Incorporating a Tech Business in Thailand: What I Learned
Learn how a foreign founder set up a Thai company, navigated the SMART Visa, partnered with locals, and structured shares under Thai law—all while avoiding legal pitfalls.
Incorporating a Tech Business in Thailand: What I Learned
Introduction: The Allure—and Reality—of Starting Up in Thailand
Thailand looked like an ideal place to base a tech startup—low cost of living, beautiful landscapes, and a growing digital scene. Add in Smart Visas and BOI incentives, and it seemed almost too good to pass up.
On paper, the promise is clear: relaxed visa options, affordable resources, and government support for tech founders. I expected a fast, lean setup process and immediate access to capital and local talent.
The reality, however, was more complex. Thai corporate structures have strict foreign-ownership limits. Bureaucracy can drag out every step—from registration to banking. And without the right local alignment, incentives like BOI support are just theoretical.
In the sections ahead, I’ll walk you through:
- Thailand’s 49% rule on foreign ownership
- How I structured shares to both comply and retain control
- What the SMART Visa really did (and didn’t) provide
- Finding trustworthy Thai partners
- Legal setup, banking, capital requirements
- Misleading allure of BOI incentives
- Whether I’d do it again
The 49% Rule: Foreigners Don’t Have Full Ownership by Default
One of the first—and most critical—lessons I learned is that Thailand, like much of Southeast Asia, limits foreign ownership of Thai-registered companies to 49% unless exemptions apply:contentReference[oaicite:1]{index=1}. Unlike Singapore or Delaware, where foreigners can own 100% by default, Thailand places ownership control in Thai hands unless you qualify for special status.
This means any Thai company you start typically needs 51% Thai-owned shares, giving your Thai partner formal majority control. That partner holds voting rights and decision authority, which can materially affect your ability to scale, pivot, or protect your creation.
It’s easy to overlook because you transfer board control, not cash flow or IP rights. But when negotiations or disagreements arise, legal ownership carries weight—and ignites complexity. Relying on trust isn’t enough without structural safeguards.
There are exceptions. BOI-promoted companies, businesses under US-Amity Treaty, licensed FBLs, and certain export-oriented ventures can exceed the 49% rule:contentReference[oaicite:2]{index=2}. But those routes require capital, approvals, and eligibility—far from startup-ready.
In practice, it means I had to:
- Align vision and code of conduct with my Thai partner
- Build legal agreements around voting and veto power
- Ensure financial incentives were transparent
- Estimate tech roadmaps jointly and commit to shared milestones
If your goal is to build real IP, not just operate a local shell, Thai ownership isn’t just a formal detail—it’s a strategic decision. You need legal counsel, transparent structures, and mutual trust at the core. Otherwise, even with 49% of the shares, you may end up with zero real power at crunch time.
Structuring Shares as a Foreign Tech Founder
When my co-founder and I decided to start our tech business in Chiang Mai, we chose clear and direct ownership at 51% Thai / 49% foreign—not just on paper, but aligned with our day-to-day responsibilities and long-term goals. That clarity underpins trust, compliance, and functional governance.
Voting Shares vs. Non-Voting Shares
We considered dividing share types into voting and non-voting classes. Under this model, class A shares (with voting power) would lean toward the Thai partner, while class B shares would represent financial interests without board control. This setup mimics structures used in Delaware or Singapore, allowing both parties to benefit financially while clearly defining who calls strategy.
However, Thai corporate law doesn’t always align with such duplicity. Government agencies—like the Department of Business Development (DBD), banks, and visa authorities—may flag non-voting arrangements as opaque or problematic. We decided a simpler one-class share system—with voting rights consistent across the board—ensures compliance and reduces ambiguity.
Preferred Shares and Restricted Rights
Preferred shares give investors financial leeway—like dividends or liquidation priority—without matching voting power. It’s tempting, especially if you want to retain foreign control, but in Thailand it introduces complexity. Structuring preferred shares requires legal precision in articles of association, and banks often ask for transparency: “who genuinely controls this company?”
