Doing Business in Thailand: Legal Services for Thai Companies

Corporate law in the Kingdom of Thailand can be very difficult to understand for those who are unaccustomed to Thai culture and the legal tradition of the Kingdom of Thailand. Many from so-called “Common Law” jurisdictions find Thailand’s “Civil Law” system confusing. This combined with the fact that corporate law in Thailand, and the regulations arising from the government’s enforcement and application of said law, is constantly evolving and many foreign nationals are left feeling that the Thai legal system is arbitrary, if not capricious. In contrast, Thai law is relatively easy to understand for those Thai legal professionals who have studied and practiced it, but oftentimes translating Thai legal concepts for foreign nationals is difficult for Thai lawyers. Therefore, firms with “Common Law” trained lawyers on staff can provide a much needed benefit to their clients when it comes to communication.

Under Thai law, a foreign national cannot own more than 49% of a Thai company doing business in Thailand unless the company receives a Foreign Business License, certification from Thailand’s Board of Investment (BOI), certification under the provisions of the US-Thai Treaty of Amity, or certification pursuant to the provisions of a Free Trade Agreement concluded between the foreign national’s country of nationality and the Kingdom of Thailand. That being said, foreign minority investors in a Thai company may be able to enjoy disproportionate voting rights compared to their Thai counterparts. The legal structuring of a Thai company so as to allow for the enjoyment of disproportionate minority voting rights should be left in the hands of a competent Thai lawyer as the regulations that can impact this type endeavor can be very complicated.

At the time of this writing, corporate certification pursuant to the terms of the US-Thai Treaty of Amity is a very popular subject among American companies, or investors, wishing to conduct business in the Kingdom of Thailand. This is largely due to the fact that the provisions of the Treaty allow duly certified companies to conduct business with “National Treatment,” thereby avoiding certain foreign ownership restrictions imposed under relevant sections of Thai law, most notably the Thai Foreign Business Act. However, there are restrictions within the language of the Treaty of Amity and therefore, those wishing to obtain Treaty Certification should consult a law office in Thailand in order to ascertain if the company’s proposed activities would be permitted under the provisions of the Treaty.

There are many types of Thai corporate structures including, but not limited to: Partnerships (Limited and Unlimited as well as Registered and Unregistered), Limited Companies, Associations, Public Limited Companies, and Sole Proprietorships. When making a decision with regard to the type of corporate structure to be used when conducting business in Thailand it is advisable to contact a Thai law firm in order to receive competent advice and counsel.