Company Formation & Tax in Thailand

Thailand pairs a competitive 20% corporate tax and a VAT rate held at 7% with one structural feature every foreign investor must plan around: the Foreign Business Act, which restricts majority foreign ownership across most service sectors. The answer, for qualifying businesses, is BOI promotion — which unlocks 100% foreign ownership, corporate tax holidays of up to eight years and streamlined work permits, transforming the entry equation entirely.

The headline numbers

The SME tiers apply to companies with paid-up capital of THB 5 million or less and revenue up to THB 30 million. VAT registration becomes mandatory above THB 1.8 million of annual turnover; exports are zero-rated. The 7% VAT rate — in place since the late 1990s — has been extended again, currently through 30 September 2026.

The Foreign Business Act — and the ways around it

• Default position — foreigners cannot hold a majority in businesses on the FBA's restricted lists, which cover most services; manufacturing for export is generally unrestricted.
• BOI promotion — promoted projects (technology, manufacturing, regional headquarters, targeted industries) may be 100% foreign-owned, with CIT holidays of up to 8 years, import-duty exemptions and fast-tracked visas and work permits.
• Foreign Business Licence — case-by-case approval for restricted activities without promotion; slower and discretionary.
• US Treaty of Amity — American-majority companies can operate in most sectors on national-treatment terms.

Forming the company

The standard vehicle is the private limited company (Co., Ltd.), registered with the Department of Business Development — feasible within a week once documents are ready. Requirements: a minimum of two shareholders, at least one director, and a registered Thai address; there is no general statutory minimum capital, but foreign-owned companies typically need THB 2 million or more per foreign work permit, and FBA-relevant structures have their own capital floors. Annual obligations include audited financial statements (mandatory for all companies), the corporate tax return and half-year prepayment.

Frequently asked questions

Official sources

• Revenue Department — corporate tax and VAT
• Department of Business Development — registration
• Thailand Board of Investment (BOI)

This guide is general information prepared by ARM Management and is current as at July 2026. It is not legal or tax advice; FBA restrictions, BOI categories and the VAT extension are subject to change. Confirm against the Revenue Department, or with an advisor, before acting.