Thailand Subsidiary Setup: Ownership, Parent Documents, and Tax

Set the share allocation before the parent approves the investment

Treat “subsidiary” as a relationship between companies, then select the Thai legal vehicle. The vehicle considered here is a private company limited, incorporated under Thailand’s Civil and Commercial Code. It becomes a separate juristic person; its shareholder’s ordinary exposure is the unpaid amount on its shares. The DBD company handbook, pages 11–13 describes that structure and the company’s own shareholder records.

The DBD memorandum guidance requires at least two promoters, each a natural person subscribing for at least one share. An overseas corporation cannot be a promoter. Separately, the BOI private-company overview states that at least two shareholders are required at all times. Distinguish the people forming the company from the corporations or individuals that will actually hold its shares.

Full foreign ownership does not mean one shareholder. A lawful structure can have more than one foreign shareholder where the activity and route allow it. Do not write a cap table that gives every share directly to one parent, or add a person who has no genuine investment role merely to fill a box. Record each holder’s legal name, nationality or place of incorporation, number of shares, subscription amount and payment responsibility.

Settle the intended holding from the beginning. If promoter shares will later be transferred, identify the genuine initial ownership and obtain advice on the transfer and resulting register entries. Do not describe an intended future transfer as if the parent already owns those shares. The requirements for company formation in Thailand provide the underlying entity framework within which these ownership decisions must fit.

Test each activity before treating the ownership route as settled

A Thai incorporation does not remove foreign-business restrictions. Under section 4 of the Foreign Business Act , a Thai-registered company is generally foreign when foreigners hold half or more of its capital shares, including relevant ownership through other entities. Exactly 50% therefore matters. Section 8 separates the prohibited and permission-based lists; sections 11–13 address qualifying certificate and special-law routes. The official English translation assists interpretation, while the Thai law controls.

Prepare a short operating description for every activity: what the subsidiary supplies, to whom, who signs the customer contract and what the subsidiary charges. Include services to the parent or other group companies. Classify those facts against the current restricted categories, exclusions and any sector law before choosing an ordinary unrestricted route, a Foreign Business License, or a qualifying Foreign Business Certificate or Thailand Board of Investment (BOI) route. None is an entitlement obtained simply by calling the company a subsidiary.

A genuine Thai investor changes the cap table, not the need for accurate evidence. Section 36 of the same Act addresses nominee assistance. Genuine ownership and traceable funding should be established together: who bears the investment risk, pays for the shares and exercises the holder’s rights? A parent funding someone else’s supposed Thai investment requires examination, not a standard nominee arrangement.

For incorporation, Central Registration Office Order 2/2569 , effective August 1, 2026, adds targeted evidence where foreigners hold less than 50% of the registered capital, or no foreigner holds shares but a foreign director can bind the company alone or jointly. It requires the prescribed investment explanation and bank-issued statements tracing Thai shareholders’ payments and corresponding receipts. The Thai payer’s statement covers the three months before the stated payment date; the receiving account must show matching contributions. This is not a universal three-month statement requirement for every foreign parent.

Assign the funding explanation to the applicant and obtain the relevant payer and receiving-account records before signing. If a transfer cannot be reconciled to the named investor, repair the evidence or the proposed transaction first. A company outside this particular funding trigger can still require foreign-business clearance and other capital evidence; the Order does not approve its activity.

Give every parent document a question to prove

Ask the parent’s company secretary or home-jurisdiction adviser for a proof file, not an undifferentiated bundle of “legalised documents.” The table below is a recommended preparation tool. The applicable DBD application, any foreign-business route and the parent’s own law determine which instruments and certifications must actually be submitted. A bank’s later customer-identification request is a separate request.

An incorporation certificate proves a historical formation event; it may not identify today’s officers. A list of directors may not establish whether one director can sign alone. A resolution approving expenditure may leave the representative unnamed. Close these gaps with the relevant constitutional provision, current record or express mandate rather than expecting a certification stamp to supply missing authority.

Use an investment instruction sheet to make the parent approval executable. Record the proposed Thai name, activity, registered capital, parent’s share quantity and value, amount initially payable, nominated Thai-company directors, permitted signers and any delegation. Ask the parent’s adviser to confirm required approvals and execution formalities under its own law. This is a drafting brief, not a ready-made legal resolution.

Keep the parent’s representative and the subsidiary’s director distinct. The first acts for the investor in the subscription or meeting; the second holds office in the new Thai company. A person filling both roles must sign in the correct capacity each time. The identity and authority evidence for a corporate investor helps coordinate that distinction with the company-level filing.

Before execution, choose one spelling and identifier for every entity and signer. Carry these into translations, share schedules and the electronic application. The documentary chain below shows why a change to the investor or signatory can affect several records at once.

Execute the documents, then close the DBD registration record

Check three separate questions for each overseas instrument: who may sign it, how that signature or copy is authenticated for its intended use, and whether a certified Thai translation is required. Authentication does not prove that a resolution validly authorised the transaction; translation does not repair a missing page. Record the receiving process, signing country, accepted certification route and any stated freshness requirement before ordering documents.

The DBD guidance for overseas signatures recognises specified diplomatic or consular/commerce officials and persons able to provide valid certification under the signing country’s law, alongside another attestation route described in the guidance. Use that guidance for the relevant signature question and confirm how the present digital filing accepts the supporting evidence. It is not a universal instruction to notarise and embassy-legalise every parent document. No blanket three- or six-month expiry is assumed here.