We worked with Thai counsel to draft protection clauses—preemption rights, veto thresholds, vesting schedules—without creating preferred series. This saved time, money, and regulatory back-and-forth.
Trust-Based Vesting and Shareholder Agreements
Rather than rely on complex share classes, we used shareholder and founders’ agreements to manage vesting, exit triggers, voting thresholds, and dispute resolution. We set up vesting for founders so equity is earned, not static—protecting both the Thai and foreign parties from misalignment.
For example, if one founder exits early, the agreement allows the other founder or the company to buy back unvested shares at cost. This prevents scenarios where a retaining founder is outvoted or outmaneuvered by someone who stops contributing.
Rejecting the Nominee Option
Some consultants suggested a nominee structure—putting the Thai partner’s name forward while giving full control to the foreign founder via preference shares or power of attorney. This is a common workaround but is illegal under the Foreign Business Act. Section 36 penalizes nominee arrangements with up to ฿1 million in fines and three years in prison :contentReference[oaicite:1]{index=1}.
Authorities are tightening enforcement—regular reviews and prosecutions make reliance on nominee setups risky :contentReference[oaicite:2]{index=2}. Instead, we opted for transparency: a real Thai partner, genuine contribution, and no backdoor arrangements.
Real-World Constraints with Banks and Agencies
Banks typically require to see a true majority shareholder, especially for SME business accounts. Appointing a nominee or layering share classes makes the process slower and often triggers additional due diligence. With our plain 51/49 structure, we opened accounts in days, not weeks.
Government agencies—like BOI and NIA—verify that ownership structures aren’t ghosted or misleading. We passed scrutiny precisely because we declared our roles and shares openly. Non-standard structures can stall filings or disqualify you from incentives.
Caption: Clear share structures simplify banking, licensing, and compliance.
Hypotheticals to Consider
Hypothetical A: You offer a Thai friend 51% as a name-holder while you run everything. Later, they demand equity pay-out or start slowing decisions—it becomes a hostage situation. A locked, transparent agreement could avoid this.
Hypothetical B: You use preferred shares to own 100%, but banks delay your applications, visa offices question your control, and Thai partners don’t take you seriously. Structure becomes a barrier, not a benefit.
Hypothetical C: Instead, you invest real Thai sweat equity—your partner handles local business development, regulations, or product-market alignment. Your 49% remains meaningful, your partner is engaged, and your team functions coherently.
The Bottom Line
Structuring a 51/49 company partnership in Thailand doesn’t have to be a vulnerability—it can be your foundation. Forget nominee shortcuts and over-engineered share classes. Opt for simplicity, transparency, and mutual trust. For founders—and especially foreign founders—this is far more powerful than any paper loopholes.
The Smart Visa Didn’t Solve Everything—But It Helped
Read: Smart Visa vs. Destination Thailand Visa: A Startup Perspective
Getting the SMART S Visa was a major milestone—it meant I could legally work in Thailand under my own company, hold equity, and operate without needing a separate work permit. But it wasn’t a magic bullet. It gave me a foundation, not a shortcut.
The SMART Visa allowed me to register a Thai company in an eligible tech category. With my company formally recognized, I had the ability to open a bank account, sponsor my own visa, and start building the business infrastructure I needed. I was no longer working in a legal gray zone—I was fully operational.
But none of that happened without first incorporating a Thai company and meeting the requirements: paid-up capital, local shareholders, and clearly defined business operations. The SMART Visa doesn’t bypass these steps—it sits on top of them. You still need to go through the same layers of Thai bureaucracy: corporate filings, tax registration, immigration forms, and business license coordination.
Also, getting approved for SMART S involved coordination with a government agency (DEPA, in my case) and required a full business plan, proof of funding, and a Thai-registered address. It’s not passive—it takes weeks of paperwork and follow-up.
