Can foreigners buy stocks in Thailand?

Thai limited company

A Thai limited company is subject to the Aliens Act, which states that foreigners are only allowed to own 49% of a Thai company. However, business formation experts in Thailand developed corporations with foreign shareholders who hold the majority of the voting rights in order to take control of the company. Therefore, while foreigners cannot own a majority of the shares, they can have a majority of the shareholders' votes to run the company. The articles of association can provide for such a management structure.

The Thai limited company also grants limited liability to its shareholders.

Thailand is a country in the center of the Indochinese peninsula of Southeast Asia. Its official name is "Kingdom of Thailand" and was previously known as "Siam".

Politically, Thailand is a constitutional monarchy with a democratically elected parliament. The Prime Minister is the head of government and chairman of the majority party. The king is the head of state who exercises sovereign powers through the courts, cabinet and parliament as prescribed in the constitution.


A Thai limited company offers the following advantages:
• Foreign control of companies: Although foreigners are only allowed to own 49% of the shares, they can have the vast majority of the voting rights of the shareholders and can be appointed as directors to manage and control the company.
• No minimum capital: There is no minimum capital.
• Limited Liability: Shareholders' liability is limited to their contributions to the share capital.
• English: English is a very popular language spoken by many citizens and local residents.

Name of the Thai limited company
Thai companies must select a unique company name that is not already in use by any other company in Thailand. The proposed company name can be reserved with the Department of Commerce for 30 days prior to filing an application for the new limited company.

Limitation of Liability
Shareholders' liabilities are limited to their deposits.

Corporate goals
Thai companies are required to provide a statement of their objectives that does not violate common decency and public order.

The Department of Commerce provides a standard list of typical business goals consisting of 40 regulations including owning real estate. Many new companies are simply adopting the standard form as their own goals.

The first three steps to registering a new company are:
• The first document submitted to the Department of Commerce is the drafted Memorandum of Association.
• Then all subscribed shareholders must pay in at least 25% of their value. This needs to be verified by a local bank, which shows the capital contribution.
• The organizers must prove that they hold at least one share in the company.

After the first three steps, the organizers demand an orderly gathering of subscribers. The agenda for the meeting includes:
• Adoption of the statutes;
• Confirmation of the promoter's actions and expenses;
• taking into account the compensation paid to the promoters;
• Appointment of Directors;
• Determination of preferred shares;
• Consideration of the number of shares allocated and the question of whether these were partially or fully paid up in cash or with assets of the same value;
• Election of an auditor and amount of remuneration.

After the meeting, the directors can start running the business. Payment of the shares is called.

Then the articles of association and a list of shareholders are submitted to the Ministry of Commerce. It may take 3 to 5 business days for the Department of Commerce to approve the list of shareholders and the articles of association.

Social contract
A articles of association must be drawn up and submitted to the Ministry of Commerce within 30 days of the approval of the new company. The memorandum must contain the following information:
• Company name and location;
• details of the company's objectives;
• Authorized capital, number of shares to be issued and nominal value; and
• The full name, address, nationality, age, occupation and signature of each promoter and the number of shares subscribed by each shareholder.

As noted above, 51% of the shares must be owned by Thai nationals and residents. The remaining 49% can belong to foreigners. A company must have at least 7 shareholders, who can be natural persons or companies of any nationality located in any location.

Only par value units may be issued and the minimum unit value is 5 baht (currently 15 cents USD). Shares can only be issued as ordinary or preference shares. The articles of association describe the rights associated with the preference shares.

Two classes of shares are recommended to protect foreigners:
1. The Thai shareholders have preferred stocks with restricted rights such as voting rights, restricted property rights and restricted dividends.
2. The overseas shareholders have common stock, which gives them greater rights, such as all voting rights, and better access to the assets. Higher dividends etc.

Unless the Articles of Association provide otherwise, the shares can be transferred without the consent of the other shareholders or the company. Both types of shares are transferred by issuing a share certificate. Both the transferor and the transferee must sign a document confirming the transfer of the shares. Each signature must be certified by at least one witness. As soon as the transfer of shares is entered in the shareholders' register, it becomes valid.

There are no minimum number of directors required. They can be of any nationality and live in any country. You don't have to be shareholders.

It is recommended that all directors be foreigners for greater control over the management of the company as resident directors are not required.

Authorized Directors
The law requires that at least one “authorized” director be selected from among the directors to sign documents on behalf of the company. This corresponds to a “legal representative” empowered to act on behalf of the company. Authorized directors can be of any nationality, but one or more should be resident in Thailand in order to be contacted by government officials to sign legal documents.

Minimum capital
No minimum capital is required.

However, in order to obtain a work permit for a foreign worker, the law requires a minimum capital of THB 2 million (currently USD 60,000) for each foreign worker.

Seat of the company
Every company must have a registered office in Thailand. This must be done before registering as a new business, registering with the tax authorities, applying for a foreign worker's work permit and opening a local bank account.

Trading accounts
All books and account records must be kept at the registered office. You must provide true and accurate accounting of the amounts received and spent by the company. The assets, liabilities, profits and losses must be shown on the books and accounts.

A company's auditor is required to review the balance sheet and report profits and losses and report to the general meeting of shareholders. An annual audit must be performed and a report filed with the Revenue Department of Commercial Registration.

The Thai corporate income tax rate is 20% for 2017.

Time for training
It can take up to two weeks for the entire formation and registration process to be completed and approved.


A Thai limited company offers these advantages: foreigners can have the majority of the shareholders' voting rights and all directors to control the company, limited liability, no minimum capital, and English is very popular.

Last updated on November 20, 2017