Key Takeaways
- A Thai Limited Company needs two shareholders now, not three. The rule changed on 7 February 2023, and at least one widely used Singapore government resource has not caught up.
- A representative office cannot earn a single baht in Thailand. It exists to watch the market and report home, funded entirely from abroad.
- A branch office is 100 percent foreign by definition, which is exactly why it triggers full Foreign Business Act treatment and leaves the parent fully liable.
- A BOI-promoted company is not a sixth structure. It is a Thai Limited Company (or branch) that has been granted privileges, covered properly in the next chapter.
In Detail
The Thai Limited Company, the default choice
Almost every Singapore SME that ends up trading in Thailand ends up here. A Thai Limited Company is incorporated with the Department of Business Development and gives you the thing a representative office and a branch both lack: a separate legal person that can earn revenue, hold contracts in its own name, and cap your liability at what you put into it.
The shareholder minimum dropped from three to two on 7 February 2023, when an amendment to the Civil and Commercial Code took effect. This is worth stating plainly because it is one of the most commonly wrong facts in circulation: a still-current Singapore government guide to doing business in Thailand states three shareholders are required, and several incorporation agents quote it the same way.1
At least 25 percent of the par value of every subscribed share must be paid up at incorporation; the remaining 75 percent is callable by the board later, on the company’s own terms.2 There is no separate minimum registered capital under the Civil and Commercial Code itself. Capital floors only appear once the Foreign Business Act is in play, which is the subject of the previous chapter.
Foreign ownership has no ceiling under company law itself. A Singapore entity, or a Singapore individual, can hold shares directly.3 The ceiling that matters comes from the Foreign Business Act, not the Civil and Commercial Code: once foreign shareholding reaches 50 percent, the company is treated as foreign and the restricted-business lists start to apply.3
A Thai Limited Company can sponsor its own work permits and is taxed at the standard 20 percent corporate income tax rate on net profit.4 A smaller company may qualify for reduced SME brackets under Royal Decree 583/2558 amending 530/2554; the mechanics belong in this guide’s tax chapter rather than repeated here.
The main disadvantage is not really a disadvantage: it is that incorporating properly, with a genuine Thai shareholder or partner if you need one for a restricted activity, takes more paperwork than a representative office and more commitment than a branch. That paperwork is covered in the next chapter of this part.
Representative office: presence without revenue
A representative office cannot generate income in Thailand under any circumstances. It exists to do a narrow list of things on behalf of a foreign head office: source goods or services, check the quality and quantity of what the head office is buying or having made in Thailand, advise the head office’s local customers, act as a technical liaison, and report on Thai market conditions. Practitioner summaries put the permitted list at exactly these five activities, though we could not independently pull the underlying Ministerial Notification text that defines them.
Because it cannot earn revenue, a representative office is funded entirely by remittances from the head office and has no corporate income tax exposure of its own. It still has to register for tax and handle payroll withholding for whatever staff it employs.
Minimum capital is THB 3 million, according to the Board of Investment’s own One Start One Stop Investment Center portal.5 Since 9 June 2017, a representative office is exempt from needing a Foreign Business Licence for these liaison activities; it only has to notify the Ministry of Commerce through the Department of Business Development.6
It is not a separate juristic person with shares, so ownership in the usual sense does not apply: there is nothing to hold except the head office’s own operation running under Thai registration. It can typically sponsor a small number of work permits, commonly the office head and a handful of specialists, though we found no primary source for a specific quota different from an ordinary company’s.
