Startups are increasingly playing an integral role in Thailand’s economic growth and development. Thailand has also done a great job of attracting and catering for startups and boasts a thriving startup scene. However, even with the greatest support from the Government, startups may often overlook or simply not be aware of important issues, such as the basic laws, rules and regulations governing businesses in Thailand.
Legal and compliance issues are not the only things which startups may overlook. Other common oversights include, intellectual property rights, drafting of contracts, and employment-related compliance etc. More often than not in practice, these issues will not be considered unless a dispute or issue arises because of them, resulting in costly disputes which could have been easy to avoid.
Belaws boasts a team of experts who have vast experience in working with startups and driving their growth. This experience has led to a deep understanding of what is required for a startup to flourish in Thailand. With experts across multiple fields including, Legal, Corporate & Secretary and Accounting all in one place, Belaws is your one stop service for your startup in Thailand.
before you start
Quick and clear answers to your questions
at a fixed price from expert lawyers
Quick and clear answers to your questions at a fixed price from expert lawyers
Get quick answers to your questions
before you open your startup
When launching a new startup in Thailand, we understand that there is a lot to think about and consider. Opening a startup in a new country brings challenges and issues you may never have experienced before. From difficulties relating to language to legal, accounting and compliance matters, there is a lot to be aware of. Our team of experts are here to guide, assist and support startups every step of the way by providing accurate and reliable advice which will reflect your company’s needs and goals.
We offer consultations and provide advice and solutions you can trust for startups across all stages of their development. Our legal consultation has been designed with the client in mind, our lawyers will provide clear and easy to understand advice which you can trust.
- What is the best incorporation structure for my startup?
- What are the major areas of compliance I need to consider?
- Is my startup eligible for any benefits or tax incentives?
- Can I hire foreigners to work for my startup?
- Can I protect my intellectual property in Thailand?
- Will I be able to receive funding in Thailand?
- What are my work permit and Visa options?
- What is the tax regime on startups in Thailand?
Book a legal Consultation with a startup expert
Up to 1 hour.
With a Startup Expert.
Where to start?
Where to start?
Before Registering your company
Before you begin the company registration process it is important to obtain a Visa to stay in Thailand. The SMART Visa S is a popular Visa option for the founders of a startup. However, please be aware that in order to qualify for a SMART Visa S, the proposed business activities of the startup must be part of the pre approved list of target industries. Another potential solution is a sponsored work permit provided by an employee of record.
Ownership structure in Thailand
When looking to raise funds, you will be required to issue some shares to the investors which will reduce your personal shareholding. Therefore, if you are a foreigner in Thailand, you must try and achieve 100 % ownership of your company. To do so, obtaining a license from the BOI is often the best option.
If your proposed business activity is not eligible for a BOI license, you could set up your company with a Thai partner and ensure control through a preference share issue. Please note that if you choose this route, the Thai partner must be a real partner as Thailand prohibits the use of nominees.
It is common to register a holding company in Singapore or Hong Kong to facilitate fund raising from foreign Venture Capitalists. A holding company can also provide additional protection for protecting and enforcing Intellectual Property rights and tax optimisations for the Exit.
Legal and Due Diligence
Before making an investment, the investors will ensure that the company has been incorporated and operates legally. Additionally they will look to make sure that all of the commercial and digital rights have been adequately secured.
Startups must ensure that:
- The company has all the necessary licenses to operate its business
- Shareholders Agreements or Co-founder Agreements are in place to anticipate issues between the founders of the company (preemption rights, bad leaver clause etc.)
- Commercial contracts duly signed with suppliers and clients
- Terms and conditions on the website
- Employment contracts and ESOP for your key people
- Up to date Bookkeeping and tax filings. If you have an holding company, accounting shall be consolidated at the holding level
- Trademarks and other IP rights registered and protected
→ Immediate Legal Consultation to get a detailed overview on how to ensure that your due diligence is ready
When looking to raise funds there are a few important things that must be considered.
- An NDA is often required before sharing the details of your business.
- The preparation of a Term Sheet which contains main terms of the deal. When there are issues relating to the proper valuation, a SAFE is a good option.
- Upon confirmation of the details the parties must enter into a Share Purchase Agreement and a Shareholder Agreement.
Fundraising is both a legal and psychological challenge for startups and there is a lot to consider. Please be aware that all the rights granted during the first investment round are granted forever, therefore it is important that each term is carefully considered to ensure the protection of the companies best interests.
