Foreign investors who want to establish their business presence on the Thai market as soon as possible can opt for a shelf company, which is a ready-made business that has already been incorporated and it is available for sale. The main advantage of a shelf company is that the investor can start his or her business operations in a short period of time (1 or 2 days) after the purchase of the company; our lawyers in Thailand can provide assistance during the purchase process to both local and foreign entrepreneurs.
A separate division of our team, our immigration lawyers in Thailand, can give you details about opening shelf companies in the country as a foreign national.
Thai ready-made companies
The process of buying a shelf company is rather simple and its main advantage is that it does not represent a time-consuming process, as it is the case for the incorporation of a new company. The company formation process can last from a few days to a few weeks; for example in Indonesia the process of company incorporation may take two weeks.
The shelf company has already been incorporated and the buyer is required to perform only a few steps after the purchase and the transfer of ownership; our Thai attorneys can provide assistance for the stages following the purchase.
As a general rule, shelf companies in Thailand are incorporated by professionals related to the legal field, such as law firms or accounting firms. The process of buying refers to the completion of several documents on the transfer of ownership or transfer of directorate.
After the investor purchased the shelf company, he or she is allowed to perform significant changes in the company, such as:
- change the name of the company;
- establish a new business address;
- set out new business objectives;
- appointing new directors.
Our law firm in Thailand can offer more information on the requirements imposed on shelf companies in this country.
We can also give you details about immigration to Thailand.
Requisites when buying a shelf company in Thailand
Even if the procedure of purchasing a Thai shelf company is simple and does not imply any special preparation on behalf of the buyer, there a few aspects which need to be considered, among which:
- having a valid travel document, such as a passport when traveling to Thailand for completing the procedure;
- preparing the documents requested by the seller in relation to the acquisition of the business;
- a meeting with the seller is always advised in order to agree on the terms of the agreement;
- the sale-purchase agreement must be signed before a public notary in Thailand who must also acknowledge the procedure;
- make the necessary changes to the shelf company with the Trade Register in Thailand.
With respect to the changes which will be made, it is important to know that specific documents and forms must be filed with the Thai Companies Register. Additionally, the Thai shelf company’s Articles of Association must be amended. The company’s official documents and seal must also be changed and, if required, other authorities such as the tax office must be notified. The shelf company can also obtain new tax and VAT numbers, however, these procedures are seldom completed.
Our lawyers in Thailand can guide foreign investors who want to buy shelf companies with the procedures to be completed right after the purchase.
Requirements for Thai shelf companies
After the shelf company has been transferred to the new owner, the investor is required to register for value added tax and social security. The company has the legal right to perform the same activities as any other company.
Directors of a Thai shelf company can perform a number of activities if they are foreign citizens without a work permit; most of them refer to:
- participating in a meeting;
- participating at the meeting of the Board of Directors;
- attend to technical and special seminars;
- negotiate on a business matter.
Our lawyers in Thailand can provide you with detailed information on the compliance requirements when opening a shelf company.
We will also give you information about immigration to Thailand for the directors of a shelf company.
Licenses when opening a shelf company in Thailand
One of the important procedures which need to be completed when setting up operations in Thailand through a shelf company is related to obtaining the necessary license for operating. Ready-made companies do not have licenses, which is why this process is a separate one.
When seeking to acquire the necessary licenses for any type of company, including shelf companies, there are specific documents which need to be completed. Specifically, for Thai shelf companies is the fact that all the documents must be prepared by the new owner who must also appear as the legal beneficiary of the company.
There are various types of licenses which can be obtained by shelf companies in Thailand, apart from the business license issued by the Business Registry.
A shelf company can be used in any of the following industries which require specific licenses:
- the financial sector;
- the insurance industry;
- the telecommunications industry;
- the wholesale sector;
- the FMCG industry;
Each industry is represented by a specific authority and implies filing specific documents when obtaining a special permit. Also, the activities of Thai shelf companies are not restricted to the industries mentioned above.
If you have an interest in a particular domain, our attorneys in Thailand can offer the necessary consultancy in operating in that sector through a new or shelf company.
