Starting a business in Thailand: structure, registrations and staff
TGS Innovised — De Voorwaarts
Updated: 30 September 2026
- In many sectors, foreigners may hold no more than 49% of a Thai company, unless through BOI promotion, a Foreign Business Licence or an unrestricted activity.
- Nominee shareholders are prohibited; since 2026, the Thai authorities have tightened checks on Thai shareholders and registered addresses.
- Every Thai company must have its financial statements audited and file monthly returns for payroll tax, withholding tax and VAT.
- Thai employees are entitled to a provincial minimum wage, social security (5% of wages up to THB 17,500) and statutory severance pay.
Thailand is an attractive location for many foreign businesses looking to set up manufacturing, sourcing or a regional office. Starting a business in Thailand can be done quickly, but from incorporation onwards Thai rules apply to ownership, bookkeeping, tax and staff. On key points, these differ from what you may be used to in the Netherlands or elsewhere in Europe. If you are not aware of them, you risk fines or an invalid structure. This article sets out the main obligations.
Step 1: choosing the right structure for your business in Thailand
Most foreign entrepreneurs opt for a Thai Limited Company, comparable to a Dutch BV (private limited company). The key question is who may hold the shares.
The 49% rule under the Foreign Business Act
The Thai Foreign Business Act restricts foreign ownership in many sectors, particularly services, to less than half; in practice, 49%. If you want to hold more than 49%, there are three legal routes:
- BOI promotion. For activities the Thai government wants to encourage, such as many types of manufacturing. This also brings tax incentives. See our article “Thailand BOI incentives: investing in Thailand with BOI promotion”.
- Foreign Business Licence. A licence from the Thai Ministry of Commerce. The outcome is not always predictable.
- An activity that is not on the restricted lists. Many manufacturing activities fall outside these lists.
Beware of nominee structures
Thai shareholders who hold shares on paper only (nominees) are prohibited. The Thai authorities are checking this ever more strictly. Since 1 August 2026, when a company is incorporated with a foreign minority shareholding or a foreign director, its Thai shareholders must provide a statement and bank statements covering the three months before payment to show that they genuinely pay for their shares themselves. The same check applies to later changes of directors. In addition, since 1 January 2026 the registered address has also been verified. As a result, incorporation now often takes three to four weeks rather than one to two.
Capital
A company with a foreign majority generally needs registered capital of at least THB 2 million. For activities under a Foreign Business Licence, the minimum is THB 3 million. If you want to hire foreign employees outside the BOI regime, a further THB 2 million of capital and four Thai employees are required per foreigner.
Step 2: registrations at the start
| Registration | When |
|---|---|
| Registration with the Department of Business Development | On incorporation; the company also receives its tax identification number |
| VAT | Mandatory once turnover exceeds THB 1.8 million per year |
| Social security (Social Security Office) | Within 30 days of hiring the first employee |
| Workmen’s Compensation Fund | At the same time as social security |
| Work permit and visa for foreign employees | Before they start work |
Step 3: annual obligations of a Thai company
- Bookkeeping in Thai, or with a Thai translation. Keep the records for at least five years.
- Audit. Unlike in the Netherlands, in principle every Thai company must have its financial statements audited, however small.
- Annual general meeting within four months of the financial year-end, and filing of the financial statements within one month after that.
- Corporate income tax. The rate is 20%. Small companies (paid-up capital up to THB 5 million and revenue up to THB 30 million) pay a lower rate on the first THB 3 million of profit: 0% up to THB 300,000 and 15% above that. The annual return (PND 50) must be filed within 150 days of the financial year-end. For the first half of the year, you pay a provisional tax (PND 51) within two months after the half-year ends. See the Thai Revenue Department’s explanation.
- VAT. The rate is 7%, a temporarily reduced rate (the statutory rate is 10%) that has been extended until 30 September 2027. VAT returns are filed monthly.
- Withholding tax. Every month, you report and pay over the payroll tax withheld and the withholding tax on services.
Step 4: hiring staff in Thailand
Thailand has its own employment law, laid down in the Labour Protection Act. The main rules:
Employment contract and probation
A written contract is not mandatory, but strongly recommended. Probation is not regulated by law. In practice, employers use a maximum of 119 days, because an employee becomes entitled to severance pay after 120 days.
