How can the thai nominee shareholder, enjoying 51% shares in my proposed company, be dangerous for me? i mean i learnt that thai nominee shareholders just get around 5000 THB or so, and then never come in any contact again. my lawyer says that he will get the agreement to sell shares, signed by the thai guy without putting date, so that i could transfer his shares to another thai guy if need arises.

my doubt is that, doesnt the thai government understand such practices and come up with some trouble for me? moreover does my money of 2,000,000 THB come into any danger anytime , by any mean, before or after formulation of the company?

Technically, the Ministry of Commerce as well as the Department of Business Development do not allow “nominees” in a company. By law, it has to be a genuine Natural Thai person or Juristic Thai person. There has been several laws prohibiting such. This is why a 6-month bank statement is required for every Thai Shareholder to prove that they have the actual funds to invest in the company and not acting as mere “nominees”. The government sees it as a way for foreigners to circumvent Thai law and gaining almost 100% control in a Thai company and therefore imposed restrictions on the matter.

Using “nominees” means that you are merely using a Thai person’s name to be put in your shareholders list and therefore has no real investment in your company. You, as the foreigner, will fund the investment in the company. However, by law, once the shareholders list (bor or jor 5) had been issued, it will reflect that the Thai Shareholder owns 51% of your “actual” investment in the company. Such person has access to your actual investment since they are legally declared as owning the 51%. In turn, such person may sell, transfer or dispose of the shares without having to consult you as the “real owner” of the investment.

While it is entirely valid to sign a sale agreement, it is almost fraudulent to put a blank date on the contract. Again, it boils down to circumventing the Thai Law. A question will arise whether this contract is enforceable or not. You may get away with it but if the Thai shareholder rescinds the contract or simply claim otherwise, it will result to a much complicated process.

As for the 2 million baht investment, it will be declared as assets of the company whether in form of cash or equipments, furniture and the like. It will remain property of the company until such time that the company is dissolved and all assets are liquidated then it will be returned to the shareholder according to the shares that they hold. If you will be the sole Managing Director of your company, you of course will have control over the management of the company. Likewise, the liability of the shareholders in a Thai Company is limited to the amount of investment they hold. It is not transferrable to their personal assets.