Thailand-Company Formation


Company Formation process in Thailand is easier but need to follow some rules and laws of the country especially in case of foreign investor.

Foreign Company Registration in Thailand is possible (100% Foreign Investment, Joint Venture, Virtual/ Branch/ Liason Office, Foundation), let’s see how they are doing business in Thailand and generate revenue.

There is many opportunity of investment in different sectors. All government gives priority to foreign investment to start business in Thailand.

Company Registration/ Formation/ incorporation in Thailand, FDI in Thailand,S & F Consulting Firm Limited, Email: contact@sfconsultingbd.com, Skype: forhadhossain79Company Formation in Thailand, Foreign Company Registration in Thailand

Representative Office in Thailand
In order to form a representative office, at least one of the following purposes would need to be sought for the purposes of limited “non-trading” activities.
• The business is to source goods or services in Thailand for the headquarters.
• To check the product ordered by the headquarters overseas
• To give advices to the headquarters about the goods to order
• To supply the information of the headquarters’ products to the customers in Thailand
• To report the economic movement in Thailand to the headquarters
• To fully understand the conditions which pertain to a representative office in Thailand, contact any of our Thai lawyers or any of our foreign lawyers to provide you with guidance when considering to open a reprehensive office in Thailand.

Branch Office Setup in Thailand
The structure of the branch office under Thai law is similar to Thai company limited, it still be governed by the FOREIGN BUSINESS ACT B.E. 2542 (FBA). That means there is no requirement of multinational companies to establish a branch office in Thailand, but in the case that the activities of the branch office fall into one of the categories under the FBA, it is definitely required for a Foreign Business License (FBL).

Unlike the representative Offices and Regional Offices, Branch Offices under Thai law are not limited to the “non-trading” activities. They are allowed to earn income. The Branch Office’s liabilities arising from the action of the business in Thailand will not be limited within Thailand but extend to the head office oversea.

According to the approval of a Foreign Business License, the capitalization will be calculated from at least 25 percent of average estimated expenses for first 3 year but not less than 3 million baht.

Regional Office registration in Thailand
Regional offices are different from branch offices in terms of their structure. Regional offices, are not separate legal entities that perform their businesses in Thailand on behalf of its head office abroad. Likewise, they are limited to perform 7 specific activities only. These activities fall under List three of FOREIGN BUSINESS ACT 1999 (FBA). These are:

Regional offices are likewise required to apply for Foreign Business. Before beginning their activities in Thailand, foreign companies should have at least one active branch office or affiliate in Asia. Moreover, regional offices are also restricted from earning income, purchasing, selling, and negotiating.

Capitalization rules under the FBA also apply to the regional offices. It must be at least 25percent of the average estimated expenses for the first 3 year but not less than THB 3,000,000.

Mergers & Acquisitions in Thailand
There is merger when two companies in Thailand where two companies join together to form a new business organization. On the other hand, an acquisition refers to the process of purchasing another firm. Acquisitions are also known as takeovers and could be both friendly and hostile, most especially if the company being taken over is unaware of the process.

STAGES IN MERGERS & ACQUISITIONS.
Parties enter into a Memorandum of Understanding (MOU) or Letter of Intent (LOI). In this stage, the confidentiality terms along with the binding terms should be stipulated under MOU.

The buyer checks various issues within the target company via due diligence concerns with the business, property, legality and finance, etc.

After due diligence process, parties enter the buy-sell negotiation. Any concerns from the due diligence will be negotiated and settled.

Parties prepare the Sales and Purchase Agreements and any other related documents ready to be signed and affixed the company seal. The signed agreements are validated under Civil and Commercial Code of Thailand.

Procedure of Merge & Acquisition
Each company invites their shareholders to a meeting and conducts a special Resolution of merger with the vote of not less than ¾ of the total shares of those present in the meeting. Fourteen (14) days before the meeting, a notice must be mailed to the shareholders detailing the meeting announcing it in the local newspaper.

Each company registers a Special Resolution of merger within 14 days after obtaining such resolution.

Each company advertises the intention to merge in a local newspaper at least once.

Each company has to send a registered mail to their company to have an opposition within 60 days.

After 60 days of sending such announcement or notification, a shareholders meeting for both companies must be considered for any details of the newly merged companies.

The new merged company could be registered within 14 days since the merged resolution is approved.

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