company Registration in Thailand in 2023!

Promoters and Shareholders

A minimum of two natural individuals must act as promoters in order to register a company in Thailand. To represent the company, these promoters must be at least 21 years old and legally able to do so. Promoters often own an equal portion of the business, with the ability to sell shares to third parties when the company is registered. Also, there must always be a minimum of two shareholders for the duration of the business.

Director(s)

To oversee the company’s activities and represent it, the shareholders must appoint at least one director.

Registered Office

The head office of your business must be in Thailand. A copy of the house registration (Tabien Baan) number must be provided. A letter of consent from the landlord is necessary if you’re renting office space.

Minimum Capital Registration

Foreign companies must have a minimum registered capitalization of 2 million THB in order to operate in non-restricted areas. The minimum capitalization requirement for companies operating in restricted industries as defined by the Foreign Business Act is 3 million THB. Thai-owned businesses are immune from these rules, but they still need to be financially stable in order to maintain work visas for international employees.

Statutory Meeting

As part of the procedure to register a company, a statutory meeting must be called.

Bank Certification

Thai shareholders with foreign shareholders are required to have a letter from the bank validating the amount of money in their personal bank account.

Signing of Application Documents

In Thailand, all shareholders, initial promoters, and directors must sign the necessary application paperwork. Click the link for the final checklist of documents required for company registration in Thailand.

Foreign Business License

Before starting operations, you must get a Foreign Business License (FBL) in Thailand. However, this is mandatory only if your company is classified as limited under the Foreign Business Act of Thailand. The FBL approval procedure may take three to six months.

Conclusion

A successful business creation requires an understanding of Thailand’s procedures for company registration. You can speed up the registration process by making sure that the required minimum of promoters and shareholders is met, appointing a director, establishing a registered office, achieving the capitalization criteria, and completing the required documents and certification procedures. 

Konrad Legal Company Limited offers thorough help and direction during the entire process. Please see our dedicated page for company registration in Thailand or contact our team for more information. We will surely help set up a company limited with 100% or a majority of shares held by a foreign business. You can also email us at officer@konradlegal.com and our team will get back to you within 1 business day!

Originally Published on 24 June 2023 by Konrad Legal Company Limited

Top Five Tech Start-Ups From Thailand

Thailand's entrepreneurial landscape has grown recently. The reason being the rapid introduction of over 2,500 companies. Over here, we are going to discuss the top 5 Thai tech start-ups that made an impact.

 
1. ACommerce

ACommerce is a full-service e-commerce solution provider that was founded in June 2013. The mission of ACommerce is to break the logistics bottleneck of Southeast Asia. The objective of the company is to provide an end-to-end solution to the e-commerce clients that would bring the brands and the retailers in one space. Recently, ACommerce has signed a strategic partnership with DKSH, a Swiss-based market expansion service provider.


2. ClaimDi

This amazing mobile application was developed by Kittinan Anuphan. Any car owner who downloads this app will be able to claim his/her insurance within 15 minutes of the accident scene. The app is well-connected with around 15 insurance companies. One of the striking features of the app is the “shake and go”. With this feature, two parties concerned in the car accident can simultaneously claim for the insurance. The future plan is to provide service nationwide and in overseas market of Malaysia and South Korea.


3. Skootar

If you want to find a cheaper and more reliable messenger services in Thailand, download the Skootar app. This app was created by Suwatt Pathompakawan. The services of the app include delivering and picking up documents, cheques, invoices, food, postal documents and other sorts of billing payment. It easily matches a customer with the messenger in no less than 15 seconds. Each service of the app costs around 200 baht that you will be charged at the end of the month.

4.ZmyHome

This amazing portal is exclusively created for homeowners who want to list their property for sale or rent. The portal does not involve any agent. The portal offers services that include home valuation, market monitoring, mortgage centre, escrow account, etc. The main objective of this portal is to eliminate high commission and liquidity of the real estate market in Thailand.


5. Maker Zoo

This start-up offers 3D printing services to inspire people to create their own products. The user will have access to produce various designs. The focus of Maker Zoo is on providing knowledge, tools and skills for the development of products.

These amazing start-ups have brought a technology transformation in Thailand.