Buy a Shelf Company in Thailand

Updated on Sunday 21st April 2019

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Foreign investors interested in expanding their business operations on the Thai market should know that they have several options under which they can do business here. A first method refers to the incorporation of a new company, a process which requires the completion of many legal aspects; the second option refers to the purchase of a shelf company, which can be an advantageous option for entrepreneurs who want to run the company as soon as possible. This is a company that is also called a dormant one; it was incorporated according to the law but it was left with no commercial activities whatsoever.

Businessmen who want to acquire a shelf company can receive assistance on this matter from our experts in company registration in Thailand

The main advantages of the shelf company are listed below:
 
  • Credibility: a company that has been in existence for a longer period of time tends to have more credibility in front of clients, creditors, banks and business associates; this I precisely what an aged company will offer to its buyer; moreover, it can also make it easier for accessing investment capital.
  • Easier processes: a company that has been on the market for some time can have better options and chances when submitting requests for obtaining work permits; in some cases, it can even be useful for individuals who wish to obtain a business visa; careful consideration is needed for these types of companies as there may be some limitations on the ability to apply for a visa for a foreign director; none of our agents can give you more information.
  • Saved time: the time needed to transfer ownership when purchasing a ready-made company will be significantly reduced compared to the time needed to prepare the documentation and make the necessary submissions to open a new company.
  • Saved costs: in some cases, buying an existing legal entity can prove to be a more economic business decision because of the costs will be lower; of course, this depends on the prices of the shelf company provider and due diligence is needed when making the purchase in order to make sure that the price is right. 
 
The shelf company can be acquired by foreign investors and used for purposes like raising capital and opening a local bank account. The company can apply for the needed permits and licenses in advance and can enter into agreements – all actions that allow the foreign investor to maintain a presence on the Thai market from the earliest days after establishing their business presence.
 
The shelf company can be purchased by entrepreneurs who wish to make a business investment and use the company in the future. Maintaining a company, even if it remains dormant after the transfer is made, will make it possible for investors to start trading in a very short amount of time when they do decide to take this step. Another reason why investors can consider buying a shelf company and handle this process in advance has to do with intellectual property rights. Some investors might want to know that their company is incorporated and registered in advance so as to protect themselves from competitors.

You can also find out how to buy a Thai ready-made company from the video below:
 


What is a Thai shelf company?


A shelf company in Thailand, or a ready-made company, is a business that is already incorporated as per the standard procedure and it is available for purchase. The principal benefit of this type of company is the fact that the investor can start his business immediately after the completion of the purchase. Thus, he no longer has to go through the company registration procedure in Thailand. Investors who do wish to know more about this procedure can contact the Department of Business Development for information about commercial registration.

The purchase of a shelf company is a rather simple process as it is the case in other jurisdictions, for example in Montenegro. This process consists of the transfer of ownership from the current owner to the buyer. The transfer of ownership is represented by the transfer of the company’s shares to the new owner. 

A ready-made business in Thailand will have a registered business address and will have its directors already appointed; the new owner will have to appoint new directors for the company; our Thai company formation specialists can offer you more details on this subject. 

In general, the following company information should be made readily available to buyers:
  1. the age of the company: in general, companies will be at least one year old.
  2. the company name: a shelf company has a unique name that also contains the abbreviation of the business type.
  3. the company address: this is the registered address of the company in Thailand; it is mandatory for registration but it can be changed later on.
  4. the capital of the company: this states the fully paid-up capital, the number of shares and their value; it can be increased afterward.
  5. the tax status of the company: general information about the taxes the company is subject to as well as financial statements, if applicable.
  6. any other details: in some situations, the company may have previous approvals from Thai departments.

It is important to verify all of the available information on an existing company. By doing so, investors will make sure that the purchase is a legitimate one and that the company is indeed free of any debts and has not been involved in any business transactions. Some companies for sale in Thailand can be already destined for some types of business activities such as consulting and services businesses or trading and import. This can later be changed. Entrepreneurs who have more questions on how these changes can be accomplished can reach out to our Thai company formation agents. We can also help with relocating the company in another Thai city.
 

How can I purchase a shelf company in Thailand?


Foreign investors who want to open a company in Thailand should know that at the purchase of a ready-made business they will have to change the following aspects after the transfer of ownership:

•    director of the company;
•    company name;
•    company seal;
•    shareholders;
•    company address. 

As a general rule, the process of buying a shelf company can last one or two days until the transfer of ownership is completed. If the shelf company was registered for Value Added Tax (VAT) but it remained dormant and had no commercial activities, the company is still required to file VAT returns on a monthly basis, specifying that the business had no income. 

Some of the costs associated with buying a ready-made company will include the transfer costs, the government fees and costs for making the new changes as well as the actual costs for buying the legal entity (the most substantial of the overall costs). The purchase costs will be higher in the case of companies that have been incorporated for a number of years. For example, in some situations, the purchase price can be double for a four-year-old company compared to a one-year-old one. Some companies that offer shelf companies for sale will allow buyers to continue using the initially registered address of the company, for a certain annual cost. An alternative would be to relocate the company to a different address or use a virtual office service in a Thai city. 

In some cases, the buyer may also be charged for additional services such as providing a local Thai address and providing the needed Thai shareholder. This is an important issue to take into consideration as Thai law requires companies to have both foreign and Thai shareholders. In most situations, the presence of at least one Thai national is required. One of our agents who specialize in Thailand company formation can give investors more information about the laws for foreign investments.

Buying a shelf company in Thailand is a suitable option for many investors. There is no need to engage in immediate business transactions once the legal entity ownership is transferred and some investors may choose to only use the shelf company for the purpose of intellectual property protection. For example, entrepreneurs who wish to register a trademark in Thailand can buy a shelf company and use it for this purpose. This ensures their ownership of the unique trademark irrespective of the fact that it may not be put to use right away.

The shelf company offers many advantages and the overall costs for purchase and transfers are comparable to those encountered when opening a new legal entity. The overall costs will naturally depend on whether or not the investor wishes to own an aged company. In this case, the additional costs for purchasing a company that has been incorporated for a number of years can justify the extra expenses. In turn, a company with seniority may provide unique benefits, such as for the investor to be able to secure business contracts in Thailand that he wouldn’t have had the ability to conclude if he would have worked with a start-up or a company incorporated in the last year.

Purchasing a shelf company is a suitable option as long as entrepreneurs perform a sound due diligence and purchase a legal entity from a trusted source. The transfer process is not a complicated one, however, the legal requirements must be duly observed. Once the shelf company is transferred to the new director, foreign business owners can start trading in Thailand.

If you need further information on the shelf company, please contact our consultants who can also help you open a new company in Thailand

Comments

Artturi

March 10, 2016

I believe that is so much easier to purchase a company that has already been incorporated because the process of owning the business is very simple and straightforward.



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