Background - Thai Company Partner
The Thailand Foreign Business Act (FBA) restricts majority foreign owned companies from performing service type businesses in Thailand without first going through a risky, costly and time consuming application process to apply for a foreign business license or Board of Investment (BOI) license. There are only a few types of business activities such as export and manufacturing that are exempt from the FBA. Thus, most foreign controlled companies will have a local Thai person as their business partner and majority shareholder.
How to find a Thai company partner in Thailand?
Many foreigners make the mistake or registering a company with a Thai majority shareholder they do not know or that's been assigned by the law firm registering their company. This can cause issues in the future when you need the Thai shareholder to sign legal documents such as a share transfer.
It can also be considered a violation of the Thailand Foreign Business Act if the Thai shareholder does actually invest their own money in the company. We recommend for our clients to enter into a loan agreement with the Thai shareholder as this can help reduce exposure to violating the Thailand Foreign Business Act. Another action that can be taken to reduce exposure to violating the Foreign Business Act include adding the Thai shareholder as a director of the company and is active in operating the business. We also recommend our clients enter into a shareholders agreement with the Thai shareholder with the right of first refusal to buy back the shares in case the Thai shareholder wants to exit the business.
If you do not have a trust Thai company partner, we recommend to try networking with Thai people in the same industry as your business to find one. We also recommend you try contacting established businesses in the same industry to try to develop a partnership with your business. If all else fails, you can consider using NNP Group's Thai company partner service. Note we do not provide this service to retail, wholesale or trading businesses.
NNP Group - Scope of Service
Our Thai company partner service includes the following:
