Setting Up a Thai Company the Legal and Safe Way for Foreigners

By Kanokpich Ukritdutsadee, Lawyer, Barrister, and Head of Lawyers for Expats Thailand – Thailand's dedicated law firm for foreigners. With extensive experience helping expats establish compliant businesses, I outline the legal steps, common pitfalls like illegal nominees, consequences, and key changes from January 1, 2026.

What is the Legal Way to Set Up a Thai Company as a Foreigner?

Under Thailand's Foreign Business Act (FBA), foreigners cannot own 100% of most businesses. Legal options include:

• Thai Limited Company: 51%+ Thai shareholders; foreigners up to 49%. Minimum capital: ฿2 million for restricted activities.

• BOI Promotion: 100% foreign ownership in approved sectors like tech, manufacturing, or tourism.

These structures ensure compliance, avoiding FBA violations that carry fines up to ฿1 million or jail time.

What is Illegal When Setting Up a Thai Company?

Using nominee shareholders is illegal. This involves paying Thais to hold shares on paper while foreigners control operations—a direct FBA violation.

Consequences of using nominees:

• Criminal penalties: Up to 3 years imprisonment and ฿1 million fines.

• Company dissolution and asset forfeiture.

• Forced share transfers at nominal value.

• Deportation and business blacklisting.

Courts use forensic audits to detect nominees; many expats lose everything when nominees claim real ownership.

Common Mistakes Foreigners Make in Thai Company Setup

• Undercapitalization: Depositing less than required capital.

• Unvetted Thai partners: Friends or paid nominees seize control.

• No work permits: Operating without visas leads to raids.

• Poor bookkeeping: Fails annual audits, triggers DBD investigations.

• Ignoring sector rules: Entering FBA-restricted activities like retail without approval.

Step-by-Step Process to Set Up a Thai Limited Company Legally

1. Reserve company name at Department of Business Development (DBD).

2. Prepare Memorandum of Association (MOA) with 3+ promoters (51% Thai shares).

3. Deposit capital in a Thai bank (฿2M minimum for some).

4. Register company (2-4 weeks); obtain tax ID.

5. Apply for work permits/VAT if revenue exceeds ฿1.8M/year.

6. File annual reports and audits.

Total timeline: 4-6 weeks with professional help.

What is BOI Promotion and Who Needs It?

Board of Investment (BOI) approval grants:

• 100% foreign ownership.

• 8-year corporate tax exemption.

• Land ownership rights.

• 100% profit repatriation.

Eligibility: Investments in promoted sectors (e.g., software, biotech). Apply with business plan; approval in 1-3 months. Ideal for serious investors over simple trading setups.

Latest Changes to Thai Company Laws from January 1, 2026

The 2026 FBA Amendments (effective Jan 1, 2026) include:

• Digital shareholder tracking via DBD e-Registry for real-time nominee detection.

• Mandatory beneficial owner declarations annually (฿500K fines for non-compliance).

• Doubled nominee penalties: Director bans added.

• Eased caps for green tech (70% foreign ownership without BOI).

These align with global AML rules, making transparency essential.

How Lawyers for Expats Thailand Helps Foreigners Stay Compliant

We provide end-to-end assistance for company formation, BOI applications, partner vetting, audits, visas, and property compliance—ensuring legal business and living in Thailand.

Introducing Brian Ramsden, General Manager of Foreign Affairs. Brian, with his expat expertise, ensures clear communication between foreign clients and our all-Thai legal team. He translates complex Thai laws into plain English, coordinates filings, and prevents misunderstandings.

Contact us for compliant setups: Call +66956583038 Facebook | Line | Website. Consultations available.

This is general information, not legal advice. Consult a qualified lawyer for your situation.

Kanokpich UkritdutsadeeLawyer, Barrister & Head of Lawyers for Expats Thailand