At some point, every business owner wonders: “When is the right time to register my company?” and “When should I register for VAT?” If these questions sound familiar, you’re in the right place! Let’s break it down and make it easy to understand.
When Is the Right Time to Register Your Company?
While there’s no hard rule that says exactly when to register, one key indicator is your company’s revenue.
- Is your revenue over 750,000 Baht per year?
If your revenue exceeds 750,000 Baht and you haven’t yet registered your company, you’ll be taxed as an individual. This could mean paying up to 35% in personal income tax! However, if you register your company, the maximum corporate tax you’ll pay is only 20%. So, if your business income tax rate is climbing above 20%, registering your company could save you a lot of money. - Need to build credit?
As your company grows, you might need to apply for loans to expand. Having separate, clear financial records for your company and personal finances makes this process easier. Registering your company will help you build the solid credit you need to get approved for financing.
When Should You Register for VAT?
In Thailand, both individuals and companies must register for VAT when…
- Your annual revenue exceeds 1.8 million Baht
If your business generates more than 1.8 million Baht annually from selling goods or services, you must register for VAT within 30 days of surpassing this threshold. - Want to claim back VAT?
If your business has a plan that involves purchasing taxable goods or services—like investing in construction or machinery—you can claim back the VAT you’ve paid. You can even register for VAT up to 6 months before your business operations start, as long as you have proof of your upcoming investments.
Operating a Business from Overseas?
If you run a business overseas but regularly sell goods or services in Thailand, the law requires your Thai representative to handle VAT registration on your behalf.
Who Doesn’t Need to Register for VAT?
You may not need to register for VAT if:
- Your revenue is less than 1.8 million Baht per year.
- You sell VAT-exempt goods or services, such as:
- Agricultural products and related goods (e.g., animals, fertilizers, animal feed, etc.).
- Newspapers, magazines, and textbooks.
- Domestic transportation services.
- Services related to exports within industrial estates.
- Oil transportation services by pipeline within Thailand.
- You are a foreign service provider without a local representative in Thailand.
- You only operate in Thailand occasionally.
Where Should You Register Your Company?
When it comes to choosing an address for registering your company, the location you choose matters for building credibility.
- Can you register a company or VAT at a condo?
Good news! You can now register your business and VAT at a condo. Just make sure the business type won’t disturb your neighbors, and you’re good to go! - What about a house?
If you live in a detached house, you might be able to use that address to register your company. However, your landlord might not agree to it, or the address might not appear professional enough for clients. A good business address should reflect positively on your company. An office space in a business district or city center can help boost your company’s credibility, but renting a full office space might feel unnecessary if you don’t need it daily.
The Best Solution for Registering Your Business Address
If you want a professional address for company registration, but don’t need a physical office, consider using a Virtual Office. With a Premium Virtual Office package, you can have a credible business address that meets all legal requirements—without the hefty office rent.
Start your journey to success with FOUND OFFICE.
