The Kingdom of Thailand has been attracting foreign investors for many years and its economy is largely dependent on the FDI. Meanwhile, the acute situation with the pandemic shock hit Thailand in early 2020 forcing the government to implement stricter measures. Crucially, the country’s biggest foreign investors, China and Japan, are set to see much slower growth than previously expected. Local authorities are developing plans for providing fiscal support to mitigate the economic effects of the pandemic.
If you are interested in registering a company in Thailand in the near future, this article will help you understand the peculiarities of the legislation of the jurisdiction in relation to doing business in the current difficult conditions.
First, let's look at the types of businesses that can be opened in Thailand:
- Partnerships - regular and limited. In the case of a normal partnership, all partners are jointly and severally liable for the obligations. When registering an LLP in Thailand, it should be borne in mind that such enterprises have partners who bear indirect limited liability. Also note that the registration of a Thai limited partnership is mandatory. Partnerships are not common in the jurisdiction;
- Thai LLCs are composed only of shareholders who have indirect and limited liability. It should be noted that it is the LLC that is the most common business entity in this jurisdiction.
Branches or rep offices of a foreign legal entity
The following are alternative forms of legal entities in Thailand in which foreign companies may participate:
- Foreign businessmen are often interested in opening a branch in Thailand. This is because the branch has the same legal status as the foreign company. They can also carry out business activities in Thailand in the amount set by a foreign company.
- You can also open a representative office of a foreign company in Thailand. However, it should be borne in mind that the activities permitted for the representation are extremely limited.
NOTE: Foreigners must obtain a foreign business license in Thailand. In order to start a business in Thailand, non-residents will also need a foreigner license for certain limited activities.
FDI in Thailand
FDI has softened considerably since 2019, turning to net outflows in 2020. Companies may have committed expenditure to the outbreak in the expectation of FDI inflows later this year. It is expected that the government recovery package will help offset some of this damage, but the full impact, again, remains to be seen.
Legal advice on foreign investment regulation in Thailand
Today, many investment decisions and project executions in Thailand are delayed. However, if you do intend to register a company in Asia, it is crucial to enlist the assistance of professional specialists. Experts from IQ Decision UK will help you understand the intricacies of Thai law, quickly and cost-effectively establish a company in Thailand.