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Thailand

We can help you incorporate in Thailand

Private company limited by shares

Thailand stands as the second-largest economy within the Association of Southeast Asian Nations (ASEAN), occupying a central geographic and strategic position in Southeast Asia. Its role as a gateway to the region offers foreign investors and multinational enterprises access to one of the world’s most dynamic and expanding markets. With a population exceeding 70 million and strong connections to key Asian economies, Thailand has developed a diversified industrial base and a business environment that continues to attract international interest.

Thailand’s economy is characterised by a blend of agriculture, manufacturing, and services, with significant contributions from the export sector. The country is a major global hub for the automotive and electronics industries, with numerous international manufacturers operating production facilities in the Eastern Economic Corridor and other industrial zones.

The services sector, including tourism, finance, and telecommunications, also plays a vital role in the national economy. Although the country experienced disruptions during the COVID-19 pandemic, Thailand’s economy has demonstrated resilience, supported by strong fundamentals and a proactive fiscal and monetary policy approach.

Thailand is party to a number of bilateral and multilateral trade agreements, which enhance its appeal as a base for regional operations. Among these are Free Trade Agreements (FTAs) with countries such as China, Japan, South Korea, India, Australia, and New Zealand. These agreements help to reduce tariffs and improve market access for goods and services, facilitating cross-border trade and supply chain integration.

In addition to its bilateral agreements, Thailand is a founding member of ASEAN and a participant in the ASEAN Free Trade Area (AFTA) and the Regional Comprehensive Economic Partnership (RCEP), which collectively deepen its economic integration with major economies in the Asia-Pacific region.

Thailand has invested heavily in infrastructure development, resulting in a well-developed transportation and logistics network. The country is served by seven international airports, including Suvarnabhumi and Don Mueang in Bangkok, which provide direct air connectivity to regional and global destinations.

Its road network is extensive and well-maintained, supporting domestic logistics and the movement of goods. The country also operates six deep-sea ports and two international river ports, which play a central role in facilitating maritime trade. Urban mass transit systems, particularly in Bangkok, are undergoing continuous expansion, improving mobility and urban connectivity.

Relative to other Asian commercial centres such as Singapore, Hong Kong, or Shanghai, Thailand offers comparatively lower business operating costs. This includes lower average rental prices for commercial office space in Bangkok, as well as moderate utility expenses. Labour costs are also generally competitive, with a skilled and educated workforce available across various sectors.

Thailand’s financial sector is well-regulated and resilient, with a stable banking system overseen by the Bank of Thailand. Access to financing, banking services, and digital payment infrastructure is readily available for both local and foreign-owned enterprises.

Additionally, Thailand ranks favourably on global indices for business freedom and economic openness. Nevertheless, investors must navigate certain regulatory complexities, particularly in areas concerning foreign ownership and sectoral restrictions.

One of the primary legal considerations for foreign investors involves restrictions on foreign shareholding in Thai companies. In most sectors, foreign ownership is capped at 49% under the Foreign Business Act (FBA), categorising majority foreign-owned entities as “foreign businesses” subject to licensing requirements.

However, exceptions to this rule are available. Foreign companies can apply for a Foreign Business License (FBL), which allows them to exceed the 49% ownership threshold. Approval is typically contingent upon several criteria, including whether the proposed business contributes to the Thai economy in terms of technology transfer, employment, or the development of local industries. A minimum capital investment of THB 3 million and ongoing compliance with regulatory obligations (e.g., periodic reporting) are often required.

Where full ownership is not possible or practical, it is common for foreign investors to structure their participation using preference shares and shareholder agreements that afford them control over corporate governance, profit distribution, and operational decision-making. These mechanisms, while legally permissible, should be carefully structured to avoid contravening Thai law, particularly anti-nominee provisions.

Thailand maintains a bilateral agreement with the United States known as the Treaty of Amity and Economic Relations (1966), which offers special privileges to American nationals and U.S.-owned companies. Under the treaty, qualified U.S. entities are allowed to hold a majority—or even 100%—of the equity in Thai companies, without the need to obtain a Foreign Business License. However, this benefit is limited to activities not listed under restricted sectors, such as land ownership, certain types of transport, and communications.

To qualify, the company must undergo a certification process with both the Thai and U.S. authorities. While the treaty provides a unique route to majority foreign ownership, companies must remain compliant with all other applicable laws and regulations in Thailand.

Foreign investors seeking to enter the Thai market must weigh a combination of strategic, legal, and operational factors. Corporate structure, tax residency, capital requirements, and employment of foreign nationals all require careful planning. Thailand’s Board of Investment (BOI) offers investment promotion schemes in select industries—such as high-tech manufacturing, digital services, and sustainable development—that can include tax incentives and foreign ownership privileges, subject to compliance with program conditions.

