Integrity Legal

Many people come to Thailand and make the decision to start a small (or not so small) business. Thailand has a very relaxed way of life, but when it comes to Thai company registration, the pitfalls can be many. Incorporating a Thai company can take a great deal of time and cause a great deal of frustration, but with the proper legal advice the process can be quite smooth, if not pleasant.

Types of Thai Company Structures

There are many different types of Thai corporate structures: Thai Limited Partnerships, Thai Unregistered Partnerships, Thai Public Limited Companies, and many others. We will mainly focus this piece on the Thai Limited Company. A Thai limited Company is very similar to incorporated entities in the USA. A Thai limited Company has one or more directors and a Managing Director, Thai limited Companies also have shareholders, but the Thai shares are not publicly traded and generally Thai shares are held by relatively few people. As the name suggests, Thai limited Companies have limited liability and are legal entities under Thai law. This means that in the eyes of the Thai legal system the Thai limited company is a person and will only be held liable for funds held in the company name.

Thai vs. Foreign Companies

Under Thai law, a Thai company must be 51% Thai owned in order to engage in most types of business. Otherwise, the Foreign owned company must obtain a foreign business license in order to conduct most types of business in Thailand. There are exceptions to this rule, the main exception being that a Thai company with a majority of American shareholders can petition for protection as a Thai Treaty of Amity Company.

Use of preferred voting shares to control a Thai company

Even if the majority of a company is owned by a Thai, it is possible for a foreigner to retain control of the Thai company through the use of voting stock, or preferred shares. This means that the shares of the company that the foreigner holds would have a disproportionate amount of voting rights and therefore the foreigner could annually vote himself into a Managing Directorship and thereby control the Thai company.

When doing business and registering Companies in Thailand it is often necessary to retain the services of a Bangkok Lawyer especially where sophisticated Thai corporate structures are being sought.

Thanks for reading the Integrity Legal Blog

Note: None of the above content should be used in lieu of legal advice from a competent Attorney in the jurisdiction one wishes to conduct business

Tags: Doing Business in Thailand, Thai Company Registration, Thai Company Setup, Thailand Business