Integrity Legal

In a previous posting on this blog the issue of single person incorporation of Thai companies was discussed. Back in September of 2015 it was revealed that the officials with government offices such as the Ministry of Commerce and the Department of Business Development were reviewing the possibility of amending the existing corporate laws in Thailand so as to allow an incorporated entity such as a limited company to be owned by one individual person. This would be similar to legislation in countries such as the United States which allows individuals, acting alone, to set up structures such as limited liability companies on their own.

It recently came to this blogger’s attention that some new developments have taken place with regard to this topic. To quote directly from the website of The Nation Newspaper:

THE Business Development Department has reviewed a new draft law and added in the document that a foreign individual cannot register a business in the Kingdom. The move aims to prevent |foreign enterprises from competing against Thais in many businesses that should be preserved for Thais. The original draft, known as “one person, one company,” states only that a single person can register a business in Thailand.

As readers of this blog and website may be aware there are many provisions enshrined in Thai law designed to protect Thai enterprises from foreign competition in Thailand. Most notable is the Foreign Business Act which specifically designates the type of business activities which are restricted to foreign nationals. As the website of Coconuts Bangkok noted:

This addition to the draft is designed to keep foreign businesses from competing against Thai companies in the long list of industries that the government has deemed reserved for Thai nationals only.

The aforementioned list of industries is detailed in the provisions of the Foreign Business Act. Currently, Thai law requires that a limited company have at least 3 shareholders in order to be registered pursuant to Thai law. This proposed law would change those provisions. It appears that Thailand would be the third country in the Association of Southeast Asian Nations (ASEAN) to adopt this type of change while Malaysia is apparently reviewing similar legislation.

The final draft of this proposed law remains to be seen, but it seems logical to assume that easing of corporate regulation of Thai company structures will result in increased business activity.

It should be noted that pursuant to the terms of the US-Thai Treaty of Amity, it is possible for American citizens to own virtually 100% of their companies in Thailand notwithstanding the provisions of the Foreign Business Act. It remains to be seen how these changes to the law will impact the registration of so called Amity Treaty Companies.

Tags: 3 Thai shreholders, Amity Treaty Companies, Amity Treaty Company, ASEAN, ASsociation of Southeast ASian Nations, Corporate Law Thailand, Department of Business Development, Foreign Business Act, one person one company, Thai Corporate Law, Thai Foreign Business Act, Thai Ministry of Commerce, Thai shareholders, Thailand Foreign Business Act, Thailand Ministry of Commerce, Thailand shareholders, US-Thai Treaty of Amity
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