Foreign Direct Ownership at the Time of Incorporating in Thailand

By John P. Formichella

john@fosrlaw.com

Rule or policy changes at the Ministry of Commerce, however slight, may have material effects on the incorporation process in any jurisdiction. Registering a limited company at the Thai Ministry of Commerce (MOC) does not normally require submission of any document issued by a bank as supporting evidence. However, in certain cases, such supporting evidence is necessary.

Submission requirements (Guidelines) were issued by the MOC’s Central Partnership & Company Registration Office on 01 April 2015.

Under the Guidelines, registration of a limited company with an initial capital exceeding THB 5,000,000 (Five Million Thai Baht) requires submission of a document issued by a bank, which certifies receipt of cash contribution by an authorized director. Where the registered capital of the company exceeds THB 5,000,000, the Guidelines also apply to the registration of a capital increase.

The MOC has also set tighter rules on the incorporation of a limited company if there is foreign direct ownership at the time of incorporation. In the event that a foreigner either (i) holds one (1) share in a limited company or (ii) is an authorized director of a limited company, every Thai shareholder of the company has to submit a document issued by a bank certifying or showing his/her financial status. In this regard, the document must show a total balance that is consistent with the amount of cash that each Thai shareholder contributed to the incorporation.

This article contains information in summary form and shall be understood as general information only. It is not to be understood as and is not to be relied upon as legal advice.

© John P. Formichella. All rights reserved.