Fully comprehensive package
Business Feasibility Check &
Ownership structuring options
+ 7% VAT
- 100% foreign ownership check (BOI, Foreign Business License)
- Structuring options: Limited company, Thai partners, Holding company
+ 7% VAT
- Introduction to our network of investors
- NDA and Term Sheet
- Reviewing & Drafting the SPA
- Accompanying you during the full fund raising process
+ 7% VAT
- Quick Legal & Tax Health check up: Ownership, necessary licenses, main contracts, accounting and tax
- Due Diligence preparation: Drafting contracts, registering IP rights and other rights to ensure that your company is “due diligence ready” for the investors
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Frequently asked questions
What is the minimum capital requirement to launch a startup in Thailand?
For a Thai majority owned company, there is a requirement to have 3 shareholders with a minimum registered capital of THB 5 per shareholder. This means, in theory the minimum capital requirement is THB 15, however, in practice it is highly recommended to have enough registered capital to cover the initial financial needs of the company.
Foreign majority-owned companies are required to have at least THB 2 Million (unrestricted business activities) or THB 3 Million (restricted business activities). The company’s capital must be divided into shares, with a value of at least THB 5. For BOI companies, the required amount of capital starts from THB 1 Million (the actual amount depends on the category and type of project your company will be undertaking).
In order to hire a foriegn employee (for non-BOI companies), companies are required to have a minimum registered capital of THB 2 Million (THB 1 Million if the foreign employee is married to a Thai national) per foreign employee hired. For example, hiring 2 foreign employees would require THB 4 Million (THB 2 Million if both married to Thai nationals) of registered capital.
What are some startup accelerators in Thailand?
Below is a list of some of the startup incubators currently active in Thailand:
AIS The Startup
Allianz Ayudhya Activator
Bangkok Bank InnoHub
Sprint Accelerator Thailand
SPARK Global Acceleration Program
What is the process for raising funds in Thailand?
- Find investors
As a new startup company, it’s normal to assume you should accept funding from wherever you can find it, however, this isn’t always the best course of action. Investment does bring in much needed capital but the real value lies from the relationships you will foster with the investors you choose to work with. Therefore, it is important to identify and approach the right set of investors to help your business grow.
- Enter into an NDA
A Non-disclosure agreement (NDA) is an important step to undertake as they protect any and all sensitive and confidential information from being taken or used by the recipient of that information, in this case any potential investors. Startups use these documents to ensure that their ideas won’t be stolen or used by the other party.
- Agree on the Term Sheets
Term sheets lay the groundwork for ensuring that the parties involved in a business transaction agree on the most important aspects of the deal. The term sheet reduces the likelihood of any misunderstandings or unnecessary disputes arising.
- Facilitate the due diligence process
Due diligence helps potential investors understand the nature of an investment opportunity, analyse the risks involved, and whether the deal fits with what they are looking for. Due diligence is essentially an investor doing their “homework” on a potential deal and is a critical step towards making an informed investment decision.
- Negotiate a Sale and Purchase Agreement (SPA)
An SPA is the most important legal document in any sale process. An SPA sets out the agreed parts of the deal and includes a number of important protections and duties for all the parties involved. Ultimately, an SPA provides the legal framework required to complete the sale. The SPA is therefore of critical importance to both sellers and buyers. When drawing up an SPA, the terms must be agreeable to all. Many startup owners are often so keen to get investment that they forget to protect their own interests
How much does it cost to hire a lawyer for Startup in Thailand?
Startups often heavily rely on their own funds when starting their business and therefore are working with a budget. These budgets often mean that they cannot afford lawyers from the larger or international law firms. This lack of access to prominent legal advice is problematic for startups as they are subject to a series of often complex issues such as private equity, intellectual property and tax issues which may span across several jurisdictions. More often than not, local law firms are not equipped to provide the required services, leaving startup companies in a tight spot.
This is not the case at Belaws. Belaws provides a platform of top expert lawyers from international law firms, but unlike traditional legal practices, our platform only offers fixed prices, so startups know exactly what they are required to pay from the very beginning. Additionally, Belaws has a special package for assisting startups with their fundraising needs. As part of this package our expert lawyers will reduce their fees and collect their outstanding bill after the fundraising has been completed or within a certain pre-agreed timeline.
Where can I find free contract templates for startups in Thailand?
While the internet does offer plenty of free contract templates, they are very generic and may not fit the exact needs of the startup. Failure to correctly adapt these contracts could lead to significant issues down the line and result in the startup carrying the legal risk associated with it (e.g. having a contract that cannot be legally enforced or worse the creation of unexpected liability which could have been spotted and avoided by a professional.) Our expert lawyers are on hand to review and/or revise the templates you have found to ensure they fit your business needs and don’t create any problems later on.
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