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What are the main company laws in Thailand?
Thai law governs company operations in Thailand through a complex and highly regulated legal framework that affects every stage of a business’s life cycle. From incorporation and capital structuring to daily operations, governance, restructuring, and dissolution. Thai company law goes beyond procedural rules and imposes binding obligations that expose directors, shareholders, and investors.
Both Thai and foreign investors require a clear and strategic understanding of company law in Thailand. These rules determine how investors may lawfully establish a business. It defines shareholder rights and director duties, limit foreign ownership, regulate capital-raising methods, and impose legal consequences for non-compliance. In a jurisdiction with strict regulatory oversight, controlled foreign participation. The company law provides the foundation for secure, compliant, and commercially viable operations.
Thailand’s corporate legal system draws primarily from civil law principles, and lawmakers spread it across multiple legislative instruments rather than a single consolidated statute. The Civil and Commercial Code, the Foreign Business Act, the Investment Promotion Act, the Public Limited Company Act, and related financial, accounting, and insolvency legislation collectively govern corporate conduct and compliance.
Below, we present a structured legal overview of the principal statutes. It forms the backbone of company law in Thailand and explain how each statute applies to corporate formation, governance, investment, and regulatory compliance.
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Table of Contents
How the Civil and Commercial Code appears to be the foundational legal framework for the company Law in Thailand?
The Civil and Commercial Code is the foundational legal framework for company law in Thailand. Book III, Title XXII of the Thai Civil and Commercial Code oversees the registration, capitalization, leadership hierarchy, duties of those in power, and dissolution routes for private companies. A minimum of three initiators must prepare incorporation papers and submit them, alongside depositing no less than a quarter of each share’s cost, to officially register with the Department of Business Development as Section 1111 provides.
One or more directors manage the company, as provided in Section 1155. They must comply with fiduciary duties and statutory obligations when directing the company’s affairs. Shareholders must approve major decisions such as increasing share capital, amending the memorandum or by-laws, or closing the business through resolutions in accordance with Sections 1174 to 1180.
The Civil and Commercial Code further provides a nuanced framework for minority shareholder rights, dividend distribution, and liquidation, ensuring that company operations remain legally compliant and equitable for all stakeholders.
The Foreign Business Act, a restrictive company law in Thailand for foreign investors?
The 1999 Foreign Business Act is a crucial company law in Thailand governing international involvement in Thai commerce. According to Section 4 of the Act, a “foreigner” is defined by this company law in Thailand as a natural person who is not of Thai nationality but also as a juristic person with 50% or more foreign ownership or control, including indirect control via nominee structures.
The Foreign Business Act lists restricted sectors in three annexes. List One fully prohibits foreign participation in activities such as newspaper publishing and land transactions. List Two covers activities related to national security, culture, or natural resources and requires prior Cabinet approval. For professions under List Three that Thai nationals predominantly control, such as accounting and law, foreigners must obtain a license from the Director-General of the Department of Business Development under Section 12.
Authorities assess economic impact, employment, ethics, and environmental considerations under Section 5 when reviewing license applications, and Section 37 imposes criminal penalties for violations.
The Investment Promotion Act B.E. 2520 (1977) authorizes the Board of Investment (BOI) to promote investments that strengthen Thailand’s economy. Under Section 16, the BOI may grant promotional certificates to eligible companies.
The Act divides incentives into tax and non-tax benefits. Sections 31 and 35 allow promoted companies to receive corporate income tax exemptions of up to eight years, import machinery and raw materials duty-free, and claim enhanced deductions for certain expenses.
Section 25 also permits non-tax benefits such as land ownership and full foreign control in approved cases. To qualify, applicants must meet criteria related to innovation, sustainability, technology, or regional development under Section 18 and submit a feasibility study and investment plan. Section 21 empowers the BOI to revoke incentives if companies fail to meet their approved objectives.
The Public Limited Company Act, a regulatory company law in Thailand for public firms
The Public Limited Company Act B.E. 2535 (1992) lays down strict rules for corporations that wish to offer shares to the general public. This Company law in Thailand holds these businesses to higher standards of governance and transparency than private limited companies.
As per Section 7, a public limited firm must be established by a minimum of fifteen promoters, who subscribe to shares and prepare a prospectus. Section 33 requires the company to maintain a governing board consisting of at least five individuals, half of whom must reside in Thailand.
Section 54 prohibits bearer shares, and all shares must carry equal value and be registered. Sections 36 and 83 require companies to register any changes to capital structure, director appointments, or company objectives with the Department of Business Development. Section 100 requires companies to hold annual general meetings, and Section 113 requires companies to provide financial reports to shareholders and file them with the Registrar.
The Act also grants strong protections to minority shareholders, including the right to call meetings, propose agenda items, and initiate derivative lawsuits.
