There are several misunderstandings of businesspeople in Thailand regarding company structuring and foreign shareholding quota. H&P Bangkok lawyers have prepared a brief summary of one the most common misunderstandings when it comes of setting up companies in Thailand for export business.
According to Thailand Foreign Business Act, the export business is one of the main exceptions and do not need to follow the quota of 51% Thai and 49& foreigner. In other words, foreigners can have 100% control of the company by registering for Foreign Business License with the Department of Business Development (DBD).
A foreign entrepreneur who wishes to apply for a business license according to the second and third chart attached to the Foreign Business Act 2542 must comply with the Ministerial Regulations prescribing criteria and procedures for applying for a business license under Section 17, B.E. of a foreigner under Section 17, B.E. 2554.
A foreigner eligible to apply for a business license under Section 17 under the second category must be a juristic person registered in Thailand.
Firstly, the applicant for a license must complete the application form and the add the applicant’s signature or vi the signature of the applicant’s lawyer in case of authorization to another person to act on his or her behalf.
Secondly, submission of copies or photographs of evidence or supporting documents. The applicant must certify the authenticity of the copy or photograph.
Regarding the procedures, timeframes, and responsible divisions, we are referring to a timeframe of 60 days.
1) Document verification
Receive the request/ Review the request/ Issue the request fee payment order – in 1 day.
2) Consideration
The officer analyses and summarizes the request/submit it to the committee for opinions to be presented to the Minister of Commerce – in 25 days.
List of supporting documents
1) Application form for a business license under Section 17 (Form Tor.2) – 1 original.
2) Certificate of juristic person – 1 copy. Remarks: Or proof of juristic person showing the list of names, registration date, Place of registration, capital, purpose, office location, Name list and nationality of directors and authorized signatory.
3) Letter informing the proportion of shareholding between Thais and foreigners, number of shares, type or type of shares held by foreigners – 1 copy.
4) Certification of the applicant showing that the director’s license applicant or manager has qualifications and not has prohibited characteristics according to Section 16 of the Foreign Business Act B.E. 2542 – 1 original copy.
5) Letter informing the details of the type of business applying for the license *** – 1 original copy. Remarks: The Foreign Business Committee and the Cabinet may prescribe details of information according to the type of business wishing to apply for additional licenses to be consistent and suitable for the current economic situation.
6) Map showing a brief location of the place of business in Thailand – in 1 copy.
7) Power of Attorney affixed with 30 baht duty stamp – in 1 original copy.
8) Identity card of the authorized person – in 1 copy. Remarks: In case the authorized person is a Thai person.
9) ID card of the attorney-in-fact – in 1 copy. Remarks: In case the recipient is a Thai person.
10)The original license, a copy of Thailand’s financial statements for the past 3 years and a copy of the latest 50-year Phor Ngor Dor (in case of ever being permitted to operate a foreign business) – in 1 copy.
11) Evidence documents that the applicant must submit (depending on the type of business) – in 1 copy.
12) Passport of authorized person – in 1 copy. Remark: In case the grantor is not a Thai person.
13) Foreign identity card of authorized person – in 1 copy. Remarks: In case of using instead of a passport.
According to Section 17 of the Foreign Business Act B.E. 2542, the Cabinet Consider approving or permitting foreigners to complete the business under the second chart within 60 days from the date of application submission. In the case of approval of the Cabinet due to necessity, the Council of Ministers could only complete the consideration after such period. The consideration period can be extended as necessary. However, this must be at most 60 days from the expiration date.
The process will start counting from the time the officer has verified the complete documents as specified in the public service manual. If the request or supporting documents are complete and/or complete and/or the information in the business description letter applying for the license must be completed and, therefore, cannot be considered.
The officer will prepare a memo of the deficiency of the list of documents or documentary evidence and a letter informing business details that apply for a license that must be submitted additionally. The applicant must make corrections and/or submit additional documents within the period specified in the memorandum. Otherwise, it will be considered that the applicant has abandoned the application. The officer and the applicant or authorized person will sign the said memorandum and provide a copy of the deficit memorandum to the applicant or authorized person.
If you want to set up a export company in Thailand with 100% foreign control, please contact our law firm in Thailand at [email protected]
