Guide to 100% Foreign-Owned SME Business Structures in Bangkok, Thailand

Starting a small or medium enterprise (SME) in Bangkok as a foreigner involves navigating Thailand’s strict foreign ownership laws. Under the Foreign Business Act (FBA), foreign ownership of a Thai company is generally capped at 49%, unless you qualify for special approvals or treaties. This guide breaks down the realistic and fully compliant structures that allow 100% foreign ownership or effective foreign control for SMEs – focusing on practical options rather than large-scale or high-investment schemes. We’ll explain each structure’s allowed business activities, pros and cons, setup costs, timelines, visa/work permit implications, and critical requirements. We’ll also give real-world advice on which option suits different business types and founder profiles, so you can choose the best path for your venture in Bangkok. (Note: Thai-Co, the service provider behind this guide, is not a law firm; we partner with vetted Thai legal and BOI experts to deliver turnkey company setups.)

Thai Majority Company (with Foreign Control)

What It Is: This is a standard Thai private limited company in which Thai nationals own at least 51% of the shares, making it a “Thai” company in the eyes of the law. The foreign entrepreneur holds up to 49%. Despite the minority shareholding, the foreigner can often retain de facto control through legal arrangements (e.g. preference shares or weighted voting rights), as long as these arrangements do not violate Thai law. The key is that Thai shareholders must be genuine investors, not mere nominees – using Thai “figurehead” shareholders to circumvent the FBA is illegal and carries severe penalties.

Allowed Activities: A Thai-majority company is essentially treated as a Thai entity and is not restricted by the Foreign Business Act. This means it can engage in almost any business open to Thai citizens, including local service businesses (consulting, marketing, etc.), trading and retail, import/export, restaurants, small manufacturing, and so on. In practice, if a particular activity requires a special license for any Thai company (for example, a factory license, food business license, etc.), it would still need to obtain that. But unlike a foreign company, a Thai-majority company can freely operate in sectors reserved for Thais under the FBA, without needing a Foreign Business License. Example: If you want to run a local consulting or IT services firm, a Thai-majority company can legally offer those services to Thai clients (something a 100% foreign company could not do without special permission).

Pros:

• Broad Eligibility: Since it’s legally a Thai entity, it can conduct a wide range of business activities (including most services and trading) without special government approval. You avoid the bureaucracy of applying for foreign business licenses.

• Quick Setup: Incorporation is straightforward and fast (typically 1–2 weeks for registration). No need to wait months for licensing.

• Lower Formal Capital Requirements: There is no fixed minimum capital mandated by the FBA for Thai companies (aside from industry-specific requirements). In practice, a modest registered capital (e.g. THB 1–2 million) is common and generally sufficient to register and obtain tax/VAT registrations. This can be lower than what a fully foreign company might be required to inject.

• Local Incentives: As a Thai company, it may qualify for certain government SME programs or easier access to some business licenses reserved for Thai entities.

Cons:

• Foreign Ownership Limit: The foreign owner is legally capped at 49% shareholding, meaning you do not have majority ownership on paper. Profit shares are proportional to ownership, so at least 51% of profits must go to Thai shareholders (unless you set up different share classes with dividend preferences, which adds complexity).

• Trust and Control Issues: You must have Thai partner(s) owning 51%. If these partners are truly invested in the business, they will have ultimate voting power unless you’ve structured non-voting preference shares or other mechanisms. There’s an inherent risk if relationships sour – the Thai majority could outvote or even remove the foreign minority in a worst case scenario. Strong shareholder agreements (while not fully enforceable if they contravene Thai law) and carefully designed share structures are needed to protect the foreign investor’s interests.

• Nominee Shareholder Risks: If the Thai shareholders are not genuine (i.e. they are **“nominees” fronting for the foreigner’s benefit), this is illegal. Thai authorities have been cracking down on such arrangements – offenders can face heavy fines, business dissolution, and even imprisonment. In short, don’t use fake Thai shareholders as a workaround; it’s a serious legal risk and a deal-breaker for compliance.

• Limited Foreign Investor Protections: Unlike some countries, Thailand doesn’t have an “LLC operating agreement” concept that easily overrides share ownership. The legal default is that the majority rules. So your control mechanisms must fit within Thai corporate law (which does allow some flexibility in share classes and directorship structure, but must be set up very carefully).

Key Requirements: A Thai limited company requires at least 3 shareholders at all times (Thai or foreign). In a Thai-majority setup, typically at least one or two Thai shareholders (holding 51%+ combined) and one foreign shareholder (up to 49%). Often, foreigners might use a Thai friend, spouse, or business partner to hold the 51%. Registered capital can be low (even THB 1 million or less), but if you plan to sponsor work permits for foreign staff (including yourself), you’ll need at least THB 2 million capital per work permit for the company and to hire Thai employees (more on that below). A local registered office address in Thailand is required for incorporation – this can be a small office or even a virtual office address in some cases (but ensure the lease/permission allows company registration). Standard corporate compliance like tax ID registration, VAT registration (if applicable), and monthly accounting filings will apply.

Setup Costs: Government fees for company registration are relatively low (on the order of a few thousand baht). Professional service fees for setting up a basic Thai company range from THB 20,000–50,000 (approximately USD $600–$1,500), depending on the provider’s package (this often includes preparing articles of association, registration, VAT setup, etc.). Thai-Co’s service would include coordinating the whole registration process with our legal partners. If you need nominee director services or a registered address service, those may add to the fee. (Note: Thai-Co does not provide fake nominee shareholders – any Thai partners would need to be legitimate participants.)

Timeline: 1–2 weeks is typical to fully register a Thai limited company, assuming all shareholder documents are ready and the name is approved quickly. This includes a few days to get a company name approved by the Department of Business Development (DBD), drafting and signing the Memorandum of Association and Articles of Association, and registration with the DBD. Obtaining a corporate tax ID and VAT certificate (if needed) takes an additional week or two. Opening a corporate bank account (once you have the company documents) can take another 1–2 weeks (Thai banks usually require the director(s) to visit in person to sign documents). Overall, you can be operational in a few weeks, much faster than structures that require special licenses.

Work Permit & Visa Implications: If the foreign owner or other expats will work in the company in Thailand, the company must sponsor their work permits and visas. A standard Thai company (non-BOI) must follow the general rule: for each foreign work permit, the company needs at least 4 Thai employees (Thai nationals) on payroll and social security, and THB 2 million paid-in capital. This is a significant burden for a small firm – e.g. to get one work permit for the foreign owner, you’ll need 4 Thai staff (they can be admin, sales, etc., but they must be legitimate employees with monthly salary and social security contributions) and at least THB 2M in registered capital. Pros: The Thai-majority company qualifies for the usual business visa and work permit sponsorship, so you can get a one-year renewable visa for the foreign director once these conditions are met. Cons: Hiring 4 Thai employees just to satisfy regulations can be costly if they aren’t truly needed in the business. Many single-person consulting businesses struggle with this. (One partial workaround: if the foreigner is married to a Thai, the work permit rules are relaxed to 1 Thai employee and THB 1M capital for that foreign spouse – but that’s a specific case.) In short, visa/work permit is possible but comes with the 4:1 Thai-to-foreigner hiring ratio requirement in this structure. There are no special exemptions on that ratio just because the company is Thai-majority, unless you utilize other schemes like BOI or “Smart Visa” (discussed later).

Deal Breakers / Red Flags: If you cannot find a trustworthy Thai partner or are uncomfortable not owning 100% of your business, this structure may not be for you. Additionally, do not attempt to use straw men or nominal Thai shareholders – as mentioned, Thai authorities treat that as a serious violation. Recent crackdowns have seen companies using illegal nominees get dissolved and people involved handed suspended jail sentences. So this option only works if you have real Thai stakeholder(s) on board. Also, consider the relationship: the Thai majority shareholder should ideally be someone who will respect pre-agreed roles (e.g. letting the foreign minority run day-to-day operations as the managing director). You might put in place shareholder agreements or preference shares to solidify that control legally. Thai law does allow issuing different classes of shares with varied voting rights, which can legally give a 49% foreign shareholder more voting power than a 51% Thai shareholder, for example. If structured correctly (and again, with genuine Thai investors), the foreign partner can retain control over decisions while the Thai partners hold majority of shares in name. This is a nuanced legal setup – you’d want a capable lawyer to draft such arrangements.

Who is it Suitable For: This option is common for small service providers, restaurants, retail businesses, and consultancies where the foreign entrepreneur doesn’t qualify for a special scheme or doesn’t want to invest large capital. It’s often used by people who have a trusted Thai spouse or friend to partner with. For example, a foreigner opening a small café or trading company might do it under their Thai spouse’s majority ownership. Or an expat consultant might partner with a Thai colleague. It can also suit those who just want to get started quickly and keep costs low, acknowledging the trade-off in ownership. However, if you’re uncomfortable with not being the 100% owner, you should consider the other structures below.

100% Foreign-Owned Thai Limited Company (Foreign Business License)

What It Is: This refers to a Thai limited company where foreign entities/individuals own more than 49% (up to 100%). Normally, such a company would fall foul of the Foreign Business Act – unless it obtains a Foreign Business License (FBL) or falls under an exempt category. Essentially, this structure means forming a company in Thailand that is legally “foreign” (by shareholding) and then securing government permission for it to operate in restricted sectors. It’s a path to owning your company outright, but it comes with stricter requirements and bureaucracy.

Allowed Activities: By default, a foreign-owned company cannot engage in most service, trading, or other activities on the FBA’s restricted lists (List 1, 2, 3) without a Foreign Business License. List 1 activities (like media, farming, land trading, etc.) are completely off-limits to foreigners (an FBL is generally not granted for those). List 2 and 3 activities (which cover most services, local trading, and other sectors) require special permission. To legally do business in those areas with 100% foreign ownership, you must apply for and obtain an FBL from the Department of Business Development. The FBL application is a formal process where you must show why your foreign-owned business will not negatively affect Thai companies and often how it will benefit Thailand (e.g. through know-how transfer or unique services).

However, not all businesses need an FBL. Some activities are exempt from the FBA restrictions or not listed at all. Notably, export-oriented businesses and many manufacturing activities are not restricted by the FBA, meaning a foreigner can own 100% of a company engaged purely in those lines. For example, if you set up a company to manufacture products in Thailand primarily for export, or a company to provide services only to affiliated companies abroad, you might not need an FBL at all. Similarly, wholesale trading with very high minimum capital (e.g. THB 100 million) or certain specific activities can be exempt by law – though these exceptions typically apply to big investors, not SMEs. In summary:

• If your planned business falls outside the FBA’s restricted lists, you can run a 100% foreign-owned company without special licenses (just register the company and meet the minimum capital rule, usually THB 2M). Example: manufacturing furniture in Thailand for export abroad is not restricted – you can incorporate a fully foreign-owned factory.

• If your business is on a restricted list (most likely List 3 for services/trading), then to be 100% foreign-owned you need to secure an FBL (unless you qualify for a treaty or BOI promotion discussed later). With an FBL, your company will be authorized to engage in the specific business activities listed in the license. Example: a foreign-owned consulting firm needs an FBL to legally provide consulting services to Thai clients.

Pros:

• 100% Ownership and Control: You (and your foreign co-founders, if any) own the company outright. There are no Thai partners required. This is a huge peace-of-mind factor – no need to split profits 51/49 or worry about nominee arrangements. You have full legal control of the business.

• Legally Work in Restricted Sectors: With the FBL in hand (or by operating in an unrestricted sector), your company is fully legal to operate even in areas normally closed to foreigners. It essentially puts you on similar footing to Thai-owned companies for those specific business activities.

• Credibility and Investment Security: Some foreign investors feel more secure injecting capital into a company they fully own. Also, dealing with foreign clients or partners can be smoother when you can say the company is 100% foreign-owned and properly licensed – it avoids the sometimes negative perception of using nominee structures.

• No Need for Thai Shareholders/Directors: You don’t have to find or manage local shareholders. The board and shareholders can be entirely foreign (except where other laws require a Thai – e.g. certain regulated professions). This simplifies corporate decision-making since you answer only to yourselves or your overseas HQ if it’s a subsidiary.

