Registered capital is the total financial responsibility of the shareholders to the company. Investment may be made with either cash or non-cash assets. Note that non-cash assets need to properly appraised. Each shareholder must pay into the company a minimum of 25% of the par value of their shares.
This amount is commonly referred to as the company’s ‘paid up’ registered capital. It is important to note that, despite the fact each shareholder is only required to pay in 25% of the shares’ par value upon registration, the potential liability of the shareholder with regard to the companies activities remains 100% of the shares’ par value. This means the shareholder, at some future date, could potentially be required by a court to pay into the company the remaining 75% if the company had to comply with the judgment of a lawsuit.
What is the Minimum Capital Required to set up a Company Limited?
Generally speaking there is no minimum registered capital requirement to set up a Company Limited.
There are, however, some important exceptions:
- If a company is classified as a ‘foreign company’ under the Foreign Business Act, different minimum capital requirements may apply
- If a company intends to employ foreigners, other minimum capital requirements may also apply
How is a company defined as a foreign company?
Under the provisions of the Foreign Business Act, a company is defined as foreign if it is registered under the laws of:
- Thailand and 50% or more of its shares are held by non-Thai nationals. This includes both individuals and business entities (juristic persons)
- Another country, the definition of which includes all branch representative offices and regional offices of overseas offices operating in Thailand
What are the Minimum Registered Capital Requirements for a Foreign Company?
Two different rules apply here:
- If the company engages in activities specified in the Foreign Business Act, its minimum registered capital is 25% of the company’s average per year expenses for its first three years of operation or 3 million baht, whichever is the greater.
- If the company does not engage in activities specified in the Foreign Business Act, its minimum registered capital would need to be 2 million baht.
Note: these figures refer to ‘fully paid up’ capital (100%), rather than ‘paid up’ capital (25%).
What are the Minimum Registered Capital Requirements for a Company that intends to employ Foreigners?
The minimum registered capital requirement for a company that intends to obtain work permits for foreign staff is 2 million baht for a single foreign employee. If the company requires further foreign staff, an additional 2 million baht is required for each employee. The law normally limits companies to a maximum of ten foreign staff (certain exceptions do apply to this rule).
It’s important to note however, that if the following conditions are met, minimum investment requirements are reduced by 50%:
- The employee is married to a Thai national
- the marriage is registered in Thailand
- the couple lives together