For any required translation, keep the source document, complete translation and certification together. Match corporate suffixes, officer titles, dates and numbers. If the share allocation or signer changes after approval, determine which resolution, mandate and certified set must be replaced before updating the Thai forms. Freeze the approved version before signatures begin so a corrected upload does not silently conflict with an already executed parent approval.

As checked on October 27, 2026, the DBD’s current channel announcement confirms that new private-company formations have used DBD Biz Regist exclusively since July 1, 2026. Older paper or e-Registration instructions are not the formation route. Plan from approved ownership and activities to accepted company records; overseas evidence, signer access and any operating clearance are dependencies, so there is no fixed end-to-end approval time.

1. Prepare the accepted name, memorandum, full subscription and statutory-meeting decisions. Appoint directors and the auditor and reconcile the called share payment. DBD’s formation guidance requires payment of at least 25% of each share’s value and filing within three months after the statutory meeting.
2. Arrange the applicant’s account and identity verification through the channels currently offered in DBD Biz Regist. Determine the supported verification and signing route for each foreign participant before circulating execution instructions.
3. Complete the company data and applicable attachments, including the parent authority evidence and conditional funding documents. Submit for review, monitor the application reference and resolve the registrar’s specified corrections with consistent replacement records.
4. Complete the required electronic signatures and payment when the system permits, then retain the receipt and accepted electronic registration documents. Check the issued company name, capital, office, directors and binding-signature condition against the approved file.

The substantive formation sequence is set out in DBD’s incorporation manual ; the department’s digital-workflow explanation describes account verification, review, electronic signing, payment and downloads. The public guidance was checked, rather than an authenticated filing being performed. Preserve application messages as well as the final output: a submitted application is not incorporation evidence.

Configure tax before the subsidiary invoices or pays its parent

The subsidiary has its own Thai taxpayer identity. The Revenue Department’s 13-digit identification clarification directs companies and juristic partnerships to use the DBD juristic-person registration number for Revenue Code purposes; the DBD handbook confirms the same point for a newly registered company. Do not copy an older English instruction about a separate 10-digit number into the setup plan. Confirm the taxpayer name, address, accounting period, authorised filer and electronic filing access, and correct any mismatched records.

Corporate income tax and the first accounting period

A Thai-incorporated company is within the corporate income tax regime under Revenue Code sections 65–66 . Taxable net profit is determined under the Code, not simply by the amount transferred to the parent. The general rate in the current statutory rate schedule is 20%. Any SME treatment, promotion exemption or other relief needs its own eligibility analysis; foreign parent ownership does not itself create a tax holiday.

Appoint the bookkeeping and audit responsibilities from incorporation, decide the first year-end and retain the parent subscription and payment evidence in the Thai company’s records. The annual corporate return has a statutory baseline of 150 days after the accounting period ends; the Revenue Department also describes a half-year prepayment framework. Have the accountant apply the corporate income tax filing guidance to the actual first period and filing channel, including any applicable extension rather than assuming every new company has the same first deadline.

VAT is a separate activity and turnover decision

The Thai Revenue Department VAT-registration guidance gives a THB 1.8 million annual receipts trigger for ordinary supplies of goods or services and filing within 30 days after the threshold is exceeded. Exempt activities and other regimes must be considered; the department’s VAT overview describes those boundaries. These official guidance pages were checked on October 27, 2026, although their stated update dates are older. Incorporation and receipt of shareholder capital are not evidence that VAT registration is complete.

Assign someone to track taxable turnover from the first transaction. Prepare the premises, authorised-signatory and business evidence before a trigger is reached, and assess an eligible earlier registration if the operating plan requires it. Keep the VAT application, effective registration and invoicing setup as distinct checkpoints. A parent’s VAT status or a group accounting system cannot substitute for the Thai subsidiary’s own registration and records.

Classify every payment between subsidiary and parent

Approve a transaction map covering equity contributions, shareholder loans, service or royalty charges and dividends. State which company owes the payment, the contract behind it and the tax review required before payment. A payment labelled “group recharge” still needs classification; deductibility, related-party pricing, withholding and any VAT on cross-border services are separate questions. The existence of common ownership does not resolve them.

For a dividend paid to an overseas corporate shareholder not carrying on business in Thailand, section 70 and the statutory schedule provide a general domestic withholding baseline of 10%. Test the recipient, payment character and any applicable treaty or exemption before applying a rate. Keep the company-law approval and distributable-profit review separate from that tax calculation. A subsidiary dividend should not be treated automatically as a foreign branch’s profit remittance.

For planning, a THB 1,000,000 dividend subject to that unrelieved 10% baseline would produce THB 100,000 withholding and THB 900,000 payable to the parent. This illustrates withholding on the dividend only; it excludes the subsidiary’s earlier profit tax and assumes the full dividend belongs to that parent. It is neither a combined group tax rate nor a conclusion about treaty entitlement.

Release the subsidiary investment against three signed-off records

Proceed with incorporation when the activity permits the proposed ownership, the actual shareholders and payments reconcile, and the parent’s authority reaches every human signer. Give the parent approval, the Thai formation file and the tax transaction map separate owners. They should share the same company identities and investment figures while answering different questions.

Prioritise unresolved legal capacity or ownership first, execution and DBD acceptance second, and the subsidiary’s invoicing and payment controls before operations begin. If the parent record cannot establish signing authority, a Thai subscription has an unexplained payer, or a revenue activity has no cleared route, stop the affected step and resolve that specific issue. An incorporation certificate closes the entity-creation task; launch also requires the relevant foreign-business, sector and tax conditions to be satisfied.