Thinking about starting a business on Koh Phangan or Koh Samui? Thai corporate law has a few rules that surprise many foreign entrepreneurs — and understanding the basics early can save you from costly mistakes later.
Foreign Ownership Restrictions
Under the Foreign Business Act, most business activities are restricted or limited for foreign ownership. In general, foreigners can hold up to 49% of shares in many types of Thai companies, with Thai nationals holding the majority. Some structures and licenses allow higher foreign ownership, but they come with their own conditions.
Choosing a Business Structure
Foreign entrepreneurs typically set up as a Thai Limited Company, the most common and flexible structure. Other options exist — such as branch offices, representative offices, or BOI-promoted companies — but each comes with different rules on ownership, activities, and tax treatment.
Registered Capital Matters
The amount of registered capital your company holds isn’t just a formality — it affects your ability to sponsor foreign work permits, apply for certain licenses, and meet minimum requirements tied to your business activity.
Nominee Structures Are a Legal Risk
Using Thai nominee shareholders to get around foreign ownership rules is illegal and actively enforced. Authorities have increased scrutiny of nominee arrangements in tourist areas, and the consequences can include company dissolution and personal liability.
Licensing and Local Regulations
Certain businesses — tourism operations, food and beverage, construction, and more — require specific licenses beyond basic company registration. Island-based businesses in particular often overlook local permits tied to zoning, land use, or environmental regulations.
Ongoing Compliance
Running a company in Thailand comes with ongoing obligations: annual financial statements, tax filings, and shareholder meetings, among others. Missing these isn’t just a paperwork issue — it can affect your company’s standing and your own visa or work permit status.
There’s More to Consider
This covers just the basics. Depending on your industry, ownership structure, and long-term plans, there are often additional rules, exceptions, and strategic options worth exploring — things that are hard to cover in general terms because they depend on your specific situation.
If you’re planning to start or restructure a business on Koh Phangan or Koh Samui, our corporate lawyers can walk you through what applies to your case and help you set things up correctly from the start. Contact us for a consultation.
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