Many people move to Thailand and decide to register a company or move to Thailand with the specific aim of registering a company in Thailand.
Such individuals would be well advised to become familiar with a piece of legislation called the Foreign Business Act (FBA). This sets out the rights of foreign companies in Thailand, as well as what is not permitted.
The first and biggest obstacle is that most, although not all, foreign businesses looking to register in Thailand require a Thai majority shareholding.
It is also possible obtain an alien business license, and Americans can set up an amity treaty company, but many companies prefer to have a Thai majority shareholding. Many foreigners choose to form a Thai majority company, so that the Company is able to operate a business in a category that is restricted to foreigners. The registration of a Thai majority company generally requires less registered capital and less paperwork than the registration of a foreign company. A Thai majority company can also buy land.
Unfortunately some foreign companies choose to take the easy way out. A nominee shareholder is a shareholder in name only: in reality nominee shareholders lacks any real financial stake or interest in the company. Under the FBA, the practice of Thai nominee shareholders is illegal.
There are companies in Thailand who will offer to supply Thai nominees. This is extremely high risk:
- you will have no knowledge of who the shareholder of your company is;
- they are employees who will probably be listed as shareholders in multiple companies
- if they leave employment they have no relationship with you and owe you no loyalty.