Offshore Company in Thailand

Benefits, Tax Optimization and Legal Aspects

Thailand needs no special introduction. It is the largest country in Southeast Asia with a comfortable climate and a stable developing economy. It has long been a place of pilgrimage for foreign tourists, and in recent years it has become an attractive destination for foreign business. Many foreign entrepreneurs strive to take a place in the domestic market, creating joint ventures and occupying niches in various business areas. However, Thailand is also a strategic location for establishing offshore companies for international business activities. An offshore company in Thailand can trade, provide services, and conduct business operations with international partners without operating domestically. Such a company can be managed remotely and offers numerous advantages in terms of cost-efficiency and tax optimization.

Offshore company in Thailand provides many valuable options for business

Incorporation of an Offshore Company in Thailand

The process of registering an offshore company is generally the same as registering a regular limited liability company (Ltd). The legal structure is familiar, which simplifies the process for international investors.

Key requirements for registering an offshore company in Thailand:

  • Shareholders: Minimum of 2 shareholders.

  • Director: At least 1 director (can be of any nationality). There is no requirement for a local director.

  • Ownership Structure: If the company does not operate in Thailand and does not sell to the Thai market, 100% foreign ownership is permitted. There is no requirement for a Thai shareholder with a 51% ownership stake if the company operates solely outside of Thailand.

This means that a Thai foreign company is considered offshore if it has full foreign ownership but conducts no business within the kingdom. Such a company can engage in international trade, logistics, and other global operations without local restrictions. Additionally, an offshore company in Thailand can:

  • Open a corporate account in a local Thai bank.

  • Conduct foreign exchange transactions freely.

  • Rent an office and hire employees in Thailand if needed.

Operational Insights for Offshore Companies

  • Corporate Bank Accounts: Opening a bank account in a Thai bank for an offshore company provides easy access to international transactions and foreign currency management. Thai banks are well-integrated into the international SWIFT network.

  • Employment and Office Setup: Offshore companies can legally hire employees, both local and foreign, and maintain a physical office in Thailand if they choose to operate support or management services from within the country.

  • Currency Operations: Offshore companies enjoy unrestricted currency operations. Payments can be made in multiple currencies without the need for conversion to Thai Baht.

Advantages of Offshore Companies in Thailand:

  • Tax Advantages: Offshore companies that do not operate in Thailand or generate local income are not required to register for VAT. Corporate tax on local earnings ranges from 0% to 20%, depending on net profit.

  • Confidentiality and Anonymity: Thailand maintains a high level of confidentiality. The personal data of shareholders is not publicly accessible.

  • No Currency Restrictions: Thailand has liberal foreign exchange policies, allowing offshore companies to hold multi-currency accounts and process international payments without conversion requirements.

  • Easy Business Operations: Offshore companies can seamlessly conduct cross-border business transactions, ship goods from suppliers to buyers internationally, and enter into international agreements.

Tax Optimization for Offshore Companies in Thailand:

  • Corporate Income Tax: Offshore companies that do not earn income from Thai sources are not subject to local corporate tax on their international earnings. For local earnings, the tax structure is as follows:

    • 0% for net income up to THB 300,000.

    • 15% for net income from THB 300,000 to THB 3 million.

    • 20% for net income exceeding THB 3 million.

  • Withholding Tax: Payments made to foreign entities from a Thai offshore company may be subject to withholding tax unless covered by a double taxation treaty.

Legal Aspects of Offshore Company Formation:

  • Registration Procedure: Offshore company registration in Thailand is straightforward and can be completed in 1-2 business days.

  • Licensing and Compliance: Offshore companies must maintain proper bookkeeping and file annual returns with the Department of Business Development (DBD).

  • Company Secretary and Legal Support: It is recommended to appoint a company secretary to ensure compliance with legal obligations and annual filings.

  • Banking Requirements: Offshore companies must submit their corporate documents, shareholder information, and business plan to open a bank account.

Operational and Legal Considerations:

  • BOI Promotion: In certain industries, such as tech, logistics, and e-commerce, offshore companies can apply for BOI privileges, which allow 100% foreign ownership, tax holidays, and simplified visa and work permit processes.

  • Work Permits for Directors and Employees: Offshore companies can apply for work permits for their foreign directors and employees if they operate a physical office in Thailand.

  • Double Taxation Treaties: Thailand has over 60 double taxation agreements, which can reduce withholding tax rates on cross-border payments.

Conclusion

Establishing an offshore company in Thailand provides international entrepreneurs with a powerful tool for tax optimization, privacy, and efficient international operations. With benefits like 100% foreign ownership, unrestricted currency operations, and robust legal support, Thailand is an ideal location for offshore structures. Our team is ready to assist you with every aspect of forming and operating your offshore company in Thailand. Contact us today for expert advice and start your journey to global business success.