{"id":9543,"date":"2025-06-20T13:24:26","date_gmt":"2025-06-20T06:24:26","guid":{"rendered":"https:\/\/fdi.co.th\/?p=9543"},"modified":"2025-06-20T13:46:10","modified_gmt":"2025-06-20T06:46:10","slug":"%e0%b8%97%e0%b8%b3%e0%b8%98%e0%b8%b8%e0%b8%a3%e0%b8%81%e0%b8%b4%e0%b8%88%e0%b8%ad%e0%b8%a2%e0%b8%b9%e0%b9%88%e0%b9%81%e0%b8%95%e0%b9%88%e0%b9%80%e0%b8%9b%e0%b9%87%e0%b8%99%e0%b8%9a%e0%b8%b8%e0%b8%84","status":"publish","type":"post","link":"https:\/\/fdi.co.th\/en\/blog\/%e0%b8%97%e0%b8%b3%e0%b8%98%e0%b8%b8%e0%b8%a3%e0%b8%81%e0%b8%b4%e0%b8%88%e0%b8%ad%e0%b8%a2%e0%b8%b9%e0%b9%88%e0%b9%81%e0%b8%95%e0%b9%88%e0%b9%80%e0%b8%9b%e0%b9%87%e0%b8%99%e0%b8%9a%e0%b8%b8%e0%b8%84\/","title":{"rendered":"Which is more suitable: running a business as an individual or registering as a juristic person?"},"content":{"rendered":"
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For Thai entrepreneurs who start their businesses on their own\u2014whether selling online, freelancing, running a shop, or providing various services\u2014the sole proprietorship form is more popular because it is convenient and easy to start. However, as time passes, income grows, and the business expands, tax planning and credibility become important issues. This raises the question: should you register as a juristic person? And which option is more suitable for your business?\u00a0<\/span><\/p>

This article will analyze the pros and cons and provideecommendations to help entrepreneurs make the most appropriate decisions based on their<\/strong>current business situations, ensuring smoother business operations.\u00a0<\/span><\/p>

Which type of juristic person registration is suitable for our business?<\/b><\/h1>

Understanding the basic differences between a \u201csole proprietorship\u201d and a \u201cjuristic person.\u201d\u00a0<\/b><\/h3>

Individual <\/b>It means that an individual runs a business in their own name, such as selling products online, opening a phone repair shop, or doing graphic design work. They can register a trade name for the store, but the owner remains personally responsible for all aspects of the business, including profits, debts, and tax obligations.<\/span><\/p>

Thai law. <\/b>It refers to an organization with a legal status separate from the individual, such as a limited company or limited partnership. This requires registering as a juristic person with the Department of Business Development, maintaining systematic accounting, and having limited liability according to the invested capital.<\/span><\/p>

Comparison of the advantages and disadvantages of each business structure to consider:<\/b><\/h2>

\"\"<\/p>

\u00a0Things you need to consider before registering a company, based on accounting and tax factors.\u00a0<\/b><\/h2>

1. Consider the current applicable tax rates.\u00a0<\/b><\/p>

You need to compare the personal income tax rates you currently pay, which range from 5% to 35%, with the maximum corporate income tax rate of 20%. If your personal income tax rate exceeds 20%, this could be a reason to consider registering a company.\u00a0<\/span><\/p>

2. Operating as an SME juristic person (SME company).\u00a0<\/b><\/p>

The Revenue Department has established special provisions for SMEs to alleviate tax burdens and improve cash flow for juristic persons operating as small and medium enterprises. These provisions are designed to encourage investment and include the following main conditions:\u00a0<\/span><\/p>

2.1 Registered and paid-up capital not exceeding 5 million baht, and\u00a0<\/span><\/p>

2.2 Having revenue from the sale of goods and services not exceeding 30 million baht.\u00a0<\/span><\/p>

3. When the business income reaches the VAT registration threshold of 1.8 million baht.\u00a0<\/b><\/p>

Once VAT registration is required, it is based on the business\u2019s revenue, not profit. Whether as an individual or a juristic person, if annual revenue from the sale of goods and services exceeds 1.8 million baht, VAT registration is mandatory. This affects tax obligations, including issuing tax invoices upon sales, preparing input and output tax reports, and submitting the VAT return form (Por.Por.30) to the Revenue Department every month.\u00a0<\/span><\/p>

These three main accounting and tax factors will help you understand and decide whether to register a company or continue operating as a sole proprietorship.\u00a0<\/span><\/p>

Analysis from the \u201ctax\u201d perspective: a factor that many people often overlook.<\/b><\/h2>

One of the key differences is the tax rate, which directly affects the net profit of the business. Therefore, understanding how to establish an efficient accounting system and proper tax planning is crucial for business operations.\u00a0<\/span><\/p>

For sole proprietors (individuals)<\/b><\/h3>

They must file taxes under the personal income tax system, which uses a progressive rate: the higher the income, the higher the tax rate, ranging from 5% to 35%.\u00a0<\/span><\/p>

Read on! With this amount of income, here\u2019s how the tax is calculated.\u00a0<\/span><\/a><\/p>

For juristic persons (companies)<\/b><\/h3>

If registered as a juristic person, such as a company or limited partnership, corporate income tax will be applied at a fixed rate.<\/span><\/p>