Cons:

• Lengthy and Uncertain Licensing Process: Obtaining a Foreign Business License is bureaucratic and time-consuming. On average, expect 3–6 months to prepare the application, submit to the Ministry of Commerce, and await approval (sometimes longer, occasionally faster if straightforward). Approval is not guaranteed – in fact, roughly only 50% of applications succeed. Your application needs to convince a committee that your business offers something beneficial (e.g. it introduces new technology, doesn’t compete directly with local SMEs, or fills a market gap). For small consulting or service firms, this can be a high bar. Rejections do happen, leaving applicants back at square one after months of waiting.

• Minimum Capital Requirement: By law, any foreign-owned company must meet a minimum capitalization. Generally, the rule is THB 2 million minimum registered capital for a service business (higher for some List 2 businesses or if you seek multiple activities). If you apply for an FBL, you’ll typically state this capital and eventually need to show it’s paid in. THB 2M (~USD $60k) must be invested into the company (it can be used for expenses, but you need to bring it in). In some cases, the authorities might ask for more capital if they feel the business needs it (for example, a foreign retail business may be asked for THB 100M if it falls under certain criteria). For many SMEs, THB 2M is manageable, but it’s still a chunk of money to lock into the business initially.

• Restricted Scope: An FBL will specify exactly what business activities you are allowed to engage in. You must stick to that scope. For example, if your FBL is for “marketing consulting services,” you can’t suddenly start a side business trading goods or add a new consulting category without amending the license or getting a new one. The company’s objectives are essentially limited to what’s approved. If you want to expand into new areas later, you may need further permissions.

• Regulatory Oversight: With an FBL, your company comes under more scrutiny. You may have reporting obligations to show you’re complying with any conditions of the license. Sometimes, licenses are granted with conditions like “must have x% Thai employees in 2 years” or “transfer technology by doing XYZ.” Failure to meet conditions could jeopardize the license. You also must renew certain licenses (though the FBL itself doesn’t usually expire, unless tied to something that does – but regulatory conditions could be monitored).

• Upfront Cost and Effort: The application for FBL often requires a Thai legal consultant or law firm to prepare a detailed business plan in Thai, including financial projections, market studies, and explanations of how your business benefits Thailand. Professional fees for an FBL application can range from THB 100k to 200k+ (USD $3k–$6k) depending on complexity. Government fees for issuing the license are typically around THB 20,000–40,000 for List 3 businesses (varies by type and capital). So it’s both an investment of time and money.

• No Tax or Incentive Benefits: Unlike BOI companies (next section), an FBL by itself grants no special tax breaks or incentives. Your company will pay normal Thai corporate income tax (20%) and VAT, etc. It’s purely a permission to operate, not a financial incentive.

Key Requirements: Aside from the minimum capital (THB 2 million for most, which must be paid in within, say, the first year of operation), you’ll need at least 3 shareholders (like any Thai company). These can all be foreign individuals or corporations. If it’s a wholly-owned subsidiary of a foreign parent company, that parent can hold 99% and perhaps an associated company or individual hold 1% to meet the shareholder count (there are structuring tricks to meet the Thai requirement of 3 shareholders while effectively one entity controls it). Directors: you’ll need at least one director (can be foreign). Notably, when applying for the FBL, you should not start the restricted business until approval. You can register the company first (with the foreign ownership) and state that it will apply for an FBL before operating. The company registration itself, even if foreign-owned, is straightforward as long as you declare you will comply with FBA by either not doing restricted business until you get a license. Often, lawyers will register the company with broad objectives, then immediately file the FBL application for the activities that need permission. The company must also have a Thai office address and all the usual setup steps (tax ID, etc.). If the foreign shareholders are corporate entities, their corporate documents must be notarized and translated for the registration and license application.

Timeline: Setting up the company (incorporation) can be done in under 2 weeks. However, obtaining the Foreign Business License is the long pole – typically 2 to 4 months for approval, sometimes more. By law, the authorities should decide within 60 days after receiving a complete application (with one possible 60-day extension), but in practice there can be back-and-forth queries that prolong it. During this time, you might receive a temporary receipt allowing you to open a bank account and start some preparations, but you are not supposed to actively engage in the restricted business until the license is granted. In some cases, entrepreneurs take a risk and start operations quietly while waiting, but that carries legal risk. It’s safer to wait or operate in a limited capacity (e.g. only do offshore contracts) until fully licensed. Bottom line: expect a few months of lead time before you can fully operate in Thailand’s local market as a 100% foreign-owned service/trading company.

Visa & Work Permit Implications: A fully foreign-owned company with an FBL can sponsor visas and work permits for foreigners just like a Thai company. The same rule of 4 Thai employees per foreign work permit and THB 2M capital per work permit applies in general (the law doesn’t exempt FBL companies from labor regulations). So, you don’t avoid the hiring requirement by virtue of having an FBL (only BOI companies get a quota waiver, discussed later). This means if you’re a one-person consultancy wanting 100% ownership, you’d still face the need to hire 4 Thai staff to get yourself a work permit under this company – a tough requirement for a very small operation. Many people in that situation explore the “Smart Visa” program as an alternative – for instance, Thailand’s SMART Visa (for certain sectors like tech or as a startup entrepreneur) allows working in Thailand without the 4 Thai employee rule, but it requires meeting high criteria (e.g. salary thresholds, technology business field) and is outside the scope of this guide. Assuming you go the normal route, your foreign-owned company will need to budget for Thai hires. On the positive side, Thai labor authorities will expect your company to have at least the minimum capital (THB 2M) anyway, which aligns with the FBL requirements. Ensure that you plan for the added salary overhead of Thai staff when doing an FBL as part of the cost of doing business. In short, visa/work permit is possible – your company is a legal sponsor – but it doesn’t ease the standard requirements and you must factor in the need for Thai employees or look at BOI promotion or other visas to relax this.

Deal Breakers / Considerations: Getting an FBL is often not practical for very small businesses or generic services. If your business doesn’t have a unique angle or sufficient capital, the application may be denied, leaving you having spent time and money for nothing. Small trading businesses (importing products to sell in Thailand) seldom get an FBL unless they invest very large capital, because the Thai government generally expects you to partner with Thais in such ventures or invest under conditions (for example, wholesale/retail FBA exemption if each shop is capitalized at 100 million baht – far beyond SME level). So if you’re a small importer/exporter, consider whether you can operate legally without an FBL (e.g. focus on export only, since exporting is unrestricted) or use a Thai majority structure for local sales. Another consideration: cost and complexity – if you are just testing the market, going through an FBL process may be overkill. Some entrepreneurs set up a Thai-majority company first as a stop-gap to start operating, then later convert to foreign majority if they grow (though that would require applying for an FBL at that stage). The FBL route is best suited for those who are committed to Thailand long-term, have a business plan that can convince authorities of its merits, and can afford the capitalization and compliance. It’s a fully legal route to 100% ownership, but it’s neither fast nor guaranteed. If you can qualify for the BOI promotion or Treaty options below, those are often preferable for SMEs because they streamline the permission aspect.

BOI-Promoted Company (Board of Investment Promotion)

What It Is: A BOI-promoted company is a Thai entity (usually a private limited company) that has been granted promotion by the Thailand Board of Investment (BOI). BOI promotion is essentially an incentive program for businesses in certain priority sectors. If your business activity qualifies, the BOI can approve it for special benefits – notably 100% foreign ownership permission, various tax breaks, easier work permits, and sometimes other perks. Importantly for foreign entrepreneurs, a BOI promotion comes with a Foreign Business Certificate (FBC) that acts as a blanket approval to operate in Thailand despite foreign ownership. This means you don’t need a separate Foreign Business License; BOI promotion is an alternative path to legally do what a license would otherwise allow, but it’s limited to specific industries and you must meet BOI conditions.

Allowed Activities: The BOI only promotes certain business categories that align with Thailand’s economic development goals. These tend to be in manufacturing, technology, innovation, and high-value services. Examples of SME-suitable sectors that BOI promotes include: software development, IT services, e-commerce platforms, fintech, digital services, biotech, R&D, design and engineering services, advanced agriculture tech, certain types of manufacturing or food processing, renewable energy, and some “service businesses supporting international trade” (like trade and investment support offices). The BOI periodically updates its list of promoted activities. As of now, some popular categories for foreign SMEs are:

• Software and IT services: e.g. software development, enterprise software, SaaS, data centers, cloud services – these often qualify and can get attractive incentives (sometimes an 8-year corporate tax holiday for pure software development).

• E-Commerce and Digital Platforms: If you’re building a tech platform or marketplace, BOI has categories for that, provided it’s innovative.

• Technological consulting or engineering design: For instance, an architecture or engineering firm doing advanced design work might qualify under “engineering services” especially if serving overseas clients.

• Import-Export Trading Centers: There was a category called “International Business Center (IBC)” and formerly “International Trading Center (ITC)” – these allow trading and service support for regional operations. However, IBC has high financial thresholds not suitable for small companies (minimum capital and expense requirements in tens of millions THB). Some smaller trading firms might use a “Trade and Investment Support Office (TISO)” category if they mainly facilitate exports and are part of a group, but that’s case-specific.

• Light Manufacturing and Crafts: Some small-scale manufacturing in targeted industries (e.g. innovation in textiles, handicrafts with technology, etc.) can be promoted, especially if you’re introducing new processes.

• Research and Development: If your business involves conducting R&D in Thailand (e.g. a development lab for a foreign parent company), BOI highly encourages that with full foreign ownership and tax breaks.

• Agricultural Tech and Food Innovation: For example, developing a new food processing technology, or a high-tech farm, might get promotion under agriculture and biotechnology categories.

The key is that your business must fit a promoted category and meet certain criteria. Each category has specific conditions – e.g. software development might require you spend at least 1.5 million THB on salaries of Thai IT staff per year, or hire a minimum number of Thai engineers. Some categories require a minimum investment (often at least THB 1 million in capital expenditure). The BOI also tends to favor businesses that will export or create jobs/skills in Thailand. Purely domestic-oriented services might not qualify unless they are innovative.

If you do qualify, the BOI will issue a promotion certificate that effectively exempts your company from foreign ownership limits for the promoted business activities. You then incorporate the company with 100% foreign shares (if you haven’t already) and register it under the BOI promotion. After that, the company must stick to the promoted business scope – like the FBL, you can’t stray outside the lines (at least not without also having a normal FBL or another structure for other activities). For example, if you have BOI for software development, you shouldn’t suddenly start a restaurant under the same company.

Pros:

• 100% Foreign Ownership with Less Hassle: The biggest advantage – you can own the company 100% and you don’t need a separate Foreign Business License. The BOI promotion comes with an official certificate allowing your foreign-owned firm to operate in the approved sector. This bypasses the uncertainty of the FBL process. BOI is generally more welcoming – if you meet the criteria, approval is quite likely since Thailand wants to attract investment in these sectors.

• Fast-Track Work Permits and Visas: BOI companies enjoy greatly relaxed work permit rules. Notably, the usual 4 Thai employees per foreigner rule does NOT apply. A BOI-promoted company can hire foreign staff freely (within the project’s needs) and obtain work permits without needing to pre-hire Thais in a 4:1 ratio. In fact, BOI has a “Single Window” system where you can get work permits and visas processed quickly (often within days) at the One Stop Service Center in Bangkok. This is a game-changer for small companies – you and your foreign co-founders or specialists can work legally without the burden of hiring unnecessary Thai employees.

• Tax Incentives: Many BOI promotions come with significant tax breaks. Depending on the activity, you might get corporate income tax holidays (e.g. 5 to 8 years of zero corporate tax on qualified income), import duty exemptions on machinery and raw materials, and other tax reductions. Not all projects get a full tax holiday (some service activities might get none or only reductions), but the potential savings are huge if you do. For example, a software development BOI project often gets a 5-year CIT exemption. This means more of your profits can be reinvested or repatriated.

• Land Ownership Rights: Uniquely, a BOI-promoted company (if needed for the business) can be allowed to own land in Thailand. Normally, foreign entities cannot own land, but BOI can grant this right for business use (e.g. you need to buy a plot for a factory or an office). For an SME, land ownership might not be critical, but if you plan to build a facility, this is a valuable perk.

• Other Perks: Enhanced immigration privileges (like longer visa lengths), permission to take or remit foreign currency more freely, and government support in navigating other permits. BOI officers can sometimes assist in things like getting utility connections expedited for your business. Being BOI-promoted also adds a bit of prestige and credibility – it signals your business is in a high-value sector and has the government’s endorsement.

