Learn how to legally set up a business in Thailand as a foreigner.

Doing Business in Thailand as a Foreigner: What You Need to Know

Thailand presents promising opportunities for foreign entrepreneurs and investors, but navigating the legal framework is essential before starting a business. The Foreign Business Act (FBA) B.E. 2542 (1999) restricts foreign ownership in many sectors unless a Foreign Business License is granted. While larger investors may benefit from BOI promotion and enjoy exemptions, small-scale foreign business owners often face legal limitations due to low registered capital.

Author’s Note:

If you're planning to set up a limited company in Thailand, essentially the Thai legal entity through which you'll operate and obtain a visa and work permit for running a bar, restaurant, or even buying property, you’ll quickly find that the law can often be technically circumvented. That said, things become much more complex when you step into sectors like land development, tourism, boat tours, or anything involving foreign guests. In these industries, additional restrictions apply: foreign shareholder participation may be limited, and company management often needs to be majority Thai.

While almost everything is theoretically possible in Thailand, it’s important to stay grounded. The more you have to bypass restrictions, or rely on investment arrangements involving Thai partners, the more unstable and risky the legal structure becomes. Success here requires more than just capital; it demands a clear understanding of the legal landscape and genuine trust in your local partners. Be realistic, plan carefully, and don’t underestimate the importance of good advice.

To bypass these restrictions, many foreigners choose to register a Thai majority company, using Thai shareholders to meet the legal requirements. However, relying on nominee shareholders, Thais who hold shares on behalf of foreigners, is a risky practice that violates Thai law. Although it is difficult for authorities to prove a nominee arrangement directly, there are clear legal expectations around actual shareholding and investment. In practice, many companies register with 2 million THB in capital without ever depositing that amount in a bank account. This capital often exists only on paper as a legal liability, not as real, injected funds. If investigated, the lack of genuine investment, especially from Thai shareholders, can expose the company to legal scrutiny and penalties.

This FAQ section aims to clarify the rules, risks, and opportunities of foreign investment in Thailand, helping you make informed and compliant decisions before launching your business.

Can a foreign company do business in Thailand?

Yes, but a foreign business license or exemption (e.g. treaty or BOI promotion) is required under the Foreign Business Act. See the Department of Business Development or BOI for more info.

How many shareholders are required in a Thai limited company?

A Thai limited company must have at least 3 shareholders. While foreigners may be shareholders, various laws define the threshold for foreign ownership and control differently.

Can a Thai company issue different share classes?

Yes. Unequal voting rights are allowed. This enables minority (foreign) shareholders to retain control. However, Thai authorities monitor foreign control closely to avoid misuse.

What is the nominee shareholder issue?

Foreigners using Thai nationals to hold shares on their behalf are considered to breach the law. This is illegal under the Foreign Business Act. Read more...Limited Company - nominee shareholders in a Thai company

When is a Thai company deemed foreign?

When foreign ownership exceeds 50%, or Thai shareholders are determined to be acting on behalf of foreigners, the company is classified as foreign and subject to restrictions.

When must proof of shareholder investment be submitted?

Thai shareholders in companies with foreign participation must prove they have the means to pay for their shares to prevent nominee structures.

What are the responsibilities of shareholders and directors?

The Civil and Commercial Code defines shareholder and director duties. Internally, the company by-laws govern conduct. External compliance includes taxation and business law.

What is the VAT rate in Thailand?

As of June 2025, the standard Value Added Tax (VAT) rate in Thailand is 7%. The standard rate is 10% but temporarily reduced to 7%. Not all businesses must charge VAT, depending on size, income and activity. Thailand Revenue Department

Does every business need to charge VAT?

Businesses exceeding 1.8 million THB in annual turnover must register for VAT within 30 days of passing that threshold.

What is the corporation tax rate in Thailand?

As of June 2025, Thailand's standard corporate income tax (CIT) rate is 20%, applicable to most companies operating within the country. See the Revenue Department for details.

What are the personal income tax rates in Thailand?

Progressive rates from 0% (anything under 150000 THB up to to 35% (anything over 5.000.000 THB), see Personal Income Tax (PIT). All income earned in Thailand by residents and non-residents is taxable.

Does an inactive company still require accounting?

Yes. Financial statements must be prepared and submitted annually, even for dormant companies. This is the legal responsibility of the managing director.

What are the accounting principles in Thailand?

Thai accounting follows international principles, but documents must be accompanied by a Thai translation. A certified accountant is required.

What is the minimum share capital?

Minimum is 1 million THB. To support work permits, 2 million THB per foreign employee is needed (up to 3 foreigners = 6 million THB) in a Thai Limited Company, but exemptions variations apply, see Ministry of Labour.

What laws govern foreign business in Thailand?

Primarily the Foreign Business Act. Other industries may be subject to additional laws and restrictions or exemptions.

What is the difference between private and public limited companies?

Private companies follow the Civil and Commercial Code. Public limited companies are governed by the Public Company Limited Act B.E. 2535.

Where can I find laws on Thai companies?

The Civil and Commercial Code includes these. See this section of the Civil and Commercial Code of Thailand.

Who signs for the company?

The managing director, or jointly authorized directors as per the company’s articles of association.

Can I control a majority Thai company?

Yes, under current law. However, authorities monitor for unbalanced control structures involving foreigners.

Can I own real estate via a Thai company?

A majority Thai-owned company can own land, but authorities scrutinize ownership structures for compliance. Read more...Real Estate and Property law for foreigners

Can I form a company only to hold property?

No. Shell or SPE companies without real business activity are not permitted. Real operations and compliance are required.

Can I work via my Thai company?

No. You must obtain a Work Permit issued by the Labor Ministry before undertaking any business activity. Read more...

How do I form a Thai company?

Reserve a name, prepare company documents, and register with the DBD. Majority Thai ownership is required, and nominee shareholders are illegal.