Region Area

News and developments

Capital Markets

New Regulations for Increasing the Capital of a Private LLC 

Order No. 1/2567 Provides New Compliance Rules for Companies with Over 5 Million THB Capital The Central Partnership and Company Registration Office has recently issued a pivotal directive: Order No. 1/2567. This new order, which supersedes the previous Order No. 1/2566, introduces significant changes to the regulatory framework for the establishment, capital increase, and mergers of limited companies in Thailand. By setting forth comprehensive criteria and detailed documentation requirements, Order No. 1/2567 aims to enhance transparency and accountability within the corporate sector.   Aligned with the provisions of the Civil and Commercial Code (CCC), the updated regulations are particularly impactful for companies with registered capital exceeding five million THB, mandating stricter documentation to substantiate capital contributions whether in cash, assets, or labor. These measures are designed to ensure that all financial transactions are thoroughly verified, thereby bolstering investor confidence and promoting a robust business environment.   1. Key Provisions and Documentation Requirements a. Establishment of Partnerships and Limited Companies  For the registration of limited companies with registered capital exceeding five million THB, documents are now required as follows:   Cash Contributions: Previously, only a bank certificate was needed to prove the payment of share capital. The new order requires an additional confirmation letter from the company, stating that the share payment has been received as shown in the bank document.   Asset Contributions: Previously, confirmation from the asset owner was sufficient. The new order mandates a detailed description of the assets. If the assets are registered, a copy of the ownership document must also be submitted.   Labor Contributions: The new regulations require a confirmation letter of the share payment with labor and supporting documents, such as a copy of the employment contract.  B. Increasing Registered Capital If the combined registered capital, both original and newly added, exceeds five million THB, the order mandates additional documentation as follows:   Cash Contributions: A bank certificate confirming the payment of the share capital for the increased amount and a confirmation letter from the company must be submitted.   Asset Contributions:   Registered Assets: A confirmation letter of the share payment and a copy of the ownership document must be submitted. If the assets are for use, a copy of the usage agreement and ownership document must also be submitted.   Unregistered Assets: A confirmation letter of the share payment or asset details and, in the case of assets for use, a copy of the usage agreement must be submitted.   Labor Contributions: A confirmation letter of the share payment with labor and supporting documents, such as a copy of the employment contract, must be submitted.   c. Mergers of Limited Companies Order No. 1/2567 introduces specific requirements for the registration of mergers of limited companies where the combined registered capital exceeds five million THB. These requirements ensure transparency and thorough documentation, similar to the guidelines for the establishment of companies and increasing registered capital, including new regulations of providing a confirmation letter stating that the payment for shares has been received, and the regulations of providing documents as aforementioned for labor contributions.   These measures ensure that mergers are conducted transparently and in compliance with the CCC, enhancing the overall integrity of corporate transactions in Thailand.  2. Implications for Corporate Registration The updated regulations mark a significant shift from the previous framework, where incomplete documentation could lead to the cancellation of registration entries related to capital. Under the new order, the registrar will only note that the required documents have not been submitted in the company’s certificate. If the documents are submitted later by, or the capital is reduced to five million THB or less, or the increased capital that comes along with the merger is reduced, the registrar will remove the note from the company’s certificate.   Through this comprehensive overhaul, Order No. 1/2567 not only modernizes the registration process but also aligns it with international best practices and the CCC. These changes reinforce Thailand’s commitment to fostering a transparent and efficient corporate sector. By ensuring meticulous documentation and validation of capital contributions, the new regulations bolster investor confidence and promote a robust business environment. As businesses navigate these new requirements, they will contribute to a more transparent and accountable corporate landscape in Thailand.    If you have any questions regarding your business registration, taxation matters or corporate compliance matters, please contact us at [email protected] or via  +66 (0)2 026 3284.   
14 August 2024
Immigration

Setting Up a Second Residence in Thailand

Setting up a second residence in Thailand has become a popular option for many high-net-worth individuals looking for a safe, stable, and convenient location to reside. With its favorable climate, world-class healthcare system, and vibrant culture, Thailand offers a unique and appealing lifestyle for those seeking a second home. However, before making the decision to establish a second residence, it is important to consider the legal and tax implications, as well as the family’s circumstances and priorities.
09 May 2023
Tax