Cons:

• Sector Restrictions: BOI is not available for every business. Traditional SME businesses like running a restaurant, opening a retail shop, a general import agency, a local consulting firm (unless it’s in a very technical field), etc., will not qualify for BOI. If your business doesn’t fit a promoted category, this path is a non-starter. We often have to tell clients, for example, that a marketing consulting firm for the Thai market won’t get BOI unless they package themselves as doing something tech-related or targeting overseas customers.

• Qualification Criteria: Even if you’re in a promoted sector, you must meet certain minimum requirements. BOI projects typically require a reasonable investment plan – usually at least THB 1M capital (sometimes more, depending on the project scale you propose), and often the project must incur that investment within a few years. Many promotions have job creation or expense requirements. For instance, for a software development promotion, you might need to hire (and maintain) at least, say, 3–5 skilled Thai software engineers and spend a certain amount on their salaries, within a couple years. Failing to meet the commitments can lead to your BOI benefits being revoked. So you need to be prepared to actually execute the project (this isn’t a paper exercise – BOI will monitor progress). For a one-person business, BOI may be tricky unless you scale up with a team.

• Application Process: While more predictable than an FBL, applying for BOI promotion is still an involved process. You have to submit a detailed business plan (in English, and sometimes Thai summary) to the BOI outlining the project, investment, employment, technology, etc. There will typically be an interview or presentation where you (or your consultant) present the project to BOI officials. This can be nerve-wracking if you’re not prepared, though in practice BOI officers are generally friendly and want to help if your business fits their criteria. Still, it can take 1–3 months to get approval, depending on the project and BOI committee schedules. It’s not an instant “walk in and get it” process.

• Ongoing Compliance: With great perks come responsibilities. You will have to report to the BOI regularly (usually annually) on your progress – e.g. how many people you hired, your revenues, etc. You must stay within the scope of the promotion. If you got an 8-year tax holiday for doing R&D and then you start doing non-promoted trading activities on the side, income from those might not be tax-exempt and you could even risk your promotion status. Some companies choose to keep two entities – one BOI for the promoted stuff, one normal for other activities – to avoid mixing. As an SME, you might just stick to your lane. In any case, failing to meet BOI conditions (like not hiring the required Thais or not investing what you promised) can lead to losing the promotion (and thus losing the foreign ownership privilege and tax incentives going forward). You’d then either have to restructure to Thai majority or scramble for an FBL. So it’s critical to only commit to what you can deliver in the BOI application.

• Geographical Limitations: Certain promotions may be limited or have different incentives based on location (BOI has investment zones – e.g. Zone 1 includes Bangkok and has slightly fewer incentives than Zone 3, the lesser-developed areas). For most service businesses this is not a big issue (services often aren’t location-specific for incentives), but for manufacturing, you might get better tax breaks in rural areas than in Bangkok. Still, you will be operating in Bangkok presumably, which is fine – just note that you might not get some extra perks that a more rural investment would.

Key Requirements: To utilize BOI, you will incorporate a Thai limited company (minimum 3 shareholders like others). Typically, you do not incorporate until your BOI application is approved (you apply as a foreign individual or foreign company intending to set up a Thai company). Once BOI approval comes, you’ll be instructed to register the company and then apply for the BOI promotion certificate issuance, and finally obtain a Foreign Business Certificate from the Ministry of Commerce (this is usually a formality once you have BOI approval). The registered capital of the company often must match what you proposed to invest in your BOI application. Many projects use THB 1M as a safe minimum if allowed. Some categories might explicitly require a certain capital – e.g. an International Business Center requires at least THB 10M capital (hence not SME-friendly). But a software or tech startup can often start with THB 1M to 2M capital. This needs to be paid in according to BOI timelines (often within the first 6 months or year). You’ll need a Thai office address for the company (which can even be a coworking space or a small serviced office – BOI doesn’t mandate you have a huge office, but you should have some premises to show). You also must submit evidence of funds for your investment – for individuals, this means you should bring in the capital from abroad. If the investor is an overseas company, they’d need to inject funds.

Timeline: The BOI application process can range from 4 weeks to 12 weeks for approval, depending on the project and how quickly you can respond to queries. Tech startups sometimes get fast-tracked (there are initiatives to attract startups, and the BOI has even introduced a “Smart Visa” for startups). After approval, you have to incorporate the company (another 1-2 weeks) and then fulfill BOI registration steps (issuing the promotion certificate, registering the investment, etc., maybe another few weeks). All told, you might realistically be fully set up in 2–3 months with your BOI company ready to operate. The good news is once you have the BOI approval letter, you can often start some preliminary operations (like securing a visa under BOI “urgent” quota, opening bank accounts) even while final paperwork is being processed. Also, getting work permits for you and foreign staff is extremely fast after incorporation – often done in a matter of days through the BOI one-stop center, since no quota issues. So you save a lot of time on the HR front.

Visa & Work Permit Implications: As highlighted, BOI companies have major advantages for visas and work permits. You can sponsor multiple foreign experts without needing 4 Thais per person. The process is streamlined online via BOI’s e-Service systems. For example, if you and a co-founder and two foreign software developers want to all work in Thailand, a BOI-promoted software company can get all four of you work permits and one-year visas, potentially before hiring any Thai (though ultimately you are expected to hire the Thai staff as per your promotion plan, say 5 Thai developers within a couple years). There’s also more flexibility in work permit job descriptions – you can be listed as something like “Engineer” or “Specialist” even if you don’t have a degree in that field, as long as BOI supports it. Another benefit: spouse and dependents of BOI visa holders typically get dependent visas easily, and spouses could even get permission to work (or use the new LTR spouse work permission, etc.). Additionally, BOI companies can often get their foreign employees extended visa status without the employees having to do 90-day immigration reporting in the usual way (they still report, but the one-stop center simplifies it). In summary, for an SME that needs to bring in foreign talent or simply wants the foreign founder to legally work without hiring a bunch of Thais first, BOI is by far the most convenient structure for work permits.

Deal Breakers / Considerations: The BOI option is fantastic if you qualify. The main deal breaker is eligibility: if your business idea is not in a BOI category, this path is closed. Many “lifestyle businesses” (restaurants, trading of generic products, consulting for local clients, etc.) just don’t fit BOI promotions. Don’t try to shoehorn an ineligible business into BOI; if it’s clearly outside their scope, it will be rejected and you’ll lose time. On the other hand, some businesses have a mix of activities – you might consider splitting functions. For instance, if you have a remote SaaS company serving global customers, that clearly fits BOI’s software category (100% foreign allowed, no tax, etc.). But if you also want to do some local consulting on the side, you might keep that outside the BOI company to avoid violating BOI terms. Another consideration: scale and commitment – BOI promotions expect you to genuinely execute a business plan. If you are a solo entrepreneur who just wants a visa and to dabble, BOI may be more structure than you need (and they do require you to form a company, hire some staff, etc., eventually). If you aren’t ready to commit to meeting the hiring or investment plans, you might fall out of compliance. However, even fairly small startups can and do use BOI successfully – for example, foreign founders of a tech startup often use BOI to start up with maybe 2–3 foreigners and 1–2 Thai staff and then grow from there. BOI offices often give some leniency in early years as long as they see progress.

In short, if you’re in tech/innovation or certain manufacturing – BOI promotion is likely your best route. It provides 100% ownership, legal flexibility, and practical operational benefits (like easy work permits and tax savings) that are ideal for a growing SME. Thai-Co works closely with BOI-specialized lawyers to help prepare and submit applications, making this process much easier for clients. We’ve helped software startups, digital agencies, and even small manufacturing firms obtain BOI and smoothly start operations in Bangkok.

U.S.-Thai Treaty of Amity Company (For U.S. Citizens)

What It Is: The U.S.–Thailand Treaty of Amity and Economic Relations (1966) is a special bilateral agreement that gives American citizens (and American-majority companies) a unique advantage: the ability to own a Thai business 100% (or majority) in most industries, without needing a Foreign Business License or Thai majority ownership. In essence, a company that qualifies under the Treaty of Amity is treated as Thai for most purposes of the Foreign Business Act. Setting up a Treaty of Amity company means incorporating a Thai company with majority US shareholding and then registering it under the treaty to receive a certificate confirming its Amity status. This has been a popular route for U.S. entrepreneurs and firms operating in Thailand because it sidesteps many restrictions (though some exceptions apply).

Allowed Activities: An Amity company can engage in the vast majority of business activities open to Thai companies, including service businesses, trading, manufacturing, etc., without needing an FBL. However, the treaty does exclude several specific sectors to protect Thai interests. Under the Treaty of Amity, American-owned companies are not allowed to engage in:

• Communications: e.g. telecommunications businesses (running telecom networks, broadcasting, etc.) are excluded.

• Transportation: domestic transport businesses (such as domestic airlines, trucking, shipping lines within Thailand) are not permitted under the treaty. (International transport or freight forwarding might be possible, but anything classified as domestic transport is out.)

• Fiduciary functions: this means services that involve holding assets in trust, managing funds for others, etc. – for example, trust companies or maybe certain insurance or legal fiduciary roles.

• Banking with Depository Functions: Amity companies cannot engage in regular retail or commercial banking that takes deposits. (U.S. banks in Thailand still have to get special licenses like any foreign bank; the treaty doesn’t let an American open a normal bank freely.)

• Land Ownership or Exploitation of Natural Resources: The treaty does not allow American companies to own land or engage in exploiting natural resources like mining, forestry, etc.. (Those remain restricted similar to other foreigners, aside from the land exceptions via BOI or specific laws.)

• Domestic Trade in Indigenous Agricultural Products: This is essentially trading (wholesale or retail) in Thailand’s native agricultural products (e.g. rice, sugar, farm produce) is excluded. The idea is to protect Thai farmers and agricultural trade.

Other than these carve-outs, an Amity company can do pretty much anything a Thai company can do. For example, consulting services, restaurants, manufacturing, import/export, retail of non-agricultural products, software, education services, etc., are all permitted for 100% U.S.-owned companies under the treaty. You do not need to apply for an FBL for those activities; you simply operate under the Amity certificate.

Pros:

• 100% Ownership for Americans: If you’re a U.S. citizen (or U.S. company) investor, this is the most straightforward way to own your Thai business fully and legally. You avoid having to find Thai shareholders or go through BOI or FBL processes. The treaty essentially gives you a similar privilege as a Thai national in business.

• No Restricted-Sector License Needed: Except for the few excluded sectors above, you don’t need special licenses under the FBA. Once you have your Treaty of Amity certificate, your company is free to operate in permissible sectors just like a Thai-majority company. This saves a huge amount of time and uncertainty compared to, say, an FBL application. The certification process for the treaty is usually procedural (verifying American ownership) rather than evaluative on business merit.

• Relatively Quick and Simple Setup: Setting up an Amity company is faster than an FBL. The steps are: (1) incorporate a Thai company with the required American shareholding and director structure, (2) get a certification letter from the U.S. Embassy in Bangkok or U.S. Commercial Service attesting that shareholders/directors are U.S. citizens, and (3) apply to the Thai Ministry of Commerce for the Treaty of Amity certificate (sometimes called a “Foreign Business Certificate under Treaty”). This whole process can often be done in 4–8 weeks total. Unlike BOI, you don’t have to present a business plan or meet special capital or hiring targets (beyond the standard minimum capital). It’s largely an administrative process.

• Flexibility in Business Type: The Amity route is especially useful for Americans who want to do businesses that are not high-tech or targeted by BOI. For example, a solo consultant, a small marketing agency, a boutique finance advisory, a trading company, or an import/export business – if the founder is American, they can do all these under Amity where other nationalities might struggle to get an FBL. Americans can even open retail businesses (like a shop or restaurant) under the treaty, whereas other foreigners would have to go Thai-majority. (Note: running a bar or restaurant is allowed under Amity as long as not on the exclusion list – it is, and many Americans do this, though you still must follow other laws like obtaining food/alcohol licenses as any Thai business would.)

