Corporate Law at Thailand
Corporate law in Thailand is governed by a structured legal system designed to facilitate both local and foreign business activities. It emphasizes transparency, investor protection, and regulatory oversight. Below is an in-depth overview of the corporate law framework in Thailand:
🇹🇭 Overview of Corporate Law in Thailand
⚖️ Key Legal Frameworks
Civil and Commercial Code (CCC)
The main law governing companies in Thailand.
Covers partnerships, limited companies, shareholding structure, directors’ duties, and corporate dissolution.
Public Limited Companies Act B.E. 2535 (1992)
Applies to companies offering shares to the public or listed on the Stock Exchange of Thailand (SET).
Foreign Business Act B.E. 2542 (1999)
Regulates foreign ownership in Thai businesses.
Requires a Foreign Business License (FBL) for foreign majority ownership in restricted sectors.
Securities and Exchange Act B.E. 2535 (1992)
Regulates capital markets, IPOs, and listed companies.
Overseen by the Securities and Exchange Commission (SEC).
Investment Promotion Act
Administered by the Board of Investment (BOI), offering incentives to foreign and local investors.
🏢 Types of Business Entities
Sole Proprietorship
Ordinary Partnership
Limited Partnership
Private Limited Company (Co., Ltd.)
Most common business entity.
Requires at least 2 shareholders (previously 3, now reduced).
Liability is limited to share capital.
Public Limited Company (PLC)
Can offer shares to the public.
Must have at least 15 shareholders and 5 directors.
Branch Office / Representative Office / Regional Office
For foreign companies operating in Thailand.
🧩 Corporate Governance Structure
For Private Limited Companies (Co., Ltd.):
Shareholders hold general meetings and vote on key matters.
Managed by one or more directors (not required to be Thai nationals).
No mandatory board committees unless stated in the Articles of Association.
For Public Limited Companies (PLC):
Stronger requirements for transparency and disclosure.
Must appoint an audit committee, internal auditor, and maintain corporate governance standards set by the SEC and SET.
🌐 Foreign Investment & Restrictions
Foreigners can own up to 49% of a Thai company in sectors restricted under the Foreign Business Act unless:
The business is promoted by the BOI.
The company operates in non-restricted sectors.
A Foreign Business License (FBL) is granted.
BOI incentives include:
Tax holidays
Exemption from import duties
Land ownership rights
Eased visa/work permit processes
📊 Regulatory Authorities
Department of Business Development (DBD) – Company registration and general corporate compliance.
SEC (Securities and Exchange Commission) – Regulates public companies and capital markets.
BOI (Board of Investment) – Handles investment incentives.
Bank of Thailand (BOT) – Oversees financial institutions and foreign exchange controls.
🛡️ Corporate Compliance & Reporting
Annual General Meeting (AGM) must be held within 4 months of the end of the fiscal year.
Financial statements must be audited and submitted annually to the DBD.
Public companies have more extensive disclosure and corporate governance obligations.
🔍 Key Trends in Corporate Law
Amendments to the Civil and Commercial Code to make doing business easier (e.g., reducing the number of shareholders required).
Digital company registration and online filing through DBD.
Increasing transparency and anti-corruption enforcement.
Promotion of ESG standards, particularly for listed companies.
RELATED Blog
0 comments