Minimum wage
The minimum wage is a daily wage and varies by province: from THB 337 to THB 400 per day. These rates have applied since 1 July 2025. The highest rate of THB 400 applies in Bangkok, the industrial areas around Chonburi, Rayong and Chachoengsao, and on Phuket and Koh Samui, among others. As at the end of September 2026, no new increase had been set.
Working hours
A maximum of 8 hours per day and 48 hours per week; for hazardous work, 7 hours per day and 42 hours per week. Overtime is paid at no less than 1.5 times the hourly wage.
Leave
| Type of leave | Minimum |
|---|---|
| Public holidays | 13 per year |
| Annual leave | 6 working days per year, after one year of service |
| Sick leave | 30 days per year on full pay |
| Maternity leave | 120 days, of which 60 are paid by the employer (since 7 December 2025) |
| Paternity leave | 15 days on full pay (since 7 December 2025) |
| Personal leave | 3 days per year on full pay |
Social security
Employer and employee each contribute 5% of wages, on a maximum of THB 17,500 per month (from 2026 to 2028). That is a maximum of THB 875 per month per person. From 2029, the ceiling rises to THB 20,000. Contributions are due by the 15th of the following month. In addition, the employer alone pays a contribution to the Workmen’s Compensation Fund. A pension scheme (provident fund) is not mandatory, but many employers offer one.
Payroll tax
The employer withholds personal income tax every month (progressive, 0% to 35%) and pays it over by the 7th of the following month (the 15th for electronic filing).
Additional obligations from 10 employees
- Draw up work rules in Thai, announce them within 15 days of hiring your tenth employee, and display them visibly.
- Every January, submit a report on employment and working conditions to the Department of Labour Protection and Welfare (new since 7 December 2025).
- Keep an employee register.
With 50 or more employees, you must also set up a welfare committee. Depending on the sector and size, requirements for a safety officer may also apply.
Severance pay in Thailand
On termination, an employee is entitled to statutory severance pay that increases with length of service:
| Length of service | Severance pay |
|---|---|
| 120 days to 1 year | 30 days’ wages |
| 1 to 3 years | 90 days’ wages |
| 3 to 6 years | 180 days’ wages |
| 6 to 10 years | 240 days’ wages |
| 10 to 20 years | 300 days’ wages |
| 20 years or more | 400 days’ wages |
In addition, a notice period of one pay period generally applies. Severance pay is forfeited only in cases of serious misconduct, such as dishonesty, gross negligence or repeated misconduct after a written warning. Take these costs into account when building up reserves.
Privacy
Thailand has its own privacy law, the Personal Data Protection Act (PDPA), comparable to the EU GDPR. It also applies to employee data.
Foreign employees in Thailand
Do you want a Dutch national or another foreigner to work in Thailand? Then a Non-Immigrant B visa and a work permit are required before they start. Without BOI status, the requirements of THB 2 million of capital and four Thai employees per foreigner apply. Employing someone without a work permit can cost the employer a fine of THB 10,000 to THB 100,000 per employee, and more for repeat offences. Our article “Posting an employee to a Thai BOI factory: local employment or secondment?” explains the choice between hiring locally and seconding staff from the Netherlands.
Checklist: starting a business and hiring staff in Thailand
- Choose the structure and check whether your activity falls under the restrictions of the Foreign Business Act.
- Do not use nominees. Make sure Thai shareholders have a genuine interest and can prove it with bank statements.
- Pay in sufficient capital, also with a view to work permits.
- Arrange the registrations: tax ID, VAT, social security and the Workmen’s Compensation Fund.
- Draw up employment contracts with a probation period of no more than 119 days.
- Draw up work rules in Thai as soon as you have ten employees.
- Plan the monthly returns for payroll tax, withholding tax, social security and VAT.
- Have the financial statements audited and file the corporate income tax return on time.
- Set aside reserves for severance pay, which can be substantial after long service.
Our tip
Start with the structure and the shareholders, and only then deal with the rest. An incorrect ownership structure is difficult to repair later and can invalidate the entire business. Consider the home-country side straight away as well: how will you hold the Thai company, how will profits flow back to the Netherlands, and are the prices between the two companies at arm’s length?
Frequently asked questions about starting a business in Thailand
Can a foreigner own 100% of a business in Thailand?
How much capital do I need to start a business in Thailand?
How much severance pay do employees in Thailand receive?
Starting a business in Thailand?
Contact our international tax specialists. Together with our partners in Thailand, we guide you from incorporation to the first payroll.