OVERVIEW OF THAI BUSINESS-RELATED LAWS

 

Core Restrictions on Foreign Investments

 

Available Business Vehicles

Juridical Entities

  • Limited Company

  • Public Limited Company

  • Registered Ordinary Partnership

  • Limited Partnership

Non-Juridical Bodies

 

BOI"s Investment Promotion

 

Mergers and Acquisitions

 

Labor & Employment

 

Taxation

 

Dispute Resolution

 

 
 

AVAILABLE BUSINESS VEHICLES

 

In Thailand, there are several business vehicles available, both for economic and non-economic businesses and in a juridical and non-juridical forms. We highlight only those economic businesses, separated into juridical entities and non-juridical entities.

 

JURIDICAL ENTITIES

 

A juridical entity in Thailand can be established only by virtue of laws and is basically required to be registered with the competent authority to validate and perfect the incorporation.

 

Limited Company

 

There are two types of companies in Thailand, i.e. public company and private company.

 

A priviate company is required to at all times have at least 3 shareholders, whose liabilities will be limited to the amount of shares subscribed or held by them only.

 

Incorporation Process

 

To establish a company, the name of the company must be reserved with the Department of Business Development, Ministry of Commerce (DBD). Once the name is approved, the Memorandum of Association (MoA) of the company will be filed with the DBD, containing the following particulars:

 

  • Name and location of the company

  • Objectives of the company

  • Amount of capital, divided into shares, and the par value of the shares

  • Name, address and occupation of each promoter, who needs to hold at least 1 share upon registration of the incorporation, and number of shares subscribed by them.

 

The government fees for registration of the MoA and incorporation is currently fixed at ฿500 and ฿5,000, respectively.

 

After the registration of the MoA and subscription of the whole registered shares, the promoters are required to call a statutory meeting to transact the following businesses:

 

  • Adoption of the articles of association or by-laws of the company, if any

  • Ratification of any contracts executed and any expenses incurred by the promoters in promoting the company

  • Fixing of the amount, if any, to be paid to the promoters

  • Fixing of the number of preference shares, if any, to be issued, and the nature and extent of the preferential rights attached to them

  • Fixing of the number of ordinary shares or preference shares to be allotted as fully or partly paid-up otherwise than in money, if any, and the amount up to which they shall be considered as paid-up

  • Appointment of the first directors and auditors and the fixing of their respective powers

 

After the statutory meeting, the promoters will hand over the business to the appointed director(s). The director(s) is/are required to then cause the promoters and subscribers to pay forthwith upon each share payable in money such amount not less than 25% of its par value. The director(s) can file the documents for incorporation of the Company with the DBD upon receipt of the called share amount in full.

 

This normal process will take around 1 month. Alternatively, the directors may, upon completion of all the following steps upon adoption of the memorandum of association, apply for registration of the MoA and incorporation of the company on the same day.

 

  • Having all registered shares of the company subscribed

  • Holding a statutory meeting to consider the business specified above, at which all promoters and subscribers of shares have to be present and the business transacted to be approved by all promoters and subscribers

  • Having the promoters hand over the business to the directors 

  • The directors causing the subscribers to pay the amount for each share and the amount being paid in full

 

By this alternative, incorporation of a company can be completed within a few days.

 

 

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