What it did offer was legal clarity and long-term stability. I could now hire, invoice, scale, and reinvest in Thailand without worrying about immigration changes or overstaying boundaries. But you should know: even with the SMART Visa, you still have to do the hard part—build a real, compliant business from the ground up.
Finding the Right Thai Partner Is the Most Important Decision
When you’re starting a business in Thailand as a foreigner, you’re not just incorporating—you’re entering a long-term relationship. Thai law requires a 51% local shareholding for most non-BOI businesses, which means you’re giving someone control on paper. But in practice, this needs to be about much more than legal compliance.
The Thai partner you choose shouldn’t just be a figurehead—they should bring skills, commitment, and strategic alignment to the table. Otherwise, that 51% becomes a liability rather than an asset.
In my case, I partnered with Jake and Amber. They’re not just locals—we’re business collaborators. Jake brings operational experience, Amber handles marketing and client development. Together, they own 51%, and they earn it. Their background running Green Light Studio and advising startups in Thailand gives them a strong grasp of the local business landscape. That expertise complements my technical background perfectly.
I’m introverted by nature—I build software, architect systems, and focus on backend product design. I don’t have the marketing instincts or front-line experience they do. That’s why our dynamic works: we’ve built a symbiotic relationship where each of us focuses on what we do best. I handle AI development, infrastructure, and automation. They handle growth, branding, and customer acquisition.
We spent real time building trust. We drafted founder agreements, set roles and expectations, and defined vesting periods and decision processes. We agreed to revisit responsibilities every quarter. There’s no ego—just alignment. That makes all the difference.
Too many foreigners try to shortcut this process with nominee shareholders or loose handshake agreements. Don’t. It will collapse the moment pressure hits—when funding enters, when revenue scales, or when strategy diverges. If your local partner doesn’t actually believe in the business, you’re not building together. You’re borrowing time.
The right Thai partner isn’t just someone who signs your paperwork. They’re someone you can brainstorm with, problem-solve alongside, and trust to make decisions when you’re offline. That’s rare—but essential.
Navigating Registration, Banking, and Paid-Up Capital
Setting up a Thai company takes longer than many first-time founders expect, even under the SMART Visa route. From start to finish, it took us just under six weeks to get the company legally registered, filings complete, and initial documents in place.
The process began with name reservation and submission of the memorandum of association to the Department of Business Development (DBD). That part moved quickly—within a week, we had board member appointments, shareholder documents, and company bylaws prepared. These needed to be translated and checked for consistency in Thai and English, which added to the time and legal cost. We spent approximately ฿30,000–฿40,000 on initial legal assistance, including translations and submission management.
We didn’t need to declare ฿2 million in paid-up capital, which is usually required per foreign employee if you’re pursuing a traditional work permit through the Ministry of Labour. The SMART S Visa gave us legal work authorization tied to the company, so we started with a more modest registered capital aligned with our needs. However, we still had to issue official share certificates and ensure that shareholder records were filed correctly with the DBD. These filings are mandatory and subject to audit.
Next came tax registration. Every Thai company must obtain a taxpayer ID from the Revenue Department, regardless of business size. This includes submitting financial information, projected income, and legal identification of all directors. If your business engages with local clients or crosses the annual ฿1.8 million revenue threshold, you also need to register for VAT.
We also needed a company stamp, which in Thailand remains a critical legal artifact. Stamps are required for many contracts, filings, and official documents—particularly those related to tax, licensing, and immigration. Creating a legally recognized stamp cost about ฿1,000–฿2,000, but failing to include it can delay or void filings.
We then proceeded with our first corporate filings, including director declarations, share allocation forms, and tax registration. These filings must be updated quarterly, with penalties for late or incorrect submissions. Even for a small startup, the compliance load is real—and it’s worth working with a Thai-speaking advisor to avoid mistakes.
Thailand’s registration system is not centralized. You’re dealing with multiple agencies: DBD, Revenue, BOI (if applicable), and often provincial offices depending on your location. There’s no single dashboard or online portal that ties it all together. The process is navigable, but only with proper sequencing and attention to detail.