Branch office: the parent shows up directly
A branch office is not a separate legal entity from its foreign parent. It is the same company, operating in Thailand under its own name, with the head office fully liable for whatever the branch does or owes here. This is standard branch-office doctrine, though we could not pin it to a specific statutory provision beyond the general Foreign Business Act framework.78
A branch is automatically classified as foreign under Foreign Business Act Section 4, which defines a foreigner as including any juristic person not registered in Thailand. There is no percentage test to fail because there is no local shareholding to test: the branch is, structurally, 100 percent the foreign parent, and that is exactly why it lands in Foreign Business Act territory regardless of how the parent’s own ownership is split.3
Minimum capital is THB 2 million for ordinary branch activity, rising to THB 3 million where the specific business requires a Foreign Business Licence.3 Under a 2019 Ministerial Regulation, that capital does not have to arrive all at once: at least 25 percent within three months of starting business, at least 50 percent cumulatively within a year, and the remainder in further annual instalments of at least 25 percent, with evidence of each remittance filed with the Department of Business Development within 15 days.9
A branch can sponsor work permits and must appoint a Thailand-resident branch manager to sign its registration documents.7 It is taxed the same way as any other business on its Thailand-sourced profits, at the standard 20 percent corporate income tax rate.4
A branch suits a single project, a fixed-term contract, or a foreign company that wants direct presence without building a locally structured subsidiary. The disadvantage is the one that matters most to a Singapore owner weighing this against a Thai Limited Company: there is no way to structure around the Foreign Business Act exposure, and every liability the branch takes on in Thailand is a liability against the parent company back home.
Public Limited Company: not built for you
A PLC exists to raise capital from the public and list on the Stock Exchange of Thailand. It needs at least 15 promoters to register, against a Thai Limited Company’s two.10 Nothing about it is aimed at a five-to-fifty-staff operating business, and it carries the same Foreign Business Act ownership test as a private limited company without offering anything a private company does not already give you. Unless a public listing is genuinely on your five-year plan, this structure is not a live option.
Partnerships: liability without the upside
Thai law offers an ordinary partnership and a registered limited partnership. An ordinary partnership leaves every partner jointly and unlimitedly liable for the partnership’s debts, registered or not. A registered limited partnership needs at least one partner with liability capped at their contribution, and at least one with unlimited liability, and only the unlimited-liability partner may manage it.11
The Foreign Business Act treats a partnership as foreign on broadly the same test as a company: a foreign managing partner, or foreign holders of half or more of its capital. In practice, where foreigners use this form at all, they cap their own participation near 49 percent and keep the managing, unlimited-liability role in Thai hands specifically to stay under that line, though this is reported as market convention rather than a codified rule.11 No statutory minimum capital applies to either form; capital is whatever the partners contribute.
Almost no Singapore SME chooses a partnership on purpose. It offers no liability protection worth having and no tax advantage over a limited company, while still carrying the same foreign-ownership analysis. It shows up in this guide mainly so you can recognise it and move past it.
Joint venture: a contract, or a company
A joint venture in Thailand is not one thing. An unregistered, purely contractual joint venture between your Singapore company and a Thai partner is still treated by the Revenue Department as its own taxable juristic person under Section 39 of the Revenue Code, even though it has no separate legal personality for company-law purposes. It files and pays corporate income tax at the standard 20 percent rate on its own profits, separately from each partner’s own tax position.12
An incorporated joint venture is a different animal in name only: it is simply a Thai limited company owned by the venture partners, and everything covered above about foreign ownership, capital, and work permits for a Thai Limited Company applies to it directly. There is no separate minimum capital rule for a “joint venture” as such; capital follows whichever vehicle, contract or company, the partners actually use. Most Singapore owners who hear “joint venture” and picture a permanent structure are better served asking whether they mean the contractual version or simply mean a Thai Limited Company with a named partner.
BOI-promoted company, at a glance
A BOI-promoted company is not a separate legal form. It is an ordinary Thai Limited Company, or in some cases a branch, that has received a promotion certificate from the Board of Investment. Section 12 of the Foreign Business Act exempts a BOI-promoted company from most of the Act, which is how a foreign investor ends up owning 100 percent of a business that would otherwise sit on a restricted list.3 General minimum investment is THB 1 million per promoted project, excluding land and working capital, unless the specific promoted activity’s own conditions say otherwise.13 What activities qualify, how long approval realistically takes, and what compliance it demands afterward is the whole subject of the next chapter.