Cons:

• Nationality Restriction: The obvious con – this benefit is only for U.S. citizens or U.S.-majority companies. If you’re not American (or don’t have an American business partner), you can’t use this route. We sometimes encounter people looking for a “passport workaround” (e.g. having an American friend front as majority owner), but be cautious: the treaty requires that 51% of shares are owned by U.S. citizens or U.S. entities, and at least 50% of the company’s directors must be U.S. persons. If you tried to use a nominal American just to get the status, you’d be putting yourself at that person’s mercy legally (similar to a nominee issue). Also, if the authorities ever found that the American ownership was not genuine, the certificate could be revoked. So this is really only a solution if you are American or are comfortable truly partnering with one who will be majority owner.

• Sectoral Limitations: While the treaty opens most sectors, those few exclusions can be significant if you happen to be in one. For instance, if an American wants to do a farm or plantation, they’re out of luck (agriculture is excluded). Or if an American investor wanted to start a local telecom service or TV station, they can’t under Amity (communications excluded). Banking and finance is another area – an American can’t just start a bank; they’d have to go through the normal Bank of Thailand licensing. Most typical SME activities are fine, but it’s worth double-checking if your idea touches any excluded area. If it does, being American won’t help – you’d have to consider BOI or Thai majority or some other structure if possible.

• No Special Tax Incentives: The Treaty of Amity doesn’t confer any tax breaks or investment incentives. Your company will be taxed at the standard 20% corporate rate, etc. It strictly deals with ownership and national treatment. So unlike BOI, you won’t get tax holidays or duty exemptions just for being an Amity company. (However, you might qualify for other incentives if applicable, but not automatically from treaty status.)

• Minimum Capital Requirement: Amity companies, being foreign for legal purposes until certified, need to adhere to the general rule of THB 2 million minimum capital as well (to satisfy FBA Section 14) if engaging in normal business. In practice, the Ministry of Commerce will expect to see at least 2M registered capital when you apply for the certificate. If you plan to employ foreigners, you’d want 2M per work permit anyway. So while not a huge con, Americans don’t get to circumvent the capital requirement – you can’t open your business with, say, 100k baht and still get the treaty protection; you’ll need to pony up the standard capital.

• Administrative Step Required: Some people assume just being American automatically grants the privilege. You must go through the paperwork to register under the treaty. This includes obtaining a notarized affidavit from the U.S. Embassy (which has a modest fee and requires proof of your citizenship and ownership) and then the application to Thai authorities, which might take a few weeks. Until the certificate is issued, your company technically is just a foreign company that would be restricted. So you have to be careful not to start any restricted operations until you have the certificate in hand (or at least submitted – sometimes if you’ve filed and it’s in process, it’s generally okay, but the safest is to wait). The process is not difficult, but it’s an extra step to manage and might require some Thai-language filings – usually handled by a legal service.

Key Requirements: To qualify for Treaty of Amity status, your company must have >50% of shares held by U.S. citizens or U.S.-incorporated entities, and >= 50% of the directors must be U.S. persons. In practical terms, most people just make it 100% U.S.-owned for simplicity. If you have multiple founders and not all are American, you’ll need to structure it such that Americans hold at least 51%. For example, if an American teams up with a British citizen, the American must hold at least 51%, the British 49%. The treaty doesn’t require 100% American ownership, just majority. Also, the company must be registered in Thailand (you can’t directly operate as a foreign LLC in Thailand under the treaty; you incorporate a Thai company). As mentioned, minimum capital ~THB 2M is expected. The procedure is: (1) incorporate the company, (2) obtain an official letter (affidavit) from the U.S. Embassy confirming details of American shareholders (the U.S. Commercial Service in Thailand can assist with this; they basically need to see passports of the American shareholders and company registration papers), and (3) submit that letter with an application to the Thai Department of Business Development for the Amity certification. There is a government fee for the certificate (around THB 20,000). The certificate acts similar to a foreign business license but is granted by virtue of the treaty, not discretion – as long as you meet the criteria, they must issue it (usually within 30 days of application). Renewal: The Treaty of Amity certificate doesn’t usually expire, but you must continue to meet the American majority condition. If you ever change shareholding such that Americans go below 50%, you lose the protection immediately. So you should monitor your share structure (e.g. if issuing new shares or transferring shares, keep Americans in majority).

Timeline: Incorporating the company: ~1 week, obtaining the U.S. Embassy letter: 1–2 days (it usually can be done by appointment fairly quickly), DBD approval of certificate: up to 30 days by law (often done in 1–2 weeks if everything is in order). So roughly 3–5 weeks total to be fully done, though we say up to 2 months to be safe. This is significantly faster than a typical FBL which could be 3–6 months. During the interim after incorporation and before certificate, you can prepare other things (open bank account, etc.), but technically the company shouldn’t engage in restricted business with Thai clients until the Amity certificate is granted.

Visa & Work Permit Implications: This is one area where Amity companies are treated like any other Thai company, meaning they do not get the labor law exemptions that BOI companies get. Even though an Amity company is “Thai” for business purposes, the labor/immigration authorities still see it as a company with foreign leadership for work permit purposes (since it will still be majority foreign-owned, albeit American). In practice, you will need to abide by the standard rule of 4 Thai employees per foreign work permit and THB 2M capital per work permit to sponsor visas. The treaty doesn’t waive those requirements. So if you’re an American solo entrepreneur forming an Amity company, you’ll likely need to hire 4 Thai staff to get your own work permit, similar to the Thai majority company case. This can be a surprise to some — “I’m American, I thought I could just get a work permit easy” — but Thai law doesn’t differentiate that much here. The advantage of Amity is ownership, not ease of getting a work permit (that advantage lies with BOI or special visas). That said, you might find some flexibility in enforcement sometimes (small Amity companies have been known to sometimes negotiate down the Thai employee requirement, but officially the rule stands). One thing to note: if you are an American with an Amity company and you don’t want to hire 4 Thais initially, you might consider the SMART Visa program if you qualify (for example, SMART “Talent” if you have a high salary in a tech field, or SMART “Executive” if your company has significant investment). Or if married to a Thai, the requirement is less. But these are individual cases. Plan for the full 4:1 rule to be safe. Once you have the required Thai staff and capital, an Amity company can sponsor visas and work permits just like any Thai company. No extra hurdles – you’ll get a standard one-year non-immigrant “B” visa and work permit for each foreigner employed. There’s no one-stop center like BOI, so you go through normal immigration and labor department channels. That involves a bit more paperwork and time (and 90-day reporting for foreigners), but it’s routine. In summary, visa/work permit is achievable under Amity, but don’t expect special treatment on quotas – you’ll need to comply with general rules or use complementary programs for exceptions.

Deal Breakers / Considerations: The Treaty of Amity route is a no-brainer if you’re a U.S. citizen wanting to run an SME in Thailand outside the high-tech space. The main deal breaker is if you lack a U.S. partner and you yourself aren’t American. For non-U.S. folks, this treaty unfortunately doesn’t help (some clients ask if they can “use the treaty” by having a small American shareholder – technically no, the American must be majority, so if you’re not willing to give majority to a U.S. person, you can’t benefit). Also, keep in mind that while this structure makes things easier legally, you still have to run a business in Thailand – meaning dealing with local regulations, tax, hiring, etc., same as any Thai company. Being American-owned doesn’t exempt you from, say, obtaining a restaurant license or a teaching license if you open a school. You’re simply free of the foreign ownership restriction. Another consideration: If you ever decide to sell the business or bring in non-U.S. investors, you either have to maintain U.S. majority or lose the treaty status (which would then require you to restructure under FBA rules or get an FBL). Some larger American-owned companies have fallen out of treaty protection after a global merger changed their ownership mix – not common for SMEs, but worth noting if, say, you plan to raise venture capital and the new investors aren’t American, you might have to adjust the structure (there are ways, such as keeping Americans with 51% voting rights, etc., but gets complex). Finally, ensure you renew your annual corporate filings and maintain good standing; the Amity certificate can be revoked if the company fails to comply with Thai corporate laws (just like any company could be dissolved for non-compliance). Thai-Co can assist U.S. clients with the entire Amity registration process, making it relatively seamless to set up your fully-owned company in Bangkok.

Representative Office

What It Is: A Representative Office is a foreign business presence that is not actually a separate legal entity in Thailand, but rather an extension (“rep”) of an overseas company. It is 100% foreign-owned by definition, since it’s part of the foreign company, and it is allowed to operate in Thailand without engaging in commercial transactions. A Rep Office is used solely for “non-trading” activities to support the head office – for example, market research, sourcing products, or liaising with customers. It cannot earn income or sign sales contracts in Thailand. This structure is popular for foreign companies that want a small presence in Thailand to explore the market or coordinate business, without starting a full-fledged subsidiary.

Allowed Activities: By Thai law, a Representative Office is extremely limited in scope. The government explicitly allows only five types of activities for rep offices:

1. Reporting on business developments in Thailand to the head office. (Basically, market intelligence and data gathering.)

2. Providing advice or assistance related to products of the head office that are sold to distributors or customers in Thailand. (For instance, a rep office of a foreign manufacturer can advise local distributors on technical details, or help customers with product info, as a customer service function.)

3. Sourcing goods or services in Thailand for the head office. (E.g., finding local suppliers, conducting procurement or quality checks on Thai products to ship to HQ.)

4. Inspecting and controlling the quality and quantity of goods purchased or made in Thailand for the head office. (Quality assurance for orders that the foreign HQ placed in Thailand.)

5. Disseminating information about new products or services of the head office. (Marketing and promotion – but note, just promoting, not actually selling or taking orders.)

Crucially, a rep office cannot engage in any revenue-generating activities in Thailand. That means it cannot accept purchase orders, cannot sign sales contracts, cannot invoice customers, and cannot earn income from Thai residents or companies. It’s a cost center – all expenses of the rep office must be borne by the foreign head office (usually via remittances of funds). If a rep office strays outside these allowed activities and effectively starts doing business (like providing services for a fee or selling goods), the Thai Revenue Department will treat it as having income and subject it to corporate tax, and the authorities could demand it converts to a normal company or shut it down.

Pros:

• 100% Foreign-Owned & Controlled: You don’t need Thai shareholders or partners at all. The rep office is entirely an arm of your foreign company. This is ideal for maintaining control and confidentiality if you’re just exploring Thailand and not ready to localize ownership.

• No Foreign Business License Needed: Operating a rep office is permitted under an explicit exemption of the Foreign Business Act (service activities of a rep office are allowed as long as they stick to the defined scope). You do have to register the rep office with the Commerce Ministry, but it’s a notification process rather than a discretionary license. So compliance is straightforward if you follow the rules.

• Simplified Taxation: Since a rep office must not generate income, it generally does not pay Thai corporate income tax (because there’s no revenue, only expenses). It merely needs to file nil or loss returns. The only tax it might pay is withholding tax on things like interest earned (if any idle funds earn interest). In short, it’s not subject to profits tax (though you still need a tax ID and must submit annual financial statements showing that HQ covers the expenses). This can save money if you truly only need a support office without local revenue.

• Lower Staffing Requirement for Visas: A major practical advantage: Representative offices are exempt from the usual 4 Thai employees per foreigner work permit ratio. In fact, one rep office can sponsor 1 foreigner with only 1 Thai staff. The rule is effectively 1:1 instead of 4:1. If you need a second foreign employee, you must bring in additional capital and hire one more Thai (so it stays 1 Thai per foreign). Typically, rep offices are small (often just 1–3 people total), and the labor authorities are fine with that. This is hugely beneficial for a small foreign firm that just wants to station one expat in Bangkok to do market research or coordination, without running a full business operation. You avoid the burden of hiring a large Thai staff just to satisfy a ratio.

• Relatively Easy Setup and Compliance: Setting up a rep office does require registration with the DBD, but it’s generally quicker and simpler than getting an FBL. Thailand has actually made rep office registration easier in recent years by removing the need for a separate Foreign Business License (previously, rep offices needed one, but now they just register directly as a rep office). The timeline is usually about a month or so. Ongoing compliance is minimal: you don’t do sales invoices, you don’t collect VAT (since no sales), and bookkeeping is just recording expenses funded by HQ. Annual audits/financial statements are still required, but they’re simple. So administrative overhead is lower than running a full company that deals with many transactions.

Cons:

• No Earning Revenue: The biggest limitation is you cannot make money. The rep office cannot invoice anyone in Thailand for products or services. If you accidentally do (say your rep office employee negotiates a sale and signs a contract on behalf of HQ), you’re treading illegal waters. The design is that all revenues must happen through your foreign head office, not in Thailand. This means your Thai rep office is purely a cost center – it will always run at a loss (funded by HQ). For SMEs, this means you need to have an existing company abroad with enough resources to support the Thai office. If you’re a new entrepreneur looking to start earning from Thai clients, a rep office does not allow that.

