A. BUSINESS MODELS:-
Various types of common business structures in Thailand are:-
- Sole Proprietorship–This is a firm, owned by a single individual, which is not incorporated. Under the law, a person acting as a sole proprietor can engage in almost any lawful type of business with the exception of those businesses which have been otherwise regulated by the government.
- Partnership– Thailand provides for three general types of business structures:
- Unregistered ordinary partnerships-in which all partners are jointly and wholly liable for all obligations of the partnership.
- Registered ordinary partnerships-If registered, the partnership becomes a legal entity, separate and distinct from the individual partners.
- Limited partnerships-Individual partner liability is restricted to the amount of capital contributed to the partnership. Limited partnerships must be registered.
- Companies- These are of the following types:-
- Private Limited Companies– formed through a process which leads to the registration of a Memorandum of Association (Articles of Incorporation) and Articles of Association, as its constitutive documents. Shareholders enjoy limited liability. The liability of the directors, however, may be unlimited if so provided in the company’s memorandum of association or the articles of incorporation. All shares must be subscribed to, and at least 25 percent of the subscribed shares must be paid up. Stepsinvolved in the incorporation of the Private Limited Company are as under-
- Registering Company Name;
- Filing of the Memorandum of Association and Articles of Association with the Ministry of Commerce;
- Holding a Statutory meeting;
- Filing a formal Application- containing details of total number of shares subscribed or allotted (distinguishing ordinary shares from preference shares if any), number of ordinary shares or preference shares allotted as fully or partly paid-up otherwise than in money, and in the latter case, the extent to which they are paid-up, amount already paid in money on each share; the total amount of money received in respect of shares, names, occupations and addresses of the directors and if the directors have, power to act separately, their respective powers and the number or names of the directors whose signature is binding on the company, application must also contain the period for which the company is registered, if any has been fixed and address of the principal business office and of all branch offices and any other particulars, which the directors may deem expedient to make known to the public.
- Public Limited Company– Public Limited Companies must have a minimum of 15 promoters. Permission for inviting the public to subscribe for shares must be applied for as prescribed by the Securities Exchange Act B.E. 2535.
When it comes to the intent to operate a business as a foreigner in Thailand the approval requirement under the Foreign Business Act B.E. 2542 must be complied with. Foreigners can be granted a foreign business license for certain business categories (or may be granted an exemption based on a Treaty or specific Act). As it is very complicated and often impossible to obtain a foreign business license most foreigners operate a business without a foreign business license or exemption even though these business categories are restricted or prohibited for foreigners. These foreigners have a work permit issued under a Thai company and operate their business through a Thai limited company. Thai company means under the current Foreign Business Act that half or more of the juristic person’s shares are held by Thais. Foreigners are under the current FBA allowed to have majority voting rights and control in a Thai limited company through preference shares and weighted voting rights. The most popular form of business entity among foreign investors is therefore the private limited company.
B. ENTREPRENEURSHIP IN THAILAND:-
Prior to the 1990s, some 10,000 newly established enterprises were registered annually with the Ministry of Commerce. The number increased to over 20,000 in early 1990s before peaking at 37,988 in 1995. The number of new enterprises declined to 20,371 at the height of the Asian economic crisis. It then picked up again with the economic recovery to 31,757 in 2001. Various factors promote entrepreneurial growth in Thailand such as cultural and demographic factors, attitude towards women, strength of financial system etc. Thai women constitute a significant portion of the workforce, whose role has contributed, to a certain extent, to the country’s development. With their rising educational backgrounds, Thai women are well equipped to be a major force in driving the country towards an industrial and service-based economy.