International Business Centre: built for a regional hub, not an SME
The International Business Centre, or IBC, replaced the old Regional Operating Headquarters, International Headquarters, and International Trading Centre regimes when they were abolished in 2019. It is a Thai-incorporated company providing management, technical, support, or treasury services to affiliated companies, in Thailand or abroad. To qualify it needs at least THB 10 million in paid-up capital, maintained at the close of every accounting period, and at least 10 qualified employees, reduced to 5 for a treasury-only centre. The tax incentive is tiered to Thailand expenditure: 8 percent corporate income tax once annual Thailand spend reaches THB 60 million, 5 percent at THB 300 million, and 3 percent at THB 600 million.14
Nothing about those numbers describes a five-to-fifty-staff operating business. IBC exists for a regional treasury or shared-services function sitting on top of a group that already spends tens of millions of baht a year in Thailand. For almost every reader of this guide, it is worth knowing the name exists and nothing more.
**Director count and nationality.** Commentary consistently states a Thai Limited Company needs only one director, of any nationality, with no residency requirement. We could not trace this to a specific Civil and Commercial Code section, so treat it as standard practice rather than a confirmed rule number before you rely on it for a specific filing.
**The "183 days a year" director residency claim, which circulates in some commentary, should not be used.** It appears to conflate the individual 183-day tax residency test under the Revenue Code with a company-law director qualification. No company-law source supports a residency requirement for directors.
**Representative office capital: THB 3 million or 5 million.** BOI's own OSOS portal states THB 3 million, which is the primary government source and the figure we used above. Some commentary states THB 5 million with a different multi-year remittance schedule. The two were not reconciled with a further primary source, and we have not silently picked between them: treat 3 million as the better-sourced figure and confirm current capital requirements with a Thailand-side adviser before committing to a number.
**Branch profit remittance tax.** Some commentary adds a further 10 percent remittance tax when a branch sends profits back to its head office, on top of the 20 percent corporate income tax, producing a combined effective rate commentators put at roughly 28 to 37 percent. We could not verify the remittance tax rate against a primary Revenue Code provision, so treat it as indicative only until confirmed.
The comparison, side by side
Before you pick a structure
- Has anyone quoted you a three-shareholder requirement? If so, ask where that came from. It has been two since February 2023.
- Do you actually need to earn revenue in Thailand, or would a representative office genuinely cover what you need for now?
- If a branch looks simpler than incorporating, have you priced in that every liability it takes on lands on your Singapore company directly?
- Is anyone proposing a partnership instead of a limited company? Ask them what it gets you that a company does not.
- When someone says “joint venture,” have you confirmed whether they mean a contract or a company? The tax and liability answers are different.
- Does your business realistically clear BOI’s or IBC’s activity and spending bars, or is a plain Thai Limited Company simply the faster route?
This article is one of twenty-four chapters. The complete guide adds six working tools: a registered-capital worksheet, an annual compliance calendar, an incorporation document checklist, a partner due-diligence checklist, a setup cost and timeline comparison, and a decision tree for choosing your structure.
Sources
14 sources for this article, 5 of them primary. Where we could not verify something, the article says so rather than estimating.
- Mondaq, www.mondaq.com
- Tilleke & Gibbins, www.tilleke.com
- Thailand Board of Investment (primary), www.boi.go.th
- PwC Worldwide Tax Summaries, taxsummaries.pwc.com
- BOI One Start One Stop (primary), osos.boi.go.th
- ASEAN Briefing, www.aseanbriefing.com
- PS Law Business, www.pslawbusiness.com
- UnionSpace, unionspace.co.th
- Tilleke & Gibbins, www.tilleke.com
- AustLII, www2.austlii.edu.au
- Umpire Legal, www.umpirelegal.com
- Thai Revenue Department (primary), www.rd.go.th
- BOI One Start One Stop (primary), osos.boi.go.th
- Thailand Board of Investment (primary), www.boi.go.th
This article is general information about doing business in Thailand and is not legal, tax, or financial advice. Every figure is cited with its source and its date. Thai regulation is changing quickly and rules current at publication may change without notice. Confirm anything you intend to act on with qualified Thai counsel.