Thailand Strengthening Anti-Nominee Measures

Recently the Department of Business Development of Thailand issued an Order of Partnership and Company Registration Office of Bangkok No. 205/2555 dated 22 November 2012 concerning newly established companies in Thailand which have Thai shareholders or foreign authorized directors. Under the Foreign Business Act B.E. 2542 (1999), foreigners are not allowed to undertake certain business activities in the Country. The Act also broadly prohibits Thai nationals from soliciting foreigners engaging in those restricted businesses, so-called “anti-nominee measure”. The Order is aimed to strengthen this anti-nominee measure whereby Thai shareholders are required to present financial records or supporting documents to the registrar upon the registration for incorporation in order to prove that they are genuine investors rather than “nominees”.

The new order can be summarized as follows:

1. Thresholds for Thai shareholders required to present financial evidence, if a newly established company is:

a) A company which has foreign individuals and/or entities holding shares up to 49% of the total issued shares; or

b) A company which has all Thai shareholders but foreign individuals are appointed to act as directors having authority to sign any documents to bind the company, regardless whether a Thai director may jointly sign the documents.

2. Financial evidence to be presented to the official upon the incorporation registration.

A financial document or credit advice issued by a commercial bank only.

Remark: The financial evidence must indicate that the Thai shareholders have sufficient investment amount in proportion
to their share subscription.

For more information, please contact:

Kan Ruksasook

Siriwasar Sitthichai