Thai Ltd Company With 100% Foreign Shareholders

[simon43]

The SunbeltAsia website provides information about registering a ltd company in Thailand. Whilst I understand the requirements for registering a 'Thai' company (at least 3 shareholders and at least 51% of the shares must be held by a Thai shareholder), I'm not clear about this statement on the website:

'Shares can be owned 100% by foreigners who can be individuals or entities'

So how does that work? Assuming that the business type doesn't fall under the Alien Business Act, what are the requirements?

Specifically, my Thai ex is sole proprietor of a 'guesthouse' business in Phuket. (I say guesthouse so as to exclude it from the definition of a hotel management business, which seems to apply only to businesses with more than 10 letting rooms).

We now want to change from Thai sole trader to limited company, where I hold 50% of the issued shares and the remaining 50% are equally split between 5 shareholders who may or may not be Thai. My ex will no longer be a shareholder or owner of the business, (since she will receive the investment capital from the 5 minor shareholders).

Is it possible to register a limited company with such a shareholding structure, where there is no majority Thai shareholder, or possibly no Thai shareholders at all? What are the important pros and cons of this type of company structure, and can you suggest a better company structure? Note that I'm British, so no options available under the Thai-Amity agreement.

Simon

[SunbeltAsiaExpert]

Not in all cases does a foreigner qualify for 100% ownership of a Thai corporation. It depends on the nationality of the foreign shareholder and on the business objective(s).

For a business objective of operating a guesthouse in Thailand you do not qualify for 100% foreign ownership without a Thai individual or corporation holding 50.01% of the shares.

BOI could be a option if you were investing in a 100+ room hotel in certain regions of Thailand. Such a project must start from scratch, which means that you cannot simply be investing in an existing hotel business and still qualify under BOI.

Unfortunately, there no Treaty between Thailand and England that is similar to the US-Thai Amity treaty.

You are looking for an option other then applying for the Foreign Business license.

If you plan on continuing to operate the guesthouse this is not a business objective which allows majority of foreign shares. You cannot own 50% of the shares as a foreigner in such a Thai corporation.

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