• Limited Business Scope: You’re legally bound to the five activities listed earlier. If your activities drift even slightly into “doing business” – for instance, giving detailed product support to Thai customers could edge into “service” territory if not careful, or if you try to negotiate contracts on behalf of HQ, you must ensure HQ signs them abroad, etc. The line can blur, and you must constantly self-audit to ensure you’re within permitted scope. If you need to do something outside those five categories, a rep office isn’t suitable. For example, a rep office cannot even provide after-sales repair services (that’s a service not allowed; only advice is allowed). It cannot engage in installation or training services beyond advisory relating to HQ products, etc. So it’s quite restrictive.

• No Local Invoicing = Potential Business Hurdles: If you have Thai customers or suppliers, the rep office cannot contract in its own name for sales. Contracts have to be between your foreign HQ and Thai parties. Some Thai customers might be hesitant or find it inconvenient to deal with an overseas entity (e.g. they have to handle cross-border payments, import procedures, etc.). Similarly, if you are sourcing, you can’t have the rep office buy goods for export – the HQ must technically be the party buying and exporting, with the rep just facilitating. This can complicate logistics and paperwork. In essence, a rep office isn’t a profit center or transaction center; it’s just a facilitator.

• Capital and Expense Requirements: Although no minimum capital is “locked” as paid-up capital like in a company, you are required to remit a certain amount of funds from abroad to finance the rep office operations. The regulation typically requires at least THB 2 million over the first 3 years of operation. Often this is staged: e.g. bring in 25% (THB 500k) in the first few months, another tranche later, etc., until 2M is reached by year 2 or 3. If you want to support more than one foreigner, you’ll need to remit more (as noted, 2M per foreign employee). This money isn’t a fee, it’s just capital to run the office (pay rent, salaries, etc.), but it means you must have the financial ability to sustain the rep office. Additionally, since the rep doesn’t earn money, you need a plan to cover ongoing costs indefinitely. This is typically only viable if the rep office’s purpose is indeed to support an existing profitable parent company.

• No Long-Term Business Growth in Thailand: A rep office is not a stepping stone to building a local business base, because you can never convert it to a revenue-generating unit without closing it and opening a proper company. It’s ideal for market entry research or liaison, but if you validate the market and want to start selling, you’ll likely have to establish a new entity (like a Thai company) to do actual business. So it’s somewhat temporary or limited-use by design. Many companies use a rep office to enter Thailand, then later graduate to a subsidiary once they’re confident. That transition will involve shutting the rep (since once you start selling, you can’t keep it as rep) and moving operations to the new company.

Key Requirements: A representative office must be set up by an existing foreign company. You cannot open a rep office as an individual or a brand-new company that doesn’t exist elsewhere – it’s supposed to represent a head office that is already operating outside Thailand. So requirement #1: you need a foreign-incorporated entity (which can be as simple as a sole proprietorship or as complex as a multinational corporation) to be the “parent”. Documentation from that parent (certificate of incorporation, board resolution to open the rep office, etc.) will be needed, with notarization and legalization. The rep office itself is registered with the Thai authorities by filing an application outlining the scope of work (limited to the allowed ones). Minimum capital to be brought in: THB 2 million over 3 years (with an initial amount typically at registration time, e.g. THB 500k). Local office address: you must have a physical office address in Thailand for the rep office (can be small, even a shared office, but must be a genuine location). Staffing: while you don’t need a Thai partner, you will likely hire at least one Thai staff (often an office manager or admin) because to run operations and to meet the 1 Thai per foreign requirement. Many rep offices have 1 Thai secretary/admin and 1 foreign rep. Permits: After registration, you’ll get a document that serves as an operating certificate. You won’t register for VAT (since no sales), but you will register for a corporate tax ID to file zero tax returns. Accounting: you must maintain books and submit audited financial statements yearly to the DBD and Revenue Dept., showing the rep office’s expenses and that it has no income (the audit confirms funds came from abroad). This is a formality but must be done.

Timeline: Registering a rep office takes roughly 4–6 weeks. The steps include preparing all parent company documents, getting them notarized, submitting the application to DBD, and waiting for approval. There’s no hefty scrutiny on “why” since rep offices by nature can’t compete with Thais (they don’t sell), so it’s generally granted as long as paperwork is in order. Once approved, you’ll remit the initial capital, set up the office, and then you can apply for the foreigner’s work permit and visa. Opening a bank account for a rep office might require the presence of the foreign chief rep (who may not yet have a WP until the rep is set up; sometimes they allow it with passport and rep office docs). Expect another couple weeks for bank and then 2–3 weeks for work permit (though as per Belaws, a rep office work permit for the director can be obtained without waiting 4-6 months for an FBL since rep office is already a kind of license). Actually, Belaws notes if you don’t have a Foreign Business License for the rep, the foreign director must have a work permit (which is our scenario; they removed the FBL requirement so you just do WP straight away). The work permit processing itself is quick (1-2 weeks). So in about 2 months, your foreign rep can be legally working in Thailand.

Visa & Work Permit Implications: As noted, one of the best features of a rep office is the favorable work permit ratio. For each foreigner, you need only one Thai employee and THB 2M capital, instead of 4 Thais. So a small rep office often has something like 1 foreign rep (the chief) and 1 Thai assistant – that meets the requirement (1:1). To hire a second foreigner, you’d need to hire one more Thai and inject an additional THB 2M capital (total 4M). Typically, authorities cap it at a few foreigners; Belaws mentions maximum usually 2 foreigners for a rep office, although in special cases possibly more with justification. For most SMEs, 1 or 2 expats is sufficient at a rep stage. The process to get the work permit is straightforward once the office is registered and capital is in: you apply to Ministry of Labor citing the rep office status (which exempts the 4:1 rule automatically), show proof of the capital remittance and Thai hire, and you’ll get the work permit. The foreign rep will be granted a Non-Immigrant “B” visa initially (sometimes you start with a 90-day single entry, then convert to 1-year once the WP is approved). All the standard rules like 90-day reporting and annual renewal apply, but those are routine. Since rep offices can use the one-stop center if they have the FBL; however, nowadays rep offices don’t get an FBL, but they might still allow rep offices to renew visas at one-stop. Actually, note from Belaws: if a rep office holds an FBL (old regime) the director might not need a WP; but since now we don’t do FBL, the director does need WP. So ignore that confusion; bottom line: WP needed, but ratio is easy. Another nice thing: rep offices by nature often imply that the foreign staff are “management” sent by HQ, so typically those individuals have an easier time proving qualifications for a work permit (not that it’s heavily scrutinized anyway for a normal WP). The key is just maintaining that Thai hire alongside them. Also note, the Thai employee(s) should be on payroll with social security contributions to count toward the quota.

Deal Breakers / Considerations: A Representative Office is ideal for foreign companies that do not intend to earn Thai revenue in the short term. If you are essentially doing an exploratory or support mission, it’s great. For example, a foreign consulting firm wanting to gather market data can post one of their consultants in Bangkok via a rep office. Or a manufacturing company from abroad can set up a rep office to source Thai raw materials and inspect quality without selling anything in Thailand. If you are an individual entrepreneur without an existing company abroad, a rep office is usually not an option – you’d first need to set up a company in, say, your home country and then register its rep office here. That’s a lot of structure just to get a visa if your ultimate goal is to actually do business in Thailand – in such case, you might rather set up a Thai company (with Thai majority or an FBL) or look at other visas (e.g. Thailand now has a Long Term Resident visa for “Work from Thailand Professionals” that might suit some remote workers). Another consideration: converting from rep office to real business – if your strategy is to start as rep to test waters then later switch to a normal company to start sales, note that you’ll basically have to close the rep (deregister with DBD and tax) and incorporate a new entity (or bring in the parent to own a new Thai company under FBA rules or BOI). Assets of the rep (like equipment) can be transferred but it’s an administrative process. It’s doable, just not an automatic transition. Additionally, banking: rep offices can open a Thai bank account but often under the name “Rep Office of XYZ Co. Ltd.”, and you’ll likely only receive funds from HQ, not locally. Repatriating money is straightforward since it’s just leftover HQ funds (and no dividend issues since no profits). Finally, transparency: authorities know rep offices don’t earn money, so if one continues for many years without evolving, occasionally officials might inquire if they are still adhering to scope. As long as you are, there’s no time limit on how long you can have a rep office (some companies keep them for decades as liaison offices).

In summary, Rep Office is a compliance-friendly workaround for certain scenarios: It allows a foreign SME to have boots on the ground in Thailand (with an expat or two) to do non-revenue tasks, without engaging a Thai partner or investing large capital beyond operating expenses. It’s not suitable if you aim to actually trade or render paid services in Thailand, but it can be an excellent interim step or permanent solution for companies that only need a presence here for support functions.

Branch Office (Foreign Branch)

What It Is: A Branch Office is another form of foreign commercial presence, where instead of creating a new Thai company, a foreign company registers an extension of itself in Thailand. Unlike a representative office, a branch is allowed to earn income in Thailand. However, it is still legally part of the foreign company (not a separate legal entity). Branches are more commonly used by larger corporations (e.g. foreign banks, airlines, or construction companies taking on projects) but can be considered by SMEs in certain cases. The branch must operate under the rules of the Foreign Business Act – meaning if it does activities restricted to foreigners, it needs a Foreign Business License just like a foreign-owned company would. Essentially, a branch office in a restricted sector is treated similarly to a 100% foreign company in that sector, except it’s not a new company but the same foreign company extending its operations.

Allowed Activities: Branches can engage in commercial activities and generate income in Thailand, subject to obtaining necessary licenses. There isn’t a fixed list like rep office; a branch can do whatever the foreign company wants to do here (sales, services, etc.), as long as those activities are legal and approved under Thai law. If the business activities would fall under the FBA’s List 2 or 3, the branch must get a Foreign Business License before operating – just as a new company would. For example, if a Singaporean consulting firm opens a Thailand branch, that branch will need an FBL to provide consulting services locally, since it’s a “foreign entity” engaging in List 3 service. If a foreign manufacturing company opens a branch to run a factory, manufacturing might not be restricted, so it could proceed without FBL, though other factory licenses would be needed. In summary, a branch doesn’t have inherent exemptions – think of it as a foreign company directly operating in Thailand, which it legally is.

One nuance: since a branch is the same legal entity as HQ, sometimes branches only undertake a specific project or contract in Thailand. For instance, a foreign construction firm might register a branch just to execute one large project for a couple of years (they get an FBL for construction for that project). SMEs might use a branch if, say, you have an overseas company that wants to invoice Thai clients directly without setting up a subsidiary. But you’ll still need any applicable FBL or license to do those invoiced activities if restricted.

Pros:

• Single Legal Entity: The branch is not a separate company, so all contracts in Thailand are actually in the name of the foreign head office. This can be good for continuity – your customers are effectively dealing with the parent company (just through its branch). It also means you don’t have to inject permanent capital into a new Thai entity (though you must fund the branch’s operations as needed). Profits and losses are directly those of the head office. For some businesses, this unified structure is simpler for accounting or liability management.

• 100% Foreign Control: Naturally, since it’s just your foreign company, there are no Thai partners or shareholders involved at all. You keep total control. And there’s no share capital divided into Thai/foreign portions, etc.

• Full Range of Activities (with license): A branch can theoretically do any business (unlike a rep office), as long as you get the FBL for it if required. There’s no inherent limitation like the rep’s “non-income” rule. So it’s a fully operational presence. For example, a U.S. company could choose to open a branch (instead of an Amity company) to provide services in Thailand – they would still use the Treaty of Amity to exempt from the FBL perhaps (treaty can apply to branches too if majority US-owned company), or if not American, get an FBL.

• Ease of Repatriation: Since profits of a branch are legally profits of the head office, moving money out is simpler. There is no concept of issuing dividends (which in a subsidiary would incur 10% withholding tax when paid to foreign parent). Instead, after paying Thai taxes, remaining profit can be remitted to HQ as needed. Note: Thailand does levy a branch profits remittance tax (10%) on remittances of profits, which is similar to dividend withholding. But you have control over timing – you might not need to formally “declare” dividends, you can just move funds. And if you’re using them for HQ expenses, etc., it’s straightforward.

