[ESTABLISHING A BUSINESS ENTITY IN THAILAND] 479
Code . A Joint Venture’s income is subject to corporate income tax as a new entity and is required to obtain a new Tax I.D. under the Revenue Code. • Consortium – A consortium is not a new legal entity under the Thai Civil and Commercial Code neither the Revenue Code. However, the consortium agreement is a kind of loose partnership, in which each party to the consortium is individually responsible for each work designated under the consortium agreement. Therefore, it does not need to have Tax I.D. and register as a value added tax operator. Each of the consortium party is responsible to pay tax based on profit and loss of its own entity and obtain necessary license. • Branch Office - A Branch Office can only do business on behalf of a company based outside Thailand and must obtain a business license or a business certificate according to the FBA. However, a Branch Office can only engage in specific business activities granted under the FBA. A company must bring in a minimum capital of at least 3 million Baht; however, this is the minimum threshold, and the actual amount is calculated at 25% of the average per year of three years ’ estimated expenditures. For tax payment, a Branch Office is treated as a juristic person. • Representative Office - A Representative Office (Rep-Office) can only engage in certain business activities on behalf of a company based outside Thailand, such as: o Finding a source for the purchase of goods or services in Thailand for the head office;
• Limited Partnership - In a limited partnership, the managing partners are jointly held personally liable for the partnership's debts and any non- managing partners are only liable for the amount of any undelivered or withdrawn capital contribution. Partner profits are subject to taxation, so profits are subject to two levels of taxation. A limited partnership will also be able to convert its legal status to a private limited company and subject to certain conditions as mentioned in “ Registered Ordinary Partnership ” , above • Private Limited Company - Basically a corporation, a Private Limited Company must have a minimum of two persons join together to start a business with the capital divided into shares of equal par value. A Private Limited Company is taxed as a juristic entity. • Public Limited Company - A Public Limited Company is formed in order to offer shares to the general public and must have a minimum of 15 persons join together. A Public Limited Company is a juristic entity and taxed as one. Individual shareholders must pay tax on their earnings, and foreign corporate shareholders pay tax on all dividends. Income Tax imposing on capital gain will be different when trading shares issued by a publicly listed company in the Stock Market of Thailand. • Joint Venture - In Thailand, a Joint Venture is not a legal entity under the Civil and Commercial Code. If two parties both individual and corporate entity do enter into an agreement to work together as a Joint Venture, it is regarded to be a juristic entity under the Thai Revenue
ILN Corporate Group – Establishing a Business Entity Series
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