🇹🇭 Annual Compliance — Thailand

Using nominee Thai shareholders to circumvent the Foreign Business Act

Fix: This is illegal and can result in criminal penalties including imprisonment and fines up to THB 1 million. Instead, explore legitimate pathways: apply for BOI promotion (which grants 100% foreign ownership in promoted activities), obtain a Foreign Business License, or if you are a US citizen, leverage the Treaty of Amity. Consult a Thai law firm before structuring ownership.

Underestimating the capital and staffing requirements for work permits

Fix: Each foreign work permit requires THB 2 million in registered capital and four Thai employees. A company with three foreign workers needs THB 6 million in capital and 12 Thai staff. Plan your workforce and capitalization accordingly before applying. Some BOI-promoted companies and SMART Visa holders are exempt from these ratios.

Failing to register for VAT when required

Fix: VAT registration is mandatory once annual revenue exceeds THB 1.8 million. Late registration results in penalties and back-dated VAT liabilities. Register proactively when you anticipate exceeding the threshold. The current effective VAT rate is 7%.

Not exploring BOI promotion before incorporating

Fix: The Board of Investment offers substantial benefits — corporate tax exemptions for up to 13 years, 100% foreign ownership, land ownership rights, and work permit facilitation. BOI applications should be submitted before or shortly after incorporation. Many foreign entrepreneurs incorporate first and discover BOI benefits too late. Consult a BOI advisor during the planning stage.