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What duties for reporting and conduct does the Securities and Exchange Act impose on listed corporations and market intermediaries?
The Securities and Exchange Act of 1992, as amended, governs Thailand’s capital markets, and the Securities and Exchange Commission enforces it. This area of company law in Thailand plays a central role for publicly listed companies and capital market intermediaries.
Section 71 requires any company that offers securities to the public to register a statement and prospectus approved by the SEC. Section 238 prohibits insider trading, and Section 243 penalizes market manipulation and deceptive practices.
Corporate governance obligations include establishing audit committees under Section 89/7 and complying with disclosure requirements under Section 56. Public companies must regularly publish quarterly and annual financial statements in accordance with SEC notifications issued under Section 81.
Capital market operators such as securities brokers, investment advisers, and fund managers must obtain licenses under Sections 90 to 102 and remain subject to continuous regulatory supervision.
What are the key accountabilities under the Accounting Act for businesses in Thailand?
Therefore, the Accounting Act of 2000 ensures fiscal transparency and uniformity among business operators. Section 8 of this company law in Thailand necessitates all businesses within its domain—including private and public companies, registered partnerships, and foreign entities performing in Thailand—to maintain proper accounting files.
Also, section 9 mandates appointing a qualified accountant who must confirm accounts are maintained in line with Thai Financial Reporting Standards, as characterized by the Federation of Accounting Professions. Annual financial statements must be submitted to the DBD within 150 days after the end of the fiscal year as stated in Section 11.
Noncompliance can result in penalties under Sections 13 and 14, and repeated nonadherence may lead to criminal accusations or administrative sanctions such as suspension of the business license.
The Bankruptcy Act, the company law in Thailand for insolvent companies and their creditors
The Bankruptcy Act B.E. 2483 (1940), as updated, governs the procedures for declaring an individual or entity bankrupt and for business rehabilitation. Part 7 of this company law in Thailand enables creditors to file for personal bankruptcy when a debtor is insolvent and owes no less than 1 million baht for persons or 2 million baht for legal persons.
Furthermore, Section 12 stipulates that the court must be convinced of the debtor’s insolvency before issuing a receivership order. Upon such order, an official receiver is appointed under Section 22 to manage the debtor’s resources and activities.
The Act provides a restructuring mechanism under Chapter III/1, starting with a petition under Section 90/3. The debtor or a creditor holding over 20% of the debt may propose a rehabilitation plan, which must be approved by the court. Once approved, the plan becomes binding on all creditors as per Section 90/58.
The Act protects secured creditors by preserving their enforcement rights, while unsecured creditors are repaid based on a legally defined priority structure outlined in Sections 130 and 131.
Conclusion
Finally, company law in Thailand operates through an intricate yet coherent framework that balances national interests with international business standards. Each statute fulfils a distinct function: the Civil and Commercial Code governs private enterprises; the Foreign Business Act restricts foreign ownership; the Investment Promotion Act encourages targeted economic sectors; the Public Limited Company Act regulates public offerings and disclosure; the Securities and Exchange Act oversees capital markets; the Accounting Act enforces financial reporting obligations; and the Bankruptcy Act manages insolvency and rehabilitation.
Rather than presume automatic compliance, investors should engage legal counsel and structure their corporate vehicles to reflect their sector, objectives, and strategic positioning. Compliance not only provides legal certainty but also enables businesses to benefit from Thailand’s incentives, infrastructure, and investment climate. Long-term success requires understanding not only the rules themselves, but also the underlying policy intent one that carefully balances market openness with the protection of national priorities.
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FAQ
The main statutes that collectively constitute Company Law Thailand include:
the Civil and Commercial Code,
the Foreign Business Act,
the Investment Promotion Act,
the Public Limited Company Act,
the Securities and Exchange Act,
the Accounting Act,
and the Bankruptcy Act.
Each law addresses different stages and aspects of a company’s life cycle.
The Civil and Commercial Code is the primary statute governing private limited companies in Thailand. It regulates incorporation, share capital, director authority, shareholder resolutions, dividend distribution, minority protection, and liquidation procedures.
The Foreign Business Act restricts foreign participation in certain business activities through a licensing and prohibition system. It defines “foreigners” broadly to include companies with majority foreign ownership or control and limits foreign involvement in sensitive sectors unless special approval or licensing is obtained.
Yes. Under the Investment Promotion Act, the Board of Investment (BOI) may grant exemptions from foreign ownership restrictions, allow land ownership, and provide tax and non-tax incentives to companies that meet strategic economic, technological, or regional development criteria.
The Public Limited Company Act governs companies that offer shares to the public. It imposes higher standards of corporate governance, disclosure, board composition, shareholder protection, and reporting than those applicable to private limited companies.