Open a Shelf Company in Thailand
Foreign investors who want to establish their business presence on the Thai market as soon as possible can opt for a shelf company, which is a ready-made business that has already been incorporated and it is available for sale. The main advantage of a shelf company is that the investor can start his or her business operations in a short period of time (1 or 2 days) after the purchase of the company; our Thai lawyers can provide assistance during the purchase process to both local and foreign entrepreneurs.
Thai ready-made companies
The process of buying a shelf company is rather simple and its main advantage is that it does not represent a time-consuming process, as it is the case for the incorporation of a new company. The shelf company has already been incorporated and the buyer is required to perform only a few steps after the purchase and the transfer of ownership; our Thai attorneys can provide assistance for the stages following the purchase.
As a general rule, shelf companies in Thailand are incorporated by professionals related to the legal field, such as law firms or accounting firms. The process of buying refers to the completion of several documents on the transfer of ownership or transfer of directorate.
After the investor purchased the shelf company, he or she is allowed to perform significant changes in the company, such as:
- change the name of the company;
- establish a new business address;
- set out new business objectives;
- appointing new directors.
Our law firm in Thailand can offer more information on the requirements imposed on shelf companies in this country.
Requisites when buying a shelf company in Thailand
Even if the procedure of purchasing a Thai shelf company is simple and does not imply any special preparation on behalf of the buyer, there a few aspects which need to be considered, among which:
- having a valid travel document, such as a passport when traveling to Thailand for completing the procedure;
- preparing the documents requested by the seller in relation to the acquisition of the business;
- a meeting with the seller is always advised in order to agree on the terms of the agreement;
- the sale-purchase agreement must be signed before a public notary in Thailand who must also acknowledge the procedure;
- make the necessary changes to the shelf company with the Trade Register in Thailand.
With respect to the changes which will be made, it is important to know that specific documents and forms must be filed with the Thai Companies Register. Additionally, the Thai shelf company’s Articles of Association must be amended. The company’s official documents and seal must also be changed and, if required, other authorities such as the tax office must be notified. The shelf company can also obtain new tax and VAT numbers, however, these procedures are seldom completed.
Our lawyers in Thailand can guide foreign investors who want to buy shelf companies with the procedures to be completed right after the purchase.
Requirements for Thai shelf companies
After the shelf company has been transferred to the new owner, the investor is required to register for value added tax and social security. The company has the legal right to perform the same activities as any other company.
Directors of a Thai shelf company can perform a number of activities if they are foreign citizens without a work permit; most of them refer to:
- participating in a meeting;
- participating at the meeting of the Board of Directors;
- attend to technical and special seminars;
- negotiate on a business matter.
Our Thai attorneys can provide you with detailed information on the compliance requirements when opening a shelf company.
Licenses when opening a shelf company in Thailand
One of the important procedures which need to be completed when setting up operations in Thailand through a shelf company is related to obtaining the necessary license for operating. Ready-made companies do not have licenses, which is why this process is a separate one.
When seeking to acquire the necessary licenses for any type of company, including shelf companies, there are specific documents which need to be completed. Specifically, for Thai shelf companies is the fact that all the documents must be prepared by the new owner who must also appear as the legal beneficiary of the company.
There are various types of licenses which can be obtained by shelf companies in Thailand, apart from the business license issued by the Business Registry.
A shelf company can be used in any of the following industries which require specific licenses:
- the financial sector;
- the insurance industry;
- the telecommunications industry;
- the wholesale sector;
- the FMCG industry;
Each industry is represented by a specific authority and implies filing specific documents when obtaining a special permit. Also, the activities of Thai shelf companies are not restricted to the industries mentioned above.
If you have an interest in a particular domain, our attorneys in Thailand can offer the necessary consultancy in operating in that sector through a new or shelf company.
Costs of opening a shelf company in Thailand
One of the most important issues when opening a company in Thailand is related to business start-up costs. These usually depend on the chosen business form, however, in the case of Thai ready-made companies, the costs will imply the following:
- the actual cost of the company (it depends on the age of the business – the older the company, the higher the cost);
- the notary fee which must be paid when drafting and notarizing the sale-purchase agreement;
- the fee for amending the company’s Articles of Association and other documents which need to be filed with the Trade Register;
- the fees for making company changes with the Business Register in Thailand (they depend on the changes to be made);
- the use of additional services, such as nominee services for the company director of the shelf company;
- the licensing fees which depend on the Thai industry the shelf company will operate in.
It should be noted that in some cases the costs of buying a ready-made company can be higher than those of registering a new company in Thailand.
If you decide to buy a shelf company, you can use nominee services which can be provided by our Thai attorneys.
Why buy a shelf company in Thailand?
Many foreign entrepreneurs wonder if the shelf company is the best choice when starting a business in Thailand and from many points of view, it can be. The first thing to consider is that it is already registered, all the formalities related to company registration will be taken care of. The licensing procedure will be left to the new owner, however.
The shelf company can also be a good choice for those interested in accessing a loan with a Thai bank as it can offer the history necessary to be granted loans. Speaking of history, the Thai shelf company can be used to integrate the background of foreign business and thus increase market visibility and consumer confidence.
According to recent statistics, Thailand:
- is one of the most appealing destinations for foreign direct investment in the region, according to a survey of the 2018 World Investment Report;
- between 2016 and 2017, foreign investments in Thailand grew up to 7.6 billion USD;
- in 2017, foreign direct investments in Thailand accounted for 50% of its Gross Domestic Product;
- the industries attracting more than 70% of the total FDI were manufacturing and finances.
If you need further information on the shelf companies in Thailand, please contact our team of Thai lawyers for assistance on this matter.