BOI, NIA, and the Illusion of Incentives
Thailand’s government does offer startup incentives—but they often fall short for early-stage founders. On paper, the Board of Investment (BOI) offers major advantages: 100% foreign ownership, tax holidays, import duty exemptions, and visa fast-tracking. In practice, it’s much harder to qualify.
The BOI favors capital-intensive, export-focused, or high-tech verticals—like manufacturing, med-tech, or industrial AI. To apply, you’ll need to present a five-year hiring roadmap, significant Thai employee ratios, and partnerships with domestic research institutions. The average solo developer or lean SaaS startup isn’t likely to meet these requirements. It’s not that the incentives don’t exist—it’s that they’re structured for later-stage or well-funded businesses.
We explored a BOI application early on but found the process misaligned with our stage. It required time-consuming paperwork, detailed cash flow projections, and partner confirmations we couldn’t yet produce. For a team still refining product-market fit, it was a distraction.
The National Innovation Agency (NIA) is somewhat more accessible for R&D-heavy startups. If you’re working on something IP-intensive, like machine learning models, custom educational frameworks, or research-linked tech, the NIA might provide grants or support through innovation hubs. But even there, success often hinges on having Thai-language documentation, a Thai-speaking technical liaison, and research partnerships in place. Most bootstrapped SaaS businesses will find the lift too heavy.
In short: government incentives look promising, but they aren’t designed for founders just getting off the ground. They make more sense when you’re already scaling and have local infrastructure in place. Until then, they’re more marketing than material benefit.
Would I Do It Again? Only If…
Looking back, incorporating a Thai company under the SMART Visa route was the right decision—but not an easy one. The process demands patience, cultural adaptation, and a willingness to engage with local systems that don’t always move quickly or logically. You don’t get to skip the hard parts—but if you’re building something serious, that’s a feature, not a bug.
If your goal is to establish a long-term presence in Thailand, develop real intellectual property, hire local talent, and integrate into the Thai market, then yes—I would absolutely recommend incorporation. Thailand rewards persistence. It gives you lower burn, high quality of life, and a base from which to grow something sustainable. But it only works if you’re here to build with intent.
On the other hand, if you’re just looking for a cheap offshore entity with minimal friction, this isn’t the jurisdiction for you. Thailand’s bureaucracy doesn’t support passive ownership or rubber-stamp formations. You’ll run into regulatory bottlenecks, visa confusion, and partner issues if you’re not aligned from the start. You won’t succeed by treating Thailand like a loophole.
This country favors people who want to be here and contribute—those willing to understand the local landscape and find synergy with Thai collaborators. In our case, the trust built with our Thai partners, the structure provided by the SMART Visa, and the legal clarity of full incorporation gave us a foundation we couldn’t have replicated in many other Southeast Asian markets.
So would I do it again? Only if I had the right partners, the right vision, and the patience to do it properly. Shortcut-seekers won’t survive here. But committed founders can absolutely thrive.
Conclusion: Incorporation Is Not Just a Legal Step—It’s a Strategic Commitment
Incorporating in Thailand is more than just filling out paperwork or ticking off visa boxes—it’s a strategic decision to build inside a system that rewards long-term effort and alignment. You’re not just registering a business—you’re anchoring your operations in a culture, a legal structure, and a network that works differently than what many Western founders are used to.
That means choosing the right partners, respecting local compliance processes, and integrating into the community—not just legally, but professionally. You have to show up. You have to listen. And you have to invest in the foundations if you expect to grow.
But if you do it right, Thailand offers something most startup ecosystems don’t: time. Time to think, time to build, and time to breathe. Pair that with access to talent, lower costs, and strong regional connectivity, and you’ve got a viable base for serious founders.
If you’re navigating this process yourself—or thinking about it—feel free to reach out. We’ve made every mistake once so you don’t have to. This isn’t an easy path, but it can be the right one.