"Shop Dee Mee Kuen" Offers 2023 Tax Deduction in Thailand up to 40,000 THB

According to a ministerial regulation (No. 386) issued on December 29, 2022, and a notification from the Director-General of the Ministry of Finance, a person liable to personal income tax (other than an ordinary partnership or non-juristic body of persons) is entitled to an income tax deduction under the "Shop Dee Mee Kuen 2023" program for certain expenses incurred for the purchase of goods and services from VAT registrants, provided that a full tax invoice is presented. This article details the items covered, what you need, and the time period covered.
02 February 2023
Real Estate

Short-term rental businesses via online platforms in Thailand

As the economy recovers from the COVID-19 crisis, Thailand is again attracting more and more tourists to the country. Visitor numbers are increasing, and short-term rental businesses through platforms such as Airbnb, including daily rentals via other online platforms, are gradually becoming more popular, encouraging villa and apartment owners to set up short-term rentals to allow tourists to stay in their properties.
11 January 2023
Cannabis

“HIGH” Standards in Thailand; Regulations to Unlock Cannabis Industry

In the wake of shared global challenges, tourism and green growth is the way forward for Thailand’s sustainable economy. Specifically, a relevant government panel has set up a plan to develop the country as an international hub and targeted Thailand as the world’s foremost destination for the medical industry and wellness tourism. Still, a dream without a plan is just a wish. In response, the legal scheme to transform Thailand into a comprehensive medical hub was initially implemented. Cannabis liberalization will further strengthen Thailand’s position as a global medical hub with affordable healthcare.
24 November 2022
Property

Government Regulations for Rental Business

Due to the increasing popularity of condominiums and apartments in the city, which comes with several issues related to rental and utility bills; as a result, the Contract Committee of the Consumer Protection Board has issued a new notification, the Stipulation of Residential Property Leasing as a Contract-Controlled Business B.E. 2562 (2019) (the “Notification”), published on 31 October, 2019, this new Notification has canceled the earlier Notification the Stipulation of Residential Property Leasing as a Contract-Controlled Business Contract-Controlled Business B.E. 2561 (2018).
09 November 2022
Property

Buying a House in Thailand – Handover Checklist

When the owner of residential property changes, the last step after the visit to the land office and the receipt of the money is crucial: the handover of the keys; after this, the previous owner moves out, and the buyer moves in. At this point, all documents are handed over, a joint tour of the house is made, and meter readings and defects are noted. It makes sense to draw up a protocol for the handover of possession so that the sale of the house does not have any repercussions. We have summarized what you should pay attention to in the house handover protocol.
09 November 2022
Property

How To Legally Rent Out A Property in Thailand

As part of the steady economic recovery from the COVID-19 crisis, Thailand is gradually attracting tourists back into the country. Due to the increased number of visitors, short-term rentals through platforms such as Airbnb, including daily rentals, are in high demand, encouraging villa and condominium owners to set up short-term rentals by allowing tourists to stay in their properties. However, it is important to understand the legal implications of setting up short-term rentals in Thailand as a host.
09 November 2022
Immigration

Thailand’s long-term resident visa (LTR) fee to be reduced by 50%

Thailand’s cabinet has decided to halve the long-term resident (LTR) visa fee, bringing it down to 50,000 baht. The visa is designed for foreigners who have “high capability or potential” and would like to live in Thailand for up to ten years. This means that eligible highly skilled foreigners can now apply for the visa and pay a one-time fee of 50,000 THB in order to stay in Thailand for up to 10 years.
09 November 2022
Corporate and Commercial

Setting up a Regional Office (RO) in Thailand

Under the Thai Foreign Business Act (“FBA”), A.D. 1999, foreigners who engage in certain business sectors, including any service business, require a Foreign Business License (“FBL”) to operate legally. However, under the new Ministerial Regulation of the Ministry of Commerce, a Regional Office is not considered a restricted business under the Foreign Business Act (FBA). Therefore, regional offices do not need to apply for a foreign business license to operate in Thailand.
27 January 2022
Mergers & Acquisitions