• Potentially Simpler Accounting: You might consolidate accounts with HQ easier since it’s one company. Also, you avoid some statutory requirements like creating a new set of audited accounts for a subsidiary (though you still need to file accounts for the branch locally). A subtle pro is that a branch might not need to do separate transfer pricing documentation for inter-company transactions between Thai entity and HQ, since branch and HQ are the same entity (but you still should use fair internal accounting for Thai tax purposes).

• No Thai Corporate Shareholder Rules: For example, if it’s a service business with branch status and gets a license, you won’t need to maintain the 3-shareholder structure (as that’s for Thai companies). It’s just the one foreign company. Some formalities like holding annual shareholder meetings, etc., are not applicable – the branch is governed by HQ’s corporate governance.

Cons:

• Foreign Business License Often Required: A branch doesn’t avoid the need for an FBL; it often triggers it. The FBA says a foreign company doing business in Thailand must get a license unless exempt. So, if you’re not under a treaty or BOI, you’ll have to go through that licensing process, which is the same complexity and uncertainty as described earlier for a 100% foreign subsidiary. And branches might draw extra scrutiny because they tend to be used for significant operations. Basically, for restricted sectors, branch vs subsidiary doesn’t save you from Thai bureaucracy on approvals.

• Higher Capital Requirement for License: Thai law specifically requires that a branch office of a foreign company must bring in a minimum capital of at least 25% of the branch’s three-year estimated expenses, but not less than THB 3 million. In plain terms, THB 3 million is the floor for branch capital, and you might need more if your operation is big. This is actually a higher minimum than the THB 2M required of a subsidiary for most cases. So, you should be prepared to remit at least 3M baht to Thailand to fund the branch (not necessarily all at once; often they’ll want a chunk upfront and the rest within certain years). This capital is similar to rep office in that it’s funds to be used, not a formal “capital stock” like a company, but it’s mandated. For an SME, 3M vs 2M baht isn’t huge, but it’s an extra cost.

• Parent Company Liability: This is critical – since the branch is not a separate legal entity, any liabilities incurred by the branch are direct liabilities of your foreign company. If the branch is sued or accumulates debt in Thailand, your headquarters is on the hook fully. In contrast, a subsidiary limited company provides a liability shield – the parent is only liable up to its capital investment. With a branch, if something goes wrong (say a big lawsuit or contract dispute), the foreign company’s assets worldwide could be targeted once Thai judgments are recognized, etc. This risk often deters smaller companies from using branches unless they are very confident about the operations.

• Taxation Nuances: A branch is taxed on its Thailand-sourced income at 20%, same as a company. But a branch must be careful in accounting which income is “Thailand-source.” Typically, any income the branch earns from activities in Thailand is taxable in Thailand. If HQ directly does some sales to Thai clients (not through branch), that might not be counted as branch income, but if the branch had any role, it could be attributed. Also, as noted, when the branch remits profits out to HQ, there’s a 10% branch remittance tax. In effect, that makes the total tax similar to a subsidiary paying a dividend (which is 20% corp + 10% dividend WHT). If your home country has a tax treaty with Thailand, sometimes that remittance tax can be reduced (for example, under some treaties, branch profit remittance is exempt or lowered). The US-Thai treaty, for instance, eliminates branch profit tax for US companies, IIRC. But many countries don’t have that provision. So check the tax treaty if any. If none, expect the same combined 27-28% effective tax like a subsidiary would face on profit repatriation. So tax-wise, branch vs company often nets out similarly, unless treaty relief.

• Perpetual Foreign Status: A branch will always be considered a “foreign entity” for any Thai regulations. It can’t ever be treated as Thai even if Americans own the parent, unless that parent qualifies under a treaty itself. For example, if you’re an American-owned company and open a branch, you might try to get Treaty of Amity status for the branch. I believe it is possible for a branch to be registered under the treaty (since the treaty covers “companies of U.S. nationals” which could include branches). But more commonly, Americans just set up a subsidiary to use the treaty. For other nationalities, no treaty really helps.

• Potential Perception Issues: Dealing as a branch of a foreign company might make some Thai partners or government offices treat you differently. Sometimes opening a local limited company demonstrates long-term commitment and local presence; a branch may be seen as more transient (though that’s subjective). Also, when recruiting employees, some may feel less secure working for a “branch” since technically if HQ dissolves it, the branch is gone (whereas a subsidiary at least has local accounts etc.). These are soft factors but worth noting.

Key Requirements: Like the rep office, you must have an existing foreign company to register a branch. You’ll need to prepare legalized incorporation documents of the parent, board resolutions, etc., authorizing opening the branch in Thailand. Foreign Business License: if required for your sector, you must apply, demonstrating at least THB 3M capital to be brought in. If you are eligible for a treaty (like American), you’d apply for a treaty certificate for the branch to bypass FBL. Capital remittance: plan to bring in that minimum capital (THB 3M) in installments (usually 25% on license approval, rest over a couple years). Registered address: a branch must have a local address in Thailand. Tax registration and possibly VAT: if the branch will generate income, you need a tax ID and if doing business that requires VAT (most do above a low threshold), register for VAT. Accounts: The branch must maintain accounts of its operations in Thailand and file annual financial statements (audited) just like a company. However, those statements are for branch operations. Branch Manager: You’ll appoint a Branch Manager (could be the foreigner in charge or a Thai staff) who is the person responsible in Thailand. That person often signs on behalf of the branch locally.

Timeline: Similar to foreign company with FBL: perhaps 2–4 months if an FBL is needed (application and approval). If using Treaty of Amity, similar timeline ~1 month for treaty processing after incorporation. Actually, with a branch you don’t incorporate per se, but you still have to register the branch with the DBD and get the certificate of incorporation (for branch) and tax registrations, etc. That alone can be done in a few weeks if treaty route. If FBL route, add a few months. So timeline depends on whether you need an FBL.

Visa & Work Permit Implications: A branch office is treated like any foreign-owned company for labor purposes. So the 4 Thai employees per foreign work permit and THB 2M capital per WP rule applies (with the branch’s injected capital counting towards that) – unless you have a special concession (like if branch is under Treaty of Amity, no special labor concession though; if branch was BOI-promoted, you’d be using BOI anyway in which case we’d really call it a BOI company, not branch). Typically, branches do have to staff up with Thais if they want to hire expats. If it’s a short-term branch (like a project office), sometimes they get some leniency on ratio by treating it under a project basis, but that’s not a given. So an SME branch with one foreign manager would likely need to hire 4 Thai employees to satisfy the law. No shortcut here, which is a disadvantage compared to rep or BOI. So similar to a subsidiary: you’ll need Thai staff on payroll for each expat. The branch can sponsor non-immigrant B visas and work permits for foreigners like any company. Since it’s not separate, the foreign employees technically work for the foreign company but under branch status in Thailand. In practice, the process is the same as if they were employees of a Thai company. So, if an SME’s only reason to do a branch was to avoid Thai shareholder and they still have to hire 4 Thais, it’s usually no better than just having made a Thai company.

Deal Breakers / Considerations: For most SMEs, a branch office is rarely the first choice. It’s typically used by established companies that for internal reasons prefer not to create a subsidiary (perhaps for legal simplicity or because the Thai operation is clearly just an outpost of HQ and they want it all as one entity). If you are a small foreign company that just wants to invoice Thai clients, you might think a branch saves you from creating a new entity. But you’ll likely find the FBL requirement and capital and admin is just as much (or more) hassle than incorporating a Thai company. And you expose your HQ to direct liability. Unless there’s a tax treaty benefit (some foreign companies use branches to take advantage of something in a tax treaty about profit attribution), there’s little advantage. One scenario that could make sense: if you already have a company in, say, Singapore or Hong Kong, and you want to test Thai market by having a branch for a couple years (with proper license). If it fails, you close the branch and you didn’t have to liquidate a subsidiary. If it succeeds, maybe then you incorporate a local company or convert (though you can’t “convert” a branch to a company easily; you’d basically move contracts to a new company and close branch). For Americans, since the Treaty of Amity allows branch of a U.S. company to get national treatment too, one might think to avoid incorporating a Thai company altogether and just operate as “US Company – Bangkok Branch” under the treaty. That is possible. You’d still need to register as a branch and get the treaty certificate. Some large U.S. corporations do that. For a small U.S. entrepreneur, though, using a U.S. LLC as the parent and doing a branch vs just incorporating Thai under treaty – the latter is usually simpler in long run (because Thai banks, clients, etc., might be more familiar with a local co. than a foreign branch). Also, dissolving a branch requires clearing all liabilities and notifying agencies, similar to closing a company.

In summary, branch offices are an option but come with many of the same burdens as a fully foreign company (FBL, capital, Thai staff) without the liability protections. They might be relevant if you have a specific strategic reason to maintain unity with the parent company. For most small businesses, if you’re going to go through the trouble of FBL or treaty anyway, forming a Thai company (perhaps with treaty or BOI help) is usually the preferred path.

Other Treaties and Special Workarounds

Aside from the U.S. Treaty of Amity, Thailand has a few other international agreements that can affect foreign ownership rules, but none as sweeping as the U.S. treaty. It’s important to set correct expectations:

• “Treaty of Rome” (EU/EEA): Despite sometimes hearing this term, there is currently no special treaty between Thailand and the EU (or European Economic Area) that grants EU nationals the right to 100% ownership in Thailand. The “Treaty of Rome” generally refers to the EU’s founding treaty, which doesn’t apply to Thai law. In other words, being from an EU country gives you no exemption from the Foreign Business Act in Thailand. European investors are treated like other nationalities (the only exception might be certain provisions for specific industries under free trade agreements, but nothing general). Thailand is in ongoing negotiations for an EU-Thailand Free Trade Agreement, but as of 2025 it’s not in force and no special ownership rights exist yet for EU nationals under it.

• Other Bilateral FTAs (Australia, Japan, etc.): Thailand has free trade agreements with nations like Australia (TAFTA) and Japan (JTEPA), among others. Some of these agreements have clauses allowing a degree of market access or ownership beyond the FBA for certain sectors. For example, under TAFTA, Australian majority ownership is allowed in some service sectors like construction, certain telecommunications, and mining services, etc., and retailing certain products might be allowed under specific conditions. JTEPA similarly opened some sectors (e.g., engineering services, software development, etc. for Japanese investors with some conditions). However, these provisions tend to be very sector-specific and often come with conditions (like minimum capital or joint venture requirements). They are not blanket permissions. And using them practically requires consulting the specific FTA schedules and often still involves applying for a certificate from the Ministry (similar to the Amity certificate) to invoke the treaty rights. For an SME, navigating these can be complex, and many end up opting for easier structures (like BOI or finding a Thai partner) instead of trying to utilize an FTA clause, unless their business squarely falls into one.

• ASEAN Frameworks: If you are a citizen of another ASEAN country, note that Thailand, under the ASEAN Economic Community (AEC) agreements, has some commitments to allow majority ASEAN investment in certain industries (like logistics, trading, some tourism services) up to a certain threshold (usually 70% ASEAN ownership). But Thailand’s implementation has been slow and limited. In practice, being Singaporean or Malaysian might not significantly ease setting up an SME here, except in a few niches (and you’d still often have to get approval to invoke the AEC rule). This is a developing area, but currently not a game-changer for most SMEs.

• Treaty of Amity for Other Countries: Historically, Thailand had treaties of friendship and commerce with a few other nations (e.g., there was one with Japan pre-WWII and some European countries many decades ago). However, those were either terminated or superseded by the Foreign Business Act. Today, the U.S. treaty is the only one that broadly grants near-national treatment. So if you’re Canadian, British, Indian, etc., unfortunately there’s no equivalent treaty shortcut.

• Special Economic Zones (EEC): Thailand has the Eastern Economic Corridor (EEC) and other special zones where foreign investors might get relaxed rules. For example, in the EEC, some service businesses can be 100% foreign-owned if they register under EEC rules, and there are one-stop service centers. These are aimed at larger investments in specific provinces (Chonburi, Rayong, etc.). This might not directly help an SME in Bangkok, but if your business could be based in those zones (e.g. a tech company in a designated innovation park), it’s worth checking. For mainstream Bangkok-based SMEs, EEC likely doesn’t apply.

