foreign and Thai shareholders
A Thai company is not subject to the Foreign Business Act and a Thai owned company (Thais holding more than half of the shares) will not be restricted by the Foreign Business Act. Foreigners are allowed to participate in a Thai company and control a Thai limited company. Due to the misuse of Thai nationals as nominee shareholders by foreigners the Thai government issued new 'business registration rules' preventing the use of Thai nominee shareholders by foreigners.
Detail sought on sources of foreign funds
New business registration rules will require all new companies with foreign shareholdings of more than 40% to declare their sources of funds, according to the Commerce Ministry. The new policy, which will take effect on Aug 15, is aimed at guarding against the problems of nominee shareholders and increasing transparency in the corporate registration process.
Orajit Singkalavanich, the director-general of the ministry's Business Development Department, said the rule would also apply to new companies that are controlled by foreign entities, even if their direct shareholdings are less than 40%......
full article available at the Bangkokpost website
Source: Bangkokpost - 1 August 2006
Below the initial business registration rules for the registration of companies and partnerships with foreign participation.
Pursuant to the Order of the Business Registration Office No. 1/2538 Regulations for the Partnership and Company Registration B.E.2538, dated on March 13, 1995 (BE 2538), stipulates that the person, who desires to register a partnership and company limited, is subjected to submit the application form and the supplementary document complying to the appendix of the aforementioned Order;
Regulation of Commercial Registration Department
Re: Documents required for Partnership and Limited Company Registration Application
Now, under the Condition 3, Clause 3, of the Ministerial Regulation regarding to the establishment of the Business Registration Office, the appointment of the registrar and the determination of the rules and regulations for the partnership and company limited registration B.E.2549 which is issued under the Civil and Commercial Code (in the section regarding to the Partnership and Company), the Registrar General hereby stipulates the rules and regulations for the registration of the partnership and company limited which has the foreigner(s) holds the shares of the partnership or company at the proportion begins from 40% but less than 50% of the registered investment capital, or the foreigner holds the shares less than 40% of the registered capital and the foreigner is authorized to act on behalf of the said partnership or the company limited.
For the aforementioned case, all Thai national shareholders are subjected to submit the evidences showing the source of the investment together with the application form of the business registration. The said evidence shall contain the detail of the amount of money which matches to the amount of the investment that each Thai shareholder has invested in the Company or the partnership. The required evidence shall be one of the following documents:
1. Copy of the bank statement of the most recent record of the last 6 months or;
2. Any document which issued by the Bank to certify the financial status of the shareholder or;
3. Copy of the evidence that shows the source of the investment that the Thai shareholder invested in the partnership or company limited.
This regulation shall be commencing in full force from this August 15, 2006 .
Order dated on July 20, 2006
Ms. Orrajit Singkhalawanitch
Director-general of Department of Business Development
The Registrar General