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Updated Minimum Capital Requirements for Foreign Companies in Thailand

To comply with various treaties and trade agreements and ease enforcement of regulations, the Ministry of Commerce has updated and consolidated regulations on minimum capital requirements for foreign-owned companies operating businesses in Thailand. The new Ministerial Regulation, which took effect on August 28, 2019, chiefly impacts foreign-owned companies operating under the privileges of bilateral and multilateral treaties and agreements,  such as the ASEAN Framework Agreement on Services and the U.S.-Thailand Treaty of Amity and Economic Relations. Regardless, all foreign-owned businesses should ensure they comply with the provisions set out by the new regulations in order to avoid facing fines.

The minimum capital requirements and deadlines outlined by the new regulation vary according to certain characteristics; namely, whether the foreign-owned company is a holder of a Foreign Business License (FBL) or Foreign Business Certificate (FBC), and whether it was established under privileges granted by treaties or trade agreements. The new regulation requires all foreign-owned companies established under treaties and agreements to bring in or remit the required minimum capital to Thailand by August 29, 2029. The minimum capital requirements and deadlines for foreign-owned companies not established under such conditions remain unchanged.

The following summary outlines the minimum capital requirements and deadlines for foreign legal entities operating businesses in Thailand:

A foreign-owned company that was established under a treaty or trade agreements and is not required to obtain a foreign business license (FBC or FBL) must:

✓   Have a minimum amount of capital no less than THB 2 million that is paid fully before commencing business operations.

✓   Bring in or remit the minimum required capital to Thailand before August 29, 2029.

A foreign-owned company that was established under a treaty or trade agreements and is required to obtain a foreign business license (FBC or FBL) must:

✓   Have a minimum amount of capital no less than THB 3 million—or 25% of its estimated operating expenses over three years, whichever is higher—that is paid fully before commencing business operations.

✓   Bring in or remit the minimum required capital to Thailand before August 29, 2029.

A foreign-owned company not registered in Thailand that is not required to obtain a foreign business license (FBC or FBL) must:

✓   Have a minimum amount of capital no less than THB 2 million that is paid fully before commencing business operations.

✓   Bring in or remit the minimum required capital to Thailand within three years from the commencement of business operations.

A foreign-owned company not registered in Thailand that is required to obtain a foreign business license (FBC or FBL) must:

✓   Have a minimum amount of capital no less than THB 3 million—or 25% of its estimated operating expenses over three years, whichever is higher—that is paid fully before commencing business operations.

✓   Bring in or remit the minimum required capital to Thailand within three years from the date on which their FBC or FBL is approved.

The regulation applies to all foreign-owned businesses, regardless of whether they are established before or after August 28, 2019. 

Furthermore, foreign legal entities are required to submit proof of their minimum capital remittance to the Department of Business Development within 15 days after the capital is brought into or remitted to Thailand.

The new regulation also states that foreign individuals and branch offices are permitted to bring in or remit their minimum capital in intervals, rather than making their full capital payment all at once. No less than 25% of the minimum capital must be brought in or remitted within three months, at least 50% of the minimum within one year, and thereafter at least 25% of the minimum capital per year. 

For further information about the new regulation, or any inquiries related to the operation of foreign-owned businesses in Thailand, please contact Mahanakorn Partners Group at info@mahanakornpartners.com

 

Minimum Capital and the Period to Bring in or Remit the Minimum Capital to Operate Businesses in Thailand

Promulgated on 28 August 2019, according to Section 14 and Section 46, Paragraph 1 of the Foreign Business Act, B.E. 1999

Article 1 Under Section 14, Paragraph 1, a foreign legal entity must have a minimum capital of THB 2 million to operate a business in Thailand.

Article 2 Under Section 14, Paragraph 2, the required minimum capital for foreign legal entities is 25% of the average annual estimated expenses for three years of operation. This amount must be no less than THB 3 million.

2.1   If the length of business operation is less than 3 years, the foreign legal entity will calculate average estimated expenses for the duration of business operations. The amount must be no less than THB 3 million.

2.2   Under Paragraph 1, the term “estimated expenses” designates the amount of money that the foreign legal entity will use in Thailand in order to acquire assets and to conduct business per annum. 

Article 3 Foreign legal entities not registered in Thailand must bring in or remit the minimum capital to operate a business in Thailand within 3 years from the date business commenced (Section 14, Paragraph 1), or 3 years from the date that permission was granted to conduct business (Section 14, Paragraph 2). At least 25% of the minimum capital must be brought in within three months, at least 50% of the minimum within one year, and thereafter at least 25% of the minimum capital per year. 

3.1   If the length of the foreign legal entity’s business operations is less than 3 years, the minimum capital must be brought in or remitted within 6 months from the date business commenced (Section 14, Paragraph 1), or 6 months from the date that permission was granted to conduct business (Section 14, Paragraph 2). 

Article 4 Foreign-owned businesses in Thailand that are established under privileges granted by treaties and trade agreements must bring in or remit the required minimum capital to Thailand by no later than August 29, 2029. 

Article 5 Foreign legal entities are required to submit proof of minimum capital remittance to the Department of Business Development within 15 days of it being brought into or remitted to Thailand.

Article 6 Foreign-owned businesses that are established under privileges granted by treaties and trade agreements, and are established before the date this regulation takes effect, are also required to bring in or remit the required minimum capital to Thailand by no later than August 29, 2029. 

Foreign Business License

U.S. Treaty of Amity Company Registration