Integrity Legal

In a recent article in the Bangkok Post it was reported that the current government in Thailand is taking measures to foster growth for small to medium sized enterprises (SMEs) in Thailand. It would appear that the present government is eager to provide encouragement for small and medium sized businesses in Thailand. Furthermore it seems as though Thai officials are attempting to position the country as a location of choice for small business start-ups within the greater framework of the Association of Southeast Asian Nations (ASEAN) and the ASEAN Economic Community (AEC). However, of particular interest to this blogger was the mention of possible rule changes with regard to Thai corporate regulations pertaining to Thai Company registration and the shareholdings thereof. To quote the aforementioned article directly:

Mr Pongpun said the authorities were improving regulations on the incorporation of private companies to allow the incorporation of a juristic person registered by only one person.

At present, corporations (also referred to as juristic persons) in Thailand must have a minimum of three (3) shareholders in order to incorporate under Thai law. It should be noted that prior to an amendment to Thai corporate law at approximately the turn of the century it was required that all companies registered in Thailand have a minimum of 7 shareholders in order to incorporate pursuant to Thai law. Many at the time felt that the 7 shareholders requirement was too cumbersome and for that reason the statutorily required number of shareholders was reduced to 3. Since then, there have been those who have noted their belief that allowing Thai corporate structures with only one shareholder would bring Thai corporate law more in line with similar bodies of law globally. For example, in many American jurisdictions Limited Liability Companies or LLCs are only required to have one member/shareholder, while similar Limited Company (Ltd.) structures are allowed in Britain and the Commonwealth nations and many European jurisdictions allow for similar corporate structures as well.

It remains to be seen whether Thai corporate law will be amended to allow for single shareholder corporations in Thailand. It is a good sign that such structures are being considered by Thai officials especially since such structures would be especially beneficial to small business owners in Thailand. Of special note to American readers, pursuant to the provisions of the US-Thai Treaty of Amity it is possible for American Citizens to own 100% of an Amity company registered in Thailand. Should the aforementioned changes take place it could result in Americans being able to own their small business singularly without any Thai shareholders.

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