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Corporate Shareholder Requirements & Single Shareholder Thai Companies

Transcript of the above video:

In this video, I’m briefly going to discuss shareholder requirements  under current Thai law with respect to corporations in Thailand and the possibility  of possible future  single shareholder entities in Thailand as that’s been discussed here recently as a possibility in the future.

So, just a sort of prelude, please understand, I am an American attorney. I have Thai counterparts here at the firm; they are Thai licensed attorneys, Thai accountants, corporate services folks, admin folks. These folks are going to deal with a lot more of this on a day to day basis. I deal with a lot of Amity certifications under the provisions of the US-Thai Treaty of Amity so I come across some of this information in the sort of the course of doing what my component part of dealing with some of our client matters is. But that being said, one of the things, one of the  requirements, one of the formal requirements in a lot of ways, Thai corporate law is much more formalistic than when compared to say US law, or presumably UK law that I am aware of when it comes to corporations here in Thailand. One of the formalities under Thai law is that companies must have a minimum of 3 shareholders in order to be considered to be formally viable for incorporation. Now it should be noted that up until the turn of the millennium it used to be that it was required that all companies had 7 shareholders. That was changed pursuant to the provisions of what later became known as the foreign business act, as amended, and basically the seven shareholders is no longer a requirement, now it’s a 3 shareholder requirement. But that being said, 3 shareholders is the formal minimum, it is what is required in order to incorporate a Thai corporation. So leaving that aside, there has also been discussed the possibility, in recent news articles that I’ve read, of allowing incorporation of so called single shareholder limited companies here in Thailand. Now this would reflect overall trends in say the United States and other Commonwealth jurisdictions which are allowing limited liability companies to go ahead and have member managed, or manager managed or single, just essentially what used to be called sole proprietorships, but with limited liability.  LLC’s that would just essentially be a single person cloaked in limited liability, depending on the laws of the given jurisdiction in the United States.  Thailand has been sort of , it seems like various government are toying with this idea but that being said, in virtually every discussion I’ve seen where this has come up it appears that if this were to happen, at least initially such entities would only be available to those of Thai nationality. 

Now this is somewhat similar to other situations where essentially, effectively, only a Thai national can enjoy the use of a legal construct in Thailand and there are things like registered and unregistered partnerships as well as sole proprietorships; those are effectively only going to be enjoyable by a Thai national.  But that said, it has been discussed to have a single shareholder limited company here in Thailand. Whether this comes to fruition or not remains to be seen but as it sits right now, 3 shareholders are currently the formal requirement and the legal requirement in order to go ahead and incorporate a limited company. Those seeking the Amity certification for said company again are still going to need to deal with all the corporation requirements pursuant to Thai laws so again, it doesn’t look like this is going to change any time in the near future. We’ll obviously have an update on this channel if it does but as of now, currently, single shareholder limited companies are possible, they’ve been discussed but as of yet, it has not as yet been promulgated as Thai law, so it remains to be seen.