10 Major Problems of Company Formation in Thailand

Thailand is the second largest economy in Southeast Asia. Hence, numerous big and small businesses are being pulled by this market. Every day, new companies are established here. But in the process of formation of a company in a country like Thailand with strict rules and regulations, numerous aspects cause hindrances:
1. In the beginning, the foreign company will be registered as a Limited Thai company as per Thai government rules. So the company essentially becomes a Thai company.
2. Three unique company names need to be chosen of which only one will be finalized depending on its availability. Getting the company name approved is another lengthy process.
3. Memorandum of Association needs to be filed with Commercial Registration Department once the company name gets approved.
4. If the company does not involve any kind of import and export, then the rule says that 51% of the shares must be owned by Thai nationals. Also, it is mandatory for the company to have 3 Shareholder or Promoters.
5. Another problem with establishing business is that for work permit, the company must have a paid-up Registered Capital of At least 2million Baht. The company also requires employing at least four Thai employees.
6. A very important aspect of forming a company in Thailand is to get hold of a registered office space. It is quite a difficult job to find a suitable office space in Thailand as most of the time difficult to find the right place for the business.
7. If the company involves any kind of import and export, it must have Import/Export Licenses. But in order to establish it in Thailand, the company may require additional licenses or permits.
8. The company needs to have a Trademark. These Trademarks cannot be duplicated. One also has to be very cautious about the content of the Trademark. Rules regarding Trademark in Thailand are very rigid. Hence, the content must not be prohibited by Thailand Trademark Act.
9. If the parent company is situated outside Thailand, an accounting report format is essential that must be approved by the parent company.
10. Last but a very crucial problem is the language barrier. Not everyone in Thailand can converse in English. To add to that, every official document in Thailand is typed in Thai script. Hence, a communication gap prevails.
