Are You A Sexpat Or Do You Ride The Backwards Morality Train?

[Gopro]

If memmebrs could help with some advice.

My understanding of owning a thai company requires 3 directors. 49%/51%

1- Can the company directors be an entity i.e say a foreign company or do they have to be induviduals

2 - If only induviduals allowed and you don't have any partners, and your a solo owner(director). Do you use your lawyer and his office as the other directors?

3 -If you use the lawyer, isn't that illegal by using nominee directors?

4. Can you really trust your lawyer in thailand to be a nominee?

Thanks

[samuilongtime]

Unfortunately lawyers are needed for company set up in Thailand I would not trust many if any of them as a lot of them especially in Ko Samui are sharks.

I have lived in Samui for a very long time and have heard of numerous cases of people being stitched up by unscrupulous lawyers.I could not think of a worse

nominee than a lawyer,one reason being that if you die without a will or even if you have one the lawyer(thai) if it is a 3 person set up will automatically inherit 51%of the company.I would have thought that one Thai nominee and another farang (family member) that do not know each other and have nothing to do with your lawyers office would be a better way to go,this is just my opinion from the horror stories I have been told.

[Naam]

My understanding of owning a thai company requires 3 directors

your understanding is wrong. nowdays a Thai company requires three shareholders (used to be seven) and one director. it is also common practice that the "controlling" shareholder has undated signed documents from the other shareholders relinguishing their shares.

[fletchsmile]

As Naam says I think you're mixing up shareholders and directors. If talking about shareholders, for your Q's:

1. Shares can be held in a company name, where one company owns shares in another

2. Your lawyer can be a shareholder

3. If they actually pay for the capital then it's not illegal - BTW layers can be directors too, and some people do that

4. Depends on your lawyer.

What Naam describes is common practice. It's not strictly legal though.

A better way is to have the Thai shareholders as preference share holders, where the share pays a reasonable fixed rate dividend, but the shares have limited voting rights.

So you as the person running the business own the ordinary shares which have most of the voting rights, control the busines and the right to all profits after tax once the preference dividend is paid. This route is legal and solves your problem at a small cost of the rate on the preference shares dividend.

My wife is a Thai shareholder in a firm with exactly this structure. She legitimately paid for the preference shares as the dividend rate was attractive. You will in practice need a Thai to be a director as well to sign various paperwork.

Cheers

Fletch

Edited May 22, 2013 by fletchsmile

[BrianCR]

Naam, you're right but, remember that if another western company owns 49% it becomes a branch office of the parent company. Completely different ball game involving paid up shares and taxation!

[Naam]

Naam, you're right but, remember that if another western company owns 49% it becomes a branch office of the parent company. Completely different ball game involving paid up shares and taxation!

a western (foreign) company cannot be a shareholder in a Thai company except in those companies approved by the Board of Investment.

[Gopro]

Thanks for your replies.

In relation to a foreign company owning shares, can't this been seen as just share ownership rather then "branch office"

e.g Ford US buys into NikeThailand as a shareholder, does this not mean it's not a branch office but investor/shareholder?

And not to confuse shareholders with directors -Can the director be a Foreign entity or does it have to be an induvidual?

[Naam]

Can the director be a Foreign entity or does it have to be an induvidual?

a director has to be a natural person, that is international rule and not Thai specific.

[Naam]

Ford US buys into NikeThailand as a shareholder, does this not mean it's not a branch office but investor/shareholder?

why would buying shares create a branch office?

[yoshiwara]

Government spokesmen have on a number of occasions pointed out that company structures established as a means to avoid the spirit of the law eg foreigners setting up companies buying houses are frowned upon. Whether any action or not has been taken to date there is a risk that what is essentially a loophole may at some time come under pressure.

Edited May 23, 2013 by yoshiwara