Thailand remains a key destination for international business activity in Southeast Asia, combining a large domestic market with robust infrastructure, strategic trade linkages, and industrial diversity. While foreign investment is subject to certain legal constraints, particularly in terms of ownership, the availability of exceptions and alternative structuring options allows for a high degree of flexibility. Investors considering entry into the Thai market should ensure comprehensive legal and regulatory due diligence to align their business structure with both local laws and international obligations.

Taxes

Tax residency – A company is tax resident in Thailand if it is incorporated under the law of Thailand and registered in the Ministry of Commerce.

Basis – Resident companies are subject to tax on their worldwide income. Nonresident companies pay taxes on their income derived from Thailand.

Tax rate – Corporate income tax standard rate is 20%.

SMEs with paid-in capital equal or lower than THB 5,000,000 and trading income not higher than THB 30,000,000 are subject to reduced rates of 0% for net profits lower than THB 300,000, 15% from THB 300,000 to THB 3,000,000 and 20% over THB 3,000,000.

Petroleum operations performed by companies under a concession are taxed at 50% rate.

Capital gains – Capital gains are treated as ordinary income and taxed at the standard rate.

Dividends – Dividends received are included in the corporate tax base.

Dividends received from a Thai listed company are exempt from tax. Those received from a local unlisted company may be exempted, provided that the beneficiary holds at least 25% of voting shares for a period of at least 3 months.

Dividends received may be 50% tax exempt, provided that the beneficiary has been held the shares for at least three months before and three months after the dividends were received.

Dividends received from foreign companies are taxable but may be exempted if beneficiary holds at least 25% of shares with voting rights of the payer for a period not less than 6 months and profits were subject to at least 15% tax on the source.

Interests – Interests are subject to corporate income tax.

Royalties – Royalties are taxable at ordinary rates.

Foreign-source income – Foreign-source income is taxed when is accrued.  Foreign tax paid may be creditable against the tax chargeable in Thailand

Withholding taxes – Dividends paid to resident and non-residents are subject to a 10% withholding tax.

Royalties and interests paid to non-residents are subject to a 15% withholding tax. Interests paid on loans from a financial or insurance institution may be subject to a reduced 10% withholding tax if the lender is resident in a country where Thailand has concluded a tax treaty with.

Withholding tax rates may be reduced under a tax treaty.

Losses – Losses arising from taxable income may be carried forward for 5 years. Carryback of losses is not allowed.

Inventory - Inventory may be valued at the lower of acquisition/production costs or market value. To determine costs are allowed First in first out (FIFO), Last in first out (LIFO), Highest in first out (HIFO) methods, but a change in the method may require the approval of the Revenue Department.

Anti-avoidance rules – Related-party transactions must be made on an arm’s length basis, and transfer pricing disclosure is mandatory at the time of tax filing.

Thin capitalization and controlled foreign company regulations do not apply in Thailand.

Labor taxes – Employers and employees are required to make contributions to the social security fund at 5% of the monthly salary, capped at THB 750 per month for each one.

Tax credits and incentives – Foreign tax paid on foreign-source income taxable may be creditable up to the amount of tax payable in Thailand.

The Investment Promotion Act and the Competitive Enhancement Act provides tax holidays to companies approved by the Board of Investment (BOI). Companies conducting activities in the agricultural, mining, ceramic, metals, light industry, machinery, transportation equipment, electronic industry, electrical appliances, chemical, paper, plastics, services and public utilities, targeted core technologies and enabling services and strategic based activities may benefit from several tax exemptions and incentives.

Incentives available include the exemption from import duties, exemption from corporate income tax for up to 15 years, exclusion of dividends received from promoted enterprises up to 15 years and participation on the THB 10 billion subsidies under the Competitiveness Enhancement fund.

The Investment and Promotion Act also provides tax incentives to R&D contractors, including a corporate income tax exemption up to 8 years, exemption from import duties on certain machinery and raw materials, and exclusion of dividends derived during the period.

 

Compliance – On average, a company in Thailand may require 21 payments and 266 hours per year to prepare, file and pay corporate income tax, value added tax, and labor taxes, including payroll taxes and social contributions.

Exchange control – Remittance of profits may not be made in THB, but may be made in any other currency. The Bank of Thailand must approve the remittance of funds exceeding the ceiling set by the bank.

Personal income tax – To be a tax-resident in Thailand an individual must spend at least 180 days in a calendar year in the country.

Tax residents are subject to personal income tax on their income derived from Thailand and their foreign-source income remitted to Thailand in the year in which it is accrued. Income earned outside Thailand remitted after 1 year is tax-exempt.

Non-residents are subject to income tax on their Thai-source income.

Personal income tax is progressive at rates up to 35% for annual income exceeding THB 5,000,000. 

Dividends and interest are subject to a final withholding tax of 10% and 15%, respectively.