Costs of opening a shelf company in Thailand
One of the most important issues when opening a company in Thailand is related to business start-up costs. These usually depend on the chosen business form, however, in the case of Thai ready-made companies, the costs will imply the following:
- the actual cost of the company (it depends on the age of the business – the older the company, the higher the cost);
- the notary fee which must be paid when drafting and notarizing the sale-purchase agreement;
- the fee for amending the company’s Articles of Association and other documents which need to be filed with the Trade Register;
- the fees for making company changes with the Business Register in Thailand (they depend on the changes to be made);
- the use of additional services, such as nominee services for the company director of the shelf company;
- the licensing fees which depend on the Thai industry the shelf company will operate in.
It should be noted that in some cases the costs of buying a ready-made company can be higher than those of registering a new company in Thailand.
If you decide to buy a shelf company, you can use nominee services which can be provided by our Thai attorneys.
Why buy a shelf company in Thailand?
Many foreign entrepreneurs wonder if the shelf company is the best choice when starting a business in Thailand and from many points of view, it can be. The first thing to consider is that it is already registered, all the formalities related to company registration will be taken care of. The licensing procedure will be left to the new owner, however.
The shelf company can also be a good choice for those interested in accessing a loan with a Thai bank as it can offer the history necessary to be granted loans. Speaking of history, the Thai shelf company can be used to integrate the background of foreign business and thus increase market visibility and consumer confidence.
What to choose between a shelf and a new company
Investors, especially foreign ones, are usually interested in the fastest way to open a company in Thailand. In the process, they consider that buying a read-made one is faster. While it comes with a few advantages, the only real benefit is that the enterprise is registered. Other than that, the new owner will need to make various amendments, just like in the case of a new business.
It can be said that opening a new Thai company takes longer from an incorporation point of view, however, there are specific solutions that can be employed now, leaving the owner time to make other arrangements.
For example, our Thai lawyers can set up the company on your behalf based on a power of attorney. You will only be required to come to the country and sign the necessary documents for an appointment to open a bank account.
The main issues related to buying an aged company compared to opening a new one
When making business decisions, it is good to consider what the best option is and also take into account a shelf company. However, it will need a lot of attention after the purchase is completed. For example, you will need to make a lot of adjustments until you reach the final phase of the business entity you really want. Among these:
- appoint new directors;
- modify the address of the registered office;
- rename it.
From this perspective, the procedure resembles that of opening a new company in Thailand. So, why not go for a new enterprise from the beginning? Apart from that, a ready-made business can be older and needs to be verified before purchase.
Our lawyers in Thailand can offer more information on the reasons why you should opt for a new company instead of an old one. They are also at your service should you decide on immigration to Thailand when starting a business here.
Why open a company in Thailand from scratch?
Nowadays, setting up a new Thai company makes more sense from several motives, among which:
- some registration fees have been reduced or abolished;
- the procedure is much speeder, as it can be registered online, so no more going around to the authorities;
- there are one-step procedures for operations like tax and VAT registration.
In the case of the shelf entity, making all the amendments presented earlier will be more expensive and take longer than simply opening a new business in Thailand. Additionally, a shelf company does not have tailored Articles of Association, so you will need to make changes to these documents. This stage alone will trigger additional costs, which are usually higher than having the statutory papers drafted. A ready-made company is only useful if you need to save time.
Our immigration lawyers in Thailand can also explain the procedure associated with obtaining residency through the creation of a company.
Support in opening a company in Thailand
If you are in a hurry and do not know where to start, our attorneys in Thailand can assist with the following:
- a quick presentation of the legal forms available in Thailand and their features;
- documentation drafting;
- Trade Register incorporation without you having to travel here;
- tax and VAT registration from the beginning;
- employer registration (which is never available with a shelf company).
Additionally, we can also assist if you want to obtain residency in Thailand.
According to recent statistics, Thailand:
- investment license applications rose by 22% in the first 9 months of 2023;
- their total value for this period was USD 14.6 billion;
- on a yearly basis, their value was 43% higher compared to 2022;
- the most appealing industries were electronics, automotive, and food.
If you need further information on the shelf companies in Thailand, please contact our team of Thai lawyers for assistance on this matter.
Our immigration lawyers in Thailand can assist foreign investors who wish to come to the country for business purposes.