Foreign businesses in Thailand must comply with specific minimum capital requirements. These amounts differ depending on a multitude of variables, including the type of entity, the type of activity, the number of foreign employees, and whether the entity requires a Foreign Business License (“FBL”), a Foreign Business Certificate, or received promotion from Thailand’s Board of Investment (“BOI”).
Minimum capital can be as low as THB 2 million
Generally, where an FBL is required, the minimum capitalization is the greater of a) three million baht or b) 25% of the estimated average annual expenditures over three years. However, where a foreign business does not need an FBL to operate in Thailand, the minimum capital may drop to as little as two million baht.
Where the foreign business is a limited company that does not require an FBL, it must fully pay up its minimum capital before commencing business operations. If it does need one, then it must be fully paid up as a criterion prior to receiving the FBL.
Branch and representative offices, as well as BOI companies, do not have to be fully paid up to commence operations in Thailand. The maximum timeline for meeting capital requirements is 25% within the first three months of registration, a second 25% within the first year, the third 25% within the second year, and the final 25% within the third year.
Exceptions for work permits, treaties, business activities, and the BOI
Additional capitalization minimums may be imposed according to the business activity the company is engaged in, and in some circumstances, you must also consider your work permit requirements. While two million baht in registered capital is typically required for each work permit application, there are exceptions for certain BOI promoted companies where capitalization requirements may be as little as THB 1M.
Another consideration is whether your business can benefit from a trade treaty or agreement, such as the Thai-US Treaty of Amity or the Australia-Thai Free Trade Agreement. Under these types of arrangements, foreign businesses formed under these treaties may be exempt from remitting the required minimum capital until 29 August 2029.
If you want to find out if your foreign business qualifies under a trade agreement or what are your minimum capital requirements are, contact GPS Legal. Our expert team has successfully assisted many foreign businesses in establishing and operating in Thailand.