Purchase Price Provisions in M&A Transactions

One of the most important areas of regulation in the acquisition of a company is the purchase price provisions. This is an extremely complex issue in which various aspects have to be considered. In addition, the opposing perspectives of buyer and seller have to be reconciled. In this respect, various basic models and approaches have become established in M&A practice. These vary in complexity so that correspondingly complex procedures should only be applied in larger transactions, while others are more suitable for medium-sized company sales. A distinction must be made between regulations that govern the determination of the purchase price and those that define the payment modalities.
19 January 2022

Latest Legal Updates to Thailand 4.0

While Thailand slides deeper and deeper into economic crisis, the government’s  national development plan “Thailand 4.0”, which was already launched in 2016, remains one of  strategies for recovery and progress. Thailand 4.0 was implemented to enhance the worldwide competitiveness of Thailand’s business environment and drive the digitalization of its government to provide its citizens and businesses with more efficient public services. The digitalization of the private and public sectors aims to advance the country’s overall economic competitiveness. In addition to infrastructure projects, like the expansion of broadband or fixed internet connections and the launch of initiatives such as the Smart City Development project, Thailand 4.0 also includes a legal framework to support Thailand’s progressing digitalization.
19 January 2022
Real Estate & Property

Proposed Amendments To Thai Real Estate Law

Thai business media have reported that sources in the Thai government leaked information stating that laws and regulations on land ownership for foreigners could be set to change, so foreigners would have the option to buy and own a detached house, including the land on which the house is built, as long as the value of the home and land is at least 10 million THB. Also, the quota of condominium units that foreigners can own is expected to be increased from the current 49% threshold. Furthermore, the maximum terms for land leases are planned to be increased significantly.
19 January 2022
Mergers & Acquisitions

Signing and Closing in Mergers and Acquisitions (M&A)

Negotiations of business acquisitions are often complicated and drawn out. After successful contract negotiations, the parties are usually keen to complete the business purchase quickly. However, due to the complexity of such transactions, it is common practice that the actual economic transition takes place with a significant delay after the date of the signing of the contract. We outline the terminology surrounding business takeovers and the concept of “signing” and “closing” below.
19 January 2022
Tax & private client

Social Security Contribution Temporarily Reduced

Due to the recent second outbreak of COVID-19 in Thailand, the Thai government then restricted some businesses from operating, which results in an increase in unemployment or reduced income for most people. As a method to ease the burden, the Ministry of Labor published a new regulation on 30 December 2020 under the Social Security Act (“SSA”) in the Royal Gazette called The Regulation on Determination of the Amount of Contributions to the Social Security Funds B.E. 2563 (2020) (“Regulation”).
19 January 2022
Real Estate & Property

Taxes and Fees Related to the Sale of Immovable Property

When buying property in Thailand, in addition to paying the price of the property, one can also expect to pay other fees, duties, and taxes in order for the transfer of ownership to be complete. For people who are unaware of these extra costs, it can mean the difference between deciding whether or not to purchase a property. Before purchasing property, it is wise to consult a property lawyer and do the required due diligence to ensure that that title deed is correct, the owner’s name is present on the title deed, and the property’s size as described is correct.
19 January 2022
Restructuring & Insolvency

Company Dissolution in Thailand

Dissolution is the process of de-registering a company from the company registry at the Department of Business Development (“DBD”). When considering the life cycle of a business operation, the voluntary dissolution by the shareholders appears to be the usual way to end the company’s operations. There are several circumstances that will lead companies to the dissolution and subsequently, the liquidation process. Under Sections 1236 and 1237 of the CCC, a limited company may be dissolved by the following causes:
19 January 2022
Tax

Thai Cabinet Approves Long-Term Tourist Visas

On 15 September 2020, the Cabinet agreed to allow in foreign tourists who agree to go through a 14-day quarantine and stay for at least 90 days to help stimulate Thailand’s economy. Prime Minister General Prayut Chan-o-cha said that the government would issue special tourist visas for long-stay visitors. The most critical condition would be a 14-day quarantine. He also said that “visitors can arrive for tourism or health services, and they can stay at alternative state quarantine facilities, specific areas, or hospitals that function as quarantine facilities.”
09 October 2020
FRANK Legal & Tax