• Workarounds via Nominees (Not Recommended): We’ve touched on this, but to reiterate: using nominee Thai shareholders is illegal and risky. While some firms quietly still do this to claim “Thai majority” on paper, crackdowns (especially since 2024) have increased. It’s a red flag approach. If caught, at best your business is shut down, at worst you face criminal charges. Plus, it leaves the foreigner legally unprotected (the Thai “nominee” could abscond or claim the business truly, and you’d have little legal recourse since the arrangement itself was unlawful). Always opt for the legal paths we’ve described rather than this workaround.

• Local Partner (Genuine Joint Venture): If none of the fully foreign routes work for you (e.g., you’re not American, your business doesn’t qualify for BOI, and an FBL is not feasible), then a genuine partnership with a Thai investor is the remaining realistic solution. It’s not a “workaround” per se; it’s following the standard Thai-majority structure. But there are ways to structure a JV smartly: for example, split into multiple companies – one that’s Thai majority to handle restricted activities, and another that’s foreign majority for unrestricted activities. Some consulting firms do this: the Thai majority company does local service contracts, while a foreign-owned company (maybe registered as export or as consulting to overseas parent) might employ staff or handle offshore aspects. This can be complex and you’ll need good legal advice to ensure compliance and workable inter-company agreements.

• Professional Employer Organization (PEO) / Employer of Record: This is more about hiring than ownership. If your main concern is just getting a visa to be in Thailand or hiring a few employees without establishing a company, there are firms that will “host” your employment. Essentially, they hire you (or your team) under their Thai company and second you to work on your project. You pay them a fee for handling payroll, compliance, etc. Meanwhile, you might not have a legal entity at all. This can be a short-term solution for a freelancer or small team to operate without establishing a formal presence. The downside is you’re not building a corporate asset in Thailand and you rely heavily on the PEO’s integrity. Also you cannot easily scale or enter contracts since you have no company of your own locally. But for a single consultant who just needs a work permit, this can be an option. Thai-Co is not a PEO, but we could refer you to providers if this route interests you.

In summary, beyond the main structures (Thai company, FBL company, BOI company, Amity company, Rep Office, Branch), other “workarounds” are either not broadly applicable or not truly legal. Most serious foreign entrepreneurs will choose one of the main paths or a combination thereof. We always advise to plan with compliance in mind from the start – the money and time you think you save by skirting rules can evaporate quickly if your business gets into legal trouble.

Choosing the Right Structure for Your Business

With multiple options on the table, which structure should you choose for your Bangkok-based SME? The answer depends on your nationality, business type, scale, and long-term goals. Below are some common founder profiles and business scenarios with our recommendations:

• Solo Consultant or Freelance Service Provider: If you’re a one-person consulting or coaching business planning to serve clients in Thailand (e.g. business consulting, IT consulting, design services):

  • Americans: Use the Treaty of Amity route – set up a 100% US-owned Thai company. It gives you full ownership and you avoid FBL hassles. Be mindful you’ll need to hire some Thai support (e.g., an assistant, plus perhaps list a couple of Thai advisors to meet work permit ratio if needed). Alternatively, if you don’t want any local entity and can service clients from abroad, you might initially just do short-term trips on a Business Visa, but that’s not a stable or fully legal solution if you’re executing work here. An Amity company is the cleanest for Americans in services.

  • Non-Americans (no BOI qualification): If your service isn’t BOI-promotable (say it’s management consulting for local firms) and you don’t have an American partner, you likely need a Thai majority company with yourself as controlling minority. Perhaps partner with a trusted Thai colleague who can own 51%. You can retain control via being the sole director and using preference shares. Yes, you’ll only own 49%, but you can pay yourself a good salary and dividends can be minimized if you prefer (or issue non-voting shares to the Thai with fixed dividend, etc.). Ensure the Thai partner is truly trustworthy and contributing (to avoid nominee issues). Why not an FBL? Because a generic consulting FBL for one person is unlikely to be approved, and it’s a long process. What about Rep Office? Rep Office won’t work because you do want to bill clients (rep can’t earn income). If you purely consult for an overseas parent company, then rep office could be viable, but most freelancers want local customers.

  • Anyone (with sufficient means) – alternate idea: Consider the Thailand SMART Visa (Talent or Entrepreneur) if you qualify. For example, if you’re in tech or certain targeted industries, the SMART Visa “Talent” requires a high salary (100k THB/month) and a job in a tech company (you could potentially use your own Thai company once it’s BOI or certain incubators). SMART “Executive” requires a high background and working in a qualifying company. SMART “Startup” requires investing in a targeted industry startup. These can let you stay without 4 Thai employees. It’s outside the company setup discussion but worth noting as a visa-only workaround.

• Tech Startup or Software/SaaS Business: If you’re building a software application, IT consulting, or any tech-driven product (especially if targeting global markets):

  • BOI Promotion is usually the best fit. Apply for BOI under the “Software development” or relevant digital industry category. This allows 100% foreign ownership, zero corporate tax for some years, and no work permit quotas – perfect for focusing on building your product and team. You can start with a small team (even just you and one Thai developer initially) and scale up. Many foreign-run software houses and SaaS startups in Bangkok have leveraged BOI to great success.

  • Americans: You could either do BOI or Treaty of Amity. If your tech startup might not meet BOI criteria (though most do), the Amity company is a fallback. BOI is still superior if you plan to hire multiple foreigners or want the tax holiday (startups often don’t profit early on, but the work permit flexibility is gold). You can even do both: get BOI and you won’t need Amity anyway because BOI covers ownership.

  • Non-Americans: BOI is your friend if possible. If for some reason BOI doesn’t approve (say your “tech” is borderline or you don’t meet a criterion), you might have to do a Thai majority company initially. But try to tailor the business to fit BOI – perhaps emphasize R&D or software innovation. With the Thai government keen on digital economy, most genuine tech startups can get BOI approval. It’s worth the effort.

  • Tip: If you’re in early stages and not ready to incorporate, but you want to be based in Thailand, one co-founder could use a long-term tourist visa or Education visa (learn Thai language!) while planning, but working on a tourist/ED visa is technically not allowed. Better to incorporate and go BOI sooner so you can legally work on your startup.

• Import/Export Trading Business: Suppose you want to source products in Thailand to sell abroad, or import foreign goods to sell in Thailand (small-scale).

  • Export-Focused: Good news – if you will export Thai products or act as a buying office for overseas markets, you can do 100% foreign ownership without a license. Export trading is not restricted. You might still choose between a branch vs subsidiary:

    • If it’s mainly exporting Thai goods overseas, some companies just set up a Thai company (fully foreign, as export is allowed) and register for VAT (to get VAT refunds on export, since exports are zero-rated). Minimal capital THB 2M is needed as usual. This is straightforward. If you need an office to coordinate and some staff, it’s fine.

    • Alternatively, a Representative Office could work if you are literally just sourcing for a parent company – the rep office can find suppliers, do quality checks, and coordinate shipments for HQ. That HQ then purchases and sells – the rep doesn’t earn money here. If you don’t want to create a trading arm in Thailand and you already have an overseas company doing sales, rep office keeps things simple and tax-free for the Thai side. But if you want the Thai entity to handle purchase orders and be the exporter of record, then a normal company is better.

  • Import & Domestic Distribution: This is more challenging. Trading (wholesale/retail) in Thailand is FBA List 3 restricted if the foreign share > 49%. There is an exemption if you have very high capital: specifically, if a foreigner’s retail business has capital ≥ 100 million baht, or wholesale business capital ≥ 100 million with ≥ 20 million per shop, it’s allowed. Those figures are impractical for SMEs. So realistically:

    • Americans: Use Treaty of Amity – an American-owned company can engage in retail/wholesale (except trading Thai agricultural products like rice). That covers most import products (e.g. electronics, fashion, etc.). So an American-run trading firm can import goods and sell in Thailand legally through an Amity company, no FBL needed. This is a big advantage if you qualify. Do note, you might need various import licenses or product permits depending on goods (FDA for foods/cosmetics, etc.), but ownership-wise it’s fine.

    • Non-Americans: If you can’t put up huge capital, the workaround is often to have a Thai majority entity for local distribution. Many foreign importers form a Thai company with either a Thai partner or sometimes distributors themselves taking shares. If you can find a Thai distributor to partner with, that could be ideal – they hold 51%, you 49%, and they help with local market knowledge. If you want to retain control, structure it with you as managing director. Some foreigners also set up two companies: one fully foreign that acts as the importer of record (under an import/export category, which actually might still require FBL if you import for local sale – careful: importing for re-export is fine, importing for local sale falls under retail/wholesale). They then sell to a Thai-majority distribution company (maybe both companies are essentially under same owners, just different ownership splits). This is complex and you’d need good legal and tax advice to not double-tax yourself. In short, trading for non-Americans is tough without Thai ownership. If margins allow, sometimes foreigners just let a Thai distributor handle the import and sale, and they focus on sourcing/manufacturing elsewhere.

  • BOI Option: There is a BOI category for “International Trading Centers (ITC)” but it required annual export revenues and capital which may be high. And “Trade and Investment Support Office (TISO)” which allows service support. These might not suit a small trading outfit. Another is the “E-commerce” BOI category – if you plan to sell via an online platform, BOI has a category for e-commerce investment that could allow full foreign ownership of an e-commerce business (they want a certain investment and promotion of Thai products perhaps). If your trading is online-centric, explore BOI under digital trading platforms.

• Consulting/Professional Services Firm (Small Agency): e.g. marketing agency, design studio, recruitment firm, etc.

  • If American – go Amity route, as you can do service business fully owned.

  • If not American – unfortunately most professional services (unless highly specialized like engineering design, or part of ASEAN Mutual Recognition Arrangements for certain professionals) are restricted. If you have a trusted Thai colleague, Thai majority company is the safe route. If not, consider whether your service can be reframed to fit a BOI promotion (some creative services could fit “digital content” or “software” categories if, say, you do digital marketing with tech tools). If it’s plain consulting to Thai clients, you might need to bite the bullet and either partner with a Thai or hire a nominee risk (not advised). Another creative angle: if you primarily consult for foreign clients (even if you’re physically in Thailand), you could incorporate a foreign-owned company and argue you’re providing services to overseas, not competing locally. The FBA has a grey area here – services provided to overseas clients might not be considered “doing business in Thailand” in the FBA sense (some interpret “service business” in List 3 as services provided in Thailand to Thai people). This is not clearly delineated though. If, for instance, you’re a graphic designer in Bangkok serving U.S. clients online, you could just incorporate a Thai company 100% foreign and claim your service isn’t under FBA because your market is abroad. There isn’t an official exemption for export of services (unlike goods), but by not having Thai clients you reduce the risk of complaint. Many digital nomad types effectively do this informally. The safer version is to do a BOI “software” promotion or use the new Long Term Resident (LTR) visa for Digital Nomads (which Thailand introduced to let remote workers stay legally without a local sponsor). That might be a simpler solution than creating a company just for visa.

• Manufacturing or Industrial SME: If you plan to set up a small factory or production in Thailand:

  • Many manufacturing activities are completely open to 100% foreign ownership by default (FBA List 2 has some specific ones like firearms, historical artifacts, etc., but most manufacturing is not in Lists). So you can incorporate a fully foreign-owned company and go ahead. Just need the usual THB 2M capital (or more if you need more work permits).

  • However, consider applying for BOI anyway if your product or technology is in their promoted list (most manufacturing categories are in BOI’s lists). BOI can give you tax holidays and import duty exemptions on machinery – very helpful to reduce startup costs. Even small factories (if they meet value-add or innovation criteria) can get BOI. Also you might get permission to own land for the factory via BOI.

  • If you’re manufacturing primarily for export, you may also consider being in a Free Trade Zone or industrial estate for customs benefits.

  • If Americans – you could use Amity, but manufacturing was never restricted much anyway (except maybe things like mining). So Amity or not, you likely could be 100% foreign. But BOI would still be beneficial for incentives.

  • Be aware of other licenses: factory operations above certain horsepower or workforce require a Factory License from the Ministry of Industry, and environmental approvals if any.

• Having a Foreign Company and Just Needing Local Presence: If you already have a company at home and you just need a foothold in Thailand (to liaise with clients or oversee suppliers) and you do not intend to generate local revenue in Thailand, a Representative Office is a great choice. It keeps things simple, as described, and you can always upgrade to a subsidiary later. For example, a European software firm could open a rep office in Bangkok to support its ASEAN clients and do market research, employing one expat and one Thai. No tax, no Thai shareholder, minimal fuss. If later they decide to start selling directly in Thailand, they can set up a separate Thai company for that and keep the rep for liaison or close it.