Capital gains are treated as ordinary income. However, those obtained from the sale of securities listed on the Stock Exchange of Thailand or any other ASEAN stock exchange are tax exempt, certain exceptions may apply.

Other taxes – A 12.5% real property tax is levied annually on the rental value of the property. Inheritances over THB 100,000,000 are taxed at a 10% rate, reductions may apply under certain circumstances. A gift tax applies on donations of assets exceeding THB 20,000,000 (10 million in the case that recipient is not descendant, ascendant or spouse).

There are no wealth taxes in Thailand.

V.A.T. standard rate is 10% (reduced to 7% until Sept 2017).

  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • 20% Offshore Income Tax Rate
  • 20% Corporate Tax Rate
  • 20% Capital Gains Tax Rate
  • 10% Dividends Received
  • 10% Dividends Withholding Tax Rate
  • 15% Interests Withholding Tax Rate
  • 15% Royalties Withholding Tax Rate
  • 0 Losses carryback (years)
  • 5 Losses carryforward (years)
  • FIFOLIFO Inventory methods permitted
  • 262 Tax time (hours)
  • 21 Tax payments per year
  • 5% Social Security Employee
  • 5% Social Security Employer
  • 35% Personal Income Tax Rate
  • 7% VAT Rate
  • 45 Tax Treaties

Country details

Thailand
THB
Bangkok
Asia
Thai, English
67,089,500

The Kingdom of Thailand, formerly known as the Kingdom of Siam, is a Southeast Asian country and a member of ASEAN. It is located to the north of the Southeast Asia subregion, bordering east with Laos, through the Mekong River, southeast with Cambodia and Gulf of Thailand, south with Malaysia and west with the Andaman Sea and Myanmar (Burma).

It is inhabited by 68 million people, of which more than a half live in rural areas. Its capital and the most populated city is Bangkok (also known as Krung Thep Mahanakon), with over 8 million inhabitants, and 14.5 million including the whole metropolitan area.

Its official language is Thai, although there are several regional languages and dialects. Its official currency is the Thai Baht (THB).

Thailand is the second-largest economy in Southeast Asia, after Indonesia, and the fourth in terms of per capita income, after Singapore, Brunei, and Malaysia. The country has a diversified economy, driven by its industry and services, and heavily dependent on exports. Thailand has deposits of natural resources such as gypsum, lead, natural gas, rubber, tin, and tungsten.

The services sector plays an important role on its economy, accounting half of its GDP, and mainly comprised by retail, financial and banking services, and tourism, which with over 32 million visitors in 2016, accounted for 17.7 percent of its GDP.

Its industrial sector, focused on exports, is mainly comprised of the automotive, electronics, electrical appliances, and garment industries.

Regarding the primary sector, although it accounts for about 10 percent of its GDP, it is still employing more than a third part of its labor force. Its main crop is rice, being the second largest rice exporter worldwide. Other agricultural products that are produced in significant quantities are tapioca, rubber, cereals, sugar and some tropical fruits such as pineapple. Thailand is also one of the top seafood exporters worldwide.<

Tax treaties

Country Type Date Signed
Czech Republic DTC  1994-02-12
South Africa DTC  1996-02-12
Belgium DTC  1978-10-16
Poland DTC  1978-12-08
Canada DTC  1984-04-11
Philippines DTC  2013-06-21
Mauritius DTC  1997-10-01
Ireland DTC  2013-11-05
Chile DTC  2006-09-08
Israel DTC  1996-01-22
Russian Federation DTC  1999-09-23
Austria DTC  1985-05-08
Slovenia DTC  2003-07-11
Italy DTC  1977-12-22
United Arab Emirates DTC  2000-03-01
United Kingdom DTC  1981-02-18
Denmark DTC  1998-02-23
Switzerland DTC  1996-02-12
France DTC  1974-12-27
Pakistan DTC  1980-08-14
Estonia DTC  2012-10-25
China DTC  1986-10-27
Japan DTC  1990-04-07
Turkey DTC  2002-04-11
Luxembourg DTC  1996-05-06
Malaysia DTC  1982-03-29
Ukraine DTC  2004-03-10
Hong Kong, China DTC  2005-09-07
Netherlands DTC  1975-11-09
Seychelles DTC  2001-04-26
Indonesia DTC  2001-06-15
Finland DTC  1985-04-25
Sweden DTC  1988-10-19
United States DTC  1996-11-26
Spain DTC  1997-10-14
Hungary DTC  1989-05-18
Cyprus DTC  1998-10-27
New Zealand DTC  1998-10-22
Singapore DTC  1975-09-15
Australia DTC  1989-08-31
Norway DTC  2003-07-30
Korea, Republic of DTC  2006-11-16
Romania DTC  1996-06-26
Germany DTC  1967-07-10
India DTC  1985-03-22

Tax treaties Map

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