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Thai Majority Company for Foreigners: Requirements, Procedures, and Practical Risks

  • Writer: gentlelawlawfirm
    gentlelawlawfirm
  • May 29
  • 3 min read

Updated: Jul 13


Skyscraper at night with text: "Thai Majority Company for Foreigners; Requirements, Procedures, and Practical Risks" by Gentle Law.

Why 51% Thai Ownership is the Most Common Setup—But Not Without Risks

Many foreign investors seeking to establish a business presence in Thailand turn to the Thai majority company model—where Thai nationals hold at least 51% of shares. On paper, it offers a faster, simpler pathway than restricted foreign ownership models. However, misunderstanding the legal requirements—or worse, attempting to circumvent them—can expose foreign entrepreneurs to serious legal risks under the Foreign Business Act B.E. 2542 (1999).

In this article, we break down the essentials for setting up a Thai majority company, including requirements, procedures, documents, and key red flags to avoid.





What “Thai Majority” Really Means

Under Thai law, certain business activities are restricted to Thai nationals unless exempted by the Board of Investment (BOI) or Treaty of Amity (for U.S. citizens). A Thai majority company, where more than 50% of shares are held by Thai individuals or entities, is generally not considered a "foreign" company under the Foreign Business Act.

However, economic control is as important as legal shareholding. Thai authorities scrutinize whether:

  • The Thai shareholders actually invested their capital.

  • The foreign shareholder controls decision-making or financial operations.

  • Nominee structures are used (which are illegal).

Example: A foreigner registers a company with 49% shares and appoints two Thai friends with 51%, but pays the full capital himself. This structure may be deemed a nominee arrangement, exposing all parties to criminal liability.





How to Register a Thai Majority Company

Here is a step-by-step guide for setting up a Thai majority-owned company:


Step 1: Reserve a Company Name

Submit 3 name choices to the Department of Business Development (DBD). The name should not resemble existing entities.


Step 2: Prepare the Memorandum of Association (MOA)

This includes the company name, objectives, registered capital, shareholder structure, and address.


Step 3: Convene a Statutory Meeting

This is where directors are appointed, shares are issued, and articles of association are adopted.


Step 4: Register the Company with the DBD

Submit the full application, MOA, director details, and shareholder list.


Step 5: VAT and Tax ID Registration (if applicable)

Mandatory if annual turnover exceeds 1.8 million THB or if doing business with VAT-registered entities.





4. Key Documents Required

  • Passport copies of all foreign directors and shareholders

  • Thai ID and House Registration (Tabien Baan) of Thai shareholders

  • Proof of capital contribution (especially important if funds are transferred from abroad)

  • Lease agreement for the business location

  • Affidavit from shareholders (if required to confirm source of funds or intent)





5. Risks and Misunderstandings to Avoid

✅ Legitimate Thai Investors Must Contribute Real Capital

Thai shareholders must genuinely invest their share capital. Using funds provided by the foreigner may constitute nominee arrangements, which are illegal.

✅ Be Careful with Power Distribution

Avoid contracts or director structures that give the foreigner exclusive control. This may contradict the legal majority held by Thais and draw scrutiny.

✅ Stay Clear of “Shelf Companies” or Fast-Track Packages

Some agents offer ready-made Thai majority companies for sale. These may involve nominee risks, poor documentation, or unpaid tax issues.





Benefits and Limitations: What to Expect

Advantages

Limitations

Faster registration process

Foreign ownership capped at 49%

No BOI application needed

Limited access to restricted business types

Lower compliance burden (initially)

Work permit support still requires 2M THB capital per foreigner

Pro Tip: If you plan to expand or apply for a work permit, plan your capital and Thai employee structure from day one.





Caution & Practical Advice for Foreign Entrepreneurs

  • Avoid nominee arrangements at all costs. Thai authorities are increasingly cracking down on these.

  • Use clear shareholder agreements to protect your operational rights, but ensure they don’t contradict the law.

  • Work with a qualified legal team familiar with DBD and immigration rules to ensure compliance.

  • Plan for work permits in advance. Capital and employee ratios must align with labor regulations.

  • Check your sector. Some business types are restricted regardless of shareholding unless BOI approved.





Conclusion: Thai Majority Companies Are Viable—If Set Up Properly

Registering a Thai majority company is a common strategy for foreigners to operate in Thailand legally. But its simplicity is often misunderstood. The key is to avoid shortcuts, understand your legal obligations, and structure your company in a way that reflects both legal compliance and your business goals.



Need Expert Help?

At GENTLE LAW IBL, we specialize in guiding foreign investors through legally sound company structures, ensuring compliance with Thai regulations, and protecting your long-term interests.


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