Below is a comparison table summarizing key features of each structure for quick reference:

(Table Key: Min. Capital = typical required capital injection or registered capital; Work Permit Quota = Thai:Foreigner ratio for standard work permit unless exempt.)

Key Requirements and Considerations at a Glance

Regardless of structure, keep these general requirements in mind when planning your SME setup in Thailand:

• Minimum Shareholders: A Thai limited company (whether Thai-majority or foreign-majority) requires at least 3 shareholders at all times. (There was discussion of reducing to 2, but as of now it’s 3). This can be met by, say, the main investor holding e.g. 98%, and two other individuals (or corporate entities) holding 1% each. In many cases, people include a trusted friend or spouse as a token shareholder to satisfy this rule. Note: if you go with a Thai majority, at least one of those shareholders (with significant stake) should be Thai to reach 51%. If you use preference shares or voting weight to maintain control, ensure the share structure still issues at least some shares to 3 persons. For rep/branch, this is not relevant since they aren’t share-based entities (they’re extensions of one foreign company).

• Registered Capital: This is the amount of capital registered with authorities that the company will have. For fully or majority foreign companies, the law requires a minimum of THB 2 million registered capital (about USD $60k) for each business they engage in. If you do multiple FBL applications, perhaps more. Also, as noted, work permit sponsorship informally requires THB 2M paid-in capital per work permit for non-BOI companies. So THB 2M is a good baseline for most foreign SMEs to plan for. Thai majority companies can legally register less (even THB 100k), but if they plan to hire foreigners or just to appear credible, they often also go with at least THB 1–2M. Note that “registered capital” must be at least 25% paid in at founding (for a limited company), and the rest can be called in later. In practice, small companies just pay it all in at the start. For rep/branch, the “capital” is more an obligated fund from abroad (THB 2M for rep, 3M for branch minimum). Always ensure you have funds to inject as required – Thai authorities may ask for evidence of remittance of these funds from overseas into the company’s Thai bank account.

• Office Address: Every business entity in Thailand must have a local registered address. This can be rented office space, a commercial building, etc. For companies, the address will be on the registration documents and needs to be zoned for commercial use (generally). A home address can be used if it is the director’s residence and allowed for business (some districts allow certain home offices). If you don’t have a fixed office, many use a virtual office or serviced office that offers a legal address and mail handling. Thai-Co can assist clients to find a suitable registered address solution in Bangkok. Keep in mind certain licenses might require you to have a proper office (e.g., a trading company importing food needs a storage facility for FDA checks, etc.). Also, if you register for VAT, the Revenue Department might occasionally visit the address to ensure you exist there. So it should be a legit location where someone can be found.

• Licenses and Permits: Beyond the structure, consider industry-specific licenses. E.g., a restaurant needs food business permits and liquor license; a school needs MOE license; a financial consultancy might need SEC licensing depending on activities; a recruitment agency needs a recruitment license; and so forth. Foreign ownership can sometimes affect these (some licenses are only granted to Thai majority companies, like a tourism license for travel agencies historically required a Thai majority ownership – though that’s been eased recently for ASEAN companies). When planning your structure, also research the specific operational licenses you’ll need and see if they have any ownership or capital stipulations. If they do (like a construction contracting license might require Thai engineers, etc.), you may have to incorporate those into your decision (maybe you need a Thai partner to satisfy those separate from FBA issues).

• Banking: Opening a corporate bank account in Thailand is a must to operate. Generally, once your company (or branch/rep) is registered, you take the company affidavit, tax ID, seal, and director’s passport to a bank to open an account. Banks in Thailand often require the authorized director to be present in person for the initial opening (and if the director is foreign, sometimes they require a work permit or proof you’re in the process of getting one – though many allow opening during the setup phase). Choose a bank that is foreigner-friendly; Bangkok Bank, SCB, and Kasikorn are popular with SMEs. Some banks have better English online banking (Bangkok Bank has decent English interface; some banks only partially translate). No matter the structure, if the signatory on the account is foreign, expect to show your visa/work permit within a few months of opening, or they might restrict some services. If you open the account before you have a work permit (which is common, as you need an account to inject capital and start business), some banks give you a grace period to show the work permit later. Also, multi-currency accounts are available (useful for rep offices or export businesses dealing in USD, EUR, etc.). For rep offices, banks are used just to receive funds from HQ and pay local expenses; those transfers from HQ should be coded as “investment funds” or “office expense funds” to satisfy Bank of Thailand reporting.

• Taxes: All structures except rep offices will be subject to corporate income tax (20%) on profits earned in Thailand. If you benefit from BOI, you might have an exemption for X years (then 20% thereafter). A Thai company or branch must file annual audited financials and corporate tax returns. You’ll likely also register for VAT (7% value added tax) if your revenue will exceed 1.8 million THB/year, or if you deal with VAT-registered clients who need tax invoices. Rep offices don’t register VAT since they have no sales. One nuance: if you’re primarily exporting, exports are zero-rated for VAT (0%), but you still register to claim back VAT on your purchase inputs. If you’re doing services for overseas clients, those might be zero-rated VAT if the service is utilized abroad. Plan to hire an accountant to handle monthly filings (VAT, withholding tax, social security) – this is mandatory and not too costly (for a small company maybe $100-$200 a month for basic accounting service). Thai-Co can recommend accounting firms we work with.

• Hiring and HR: If you’ll have employees, note that Thai labor law applies the same regardless of structure. You’ll need to register for social security and contribute for each employee (5% of salary from employer, capped at 750 baht/month currently). If you have foreign employees, in addition to work permits, consider payroll tax and compliance for them too (foreigners are taxed on local income similarly). The 4:1 Thai-foreigner ratio (for non-BOI) means you’ll likely be hiring some Thai staff even if you wouldn’t otherwise, so think creatively how they can add value (maybe as admin, sales, trainee consultants, etc., rather than pure “deadweight” hires – you might find some great local talent to grow your business).

• Local Partner Dynamics: If you go with a Thai majority partner, have clear agreements on roles. While legal agreements can’t override corporate law, a well-drafted shareholders’ agreement can outline profit sharing, decision making, exit options, etc., which at least morally binds parties (and can be enforceable on certain contractual matters). Many foreigners also become signatory on the company bank account (you can set rules like two to sign, or you as sole signatory for spending up to X amount, etc.) to control finances, since as minority shareholder that’s one way to protect yourself. Also ensure that the Thai partner’s name and reputation are good – any legal trouble they get into could indirectly affect the company.

• Professional Advice: Starting an SME in a foreign country is complex; always consider consulting with a qualified legal advisor for initial setup, especially for reviewing contracts or special cases. Thai-Co facilitates this by working with vetted lawyers and consultants in its network, so you get proper legal review without hiring a big law firm full-time. We help coordinate the pieces (registration, BOI application, visa processing) so you can focus on your business.

• Time and Bureaucracy: Thai bureaucracy can be slow. Have patience and start early. For example, if you want to be operational by a certain date (to sign a lease or a client contract), work backwards: incorporate company (1-2 weeks), then if you need a license (add a few months), work permit (takes ~1 month after company if all conditions met), etc. It might take 3-6 months in some cases before you’re fully up and running with all paperwork. Plan interim solutions if needed (like enter on a temporary visa while setting up, etc.). Thai-Co can create a roadmap timeline for you once we know your chosen structure.

Finally, remember that compliance is an ongoing effort. After the initial setup, you must maintain your entity (file taxes, renew visas, keep Thai staff ratios, etc.). Falling out of compliance (like not paying taxes or letting required capital/investment conditions slide) can jeopardize your business status. But with the right structure, this overhead is manageable.

How Thai-Co Can Help

Thai-Co (the provider of this guide) is a specialized business services firm that assists foreign entrepreneurs and SMEs in navigating Thailand’s company setup and immigration processes. We are not a law firm, but we collaborate closely with experienced Thai lawyers, BOI consultants, and accountants to provide a one-stop, turnkey solution for establishing your business in Bangkok.

Our services include:

• Initial Consultation & Structuring Advice: We listen to your business plan and personal situation, then advise on the optimal structure (as we’ve outlined in this guide) – be it setting up a BOI company for your startup, registering under the Amity treaty, or arranging a Thai partnership. We’ll explain the pros/cons as they relate to you and answer all your questions.

• Company Formation: We handle all steps of company registration with the DBD – from name reservation, drafting the Articles of Association, registering the Memorandum, to obtaining the company tax ID. We ensure the paperwork reflects your chosen ownership structure accurately and legally.

• Foreign Business License / Treaty Certification: If you require a Foreign Business License, our legal partners will prepare the application, craft the necessary justifications in Thai, and liaise with the Ministry of Commerce. For Treaty of Amity, we manage the U.S. Embassy letter and DBD filing so your American-owned company gets its certificate swiftly. Similarly, for any FTA-related petitions (like TAFTA/JTEPA), we can coordinate those niche applications.

• BOI Promotion Assistance: BOI applications can be daunting – our BOI expert partners will help you prepare the project plan, submit the BOI application, and even accompany you to the BOI interview if needed. We then follow through with setting up the BOI company, obtaining the Foreign Business Certificate, and utilizing one-stop visa/work permit issuance.

• Work Permits & Visas: Through our immigration specialists, we handle the entire process of getting your Non-Immigrant Visas and Work Permits for you and your foreign staff. We will prepare all forms, coordinate the required Thai employee documentation, and accompany you to the labor department and immigration. Whether it’s the initial visa from a Thai embassy or extension of stay and re-entry permits in Bangkok, we’ve got it covered.

• Turnkey Packages: We know you have a business to run – so we offer turnkey packages where we take care of multi-step processes end-to-end. For example, our “BOI Tech Startup Package” would include BOI approval, company registration, bank account opening, initial visa/work permit for 1 founder, and basic accounting setup – all for a transparent fixed fee. Likewise, an “Amity Company Package” covers company setup and treaty registration. This way, you don’t have to juggle multiple service providers – Thai-Co project-manages the timeline for you.

• Post-Incorporation Support: Our role doesn’t end with handing over the company seal. We can assist with opening bank accounts (we’ll go to the bank with you to facilitate communication), registering for VAT or specific tax schemes (if needed), obtaining any industry-specific licenses by liaising with the appropriate government bodies, and even recruiting initial Thai staff if you need help. We also connect you to reliable accounting and payroll services and can coordinate with them to ensure your monthly filings are in order.

• Ongoing Compliance & Changes: Need to increase capital? Add a new foreign director? Change business address? We can handle corporate secretarial changes and updates with the DBD. If your business pivots and needs a different license or BOI category, we advise and assist on that transition too.

• Local Insights and Networking: Beyond paperwork, we provide practical business advice. For instance, if you’re a remote SaaS company, we might advise that you don’t actually need a Thai entity right away if revenue is entirely abroad – maybe hire initial developers through a PEO while exploring BOI. If you’re a small import-export firm, we might introduce you to a trusted Thai distributor to partner with, if that ends up being simpler. Our goal is not to push one solution, but to help your business succeed in Thailand in a compliant way. We also have a network of other professionals: intellectual property lawyers (for trademarks/patents), real estate agents (if you need office space), recruitment firms, and more, to support your wider needs as you establish yourself here.

Embarking on your Thailand business venture is undoubtedly complex, but with the right guidance, it is very achievable. Many foreign entrepreneurs have built thriving SMEs in Bangkok using the structures outlined – from boutique consultancies to tech startups, trading companies, and manufacturing firms. The key is to choose the structure that best aligns with your resources and plans. Ensure you remain on the right side of Thai law, and you will find Thailand to be an inviting and rewarding environment for your enterprise, with its vibrant market and strategic location in ASEAN.

Contact Thai-Co if you’d like personalized assistance in making your Bangkok business a reality. We take pride in helping entrepreneurs cut through red tape and start operations with confidence. With vetted legal and BOI partners by our side, we deliver end-to-end solutions – so you can focus on growing your business, while we handle the administrative groundwork.

We hope this guide has demystified the options and given you a clear roadmap. Welcome to doing business in Thailand – and we’re here to support you at every step of this exciting journey!