Samui Phangan Real Estate Magazine February-March

However, if foreign nationals hold more than 49% of the shares, your company is a foreign company.
The significant differences between Thai and foreign companies operating in Thailand lie in their rights to buy and
own properties or other businesses. It is therefore important, especially for those in real estate and development
businesses, to know and remember that unless your company is Thai, you are restricted in the ability to possess
and obtain land and property in this country without an exemption granted by the government.
Foreign companies are also restricted to certain activities and to proceed with certain operations the company
will have to apply for permission from the government. In such instances, applications will be considered case
by case. They will also face tough scrutiny and strict restrictions on their right to operate and ability to run their
business. These companies will be treated in the same way as foreign nationals seeking jobs in Thailand.
If you are registered as a Thai company, you are automatically granted the right to purchase and own properties
and other business and will be treated the same way as a Thai citizen. However, according to new legislation that
has recently come into effect, the Land Department’s staff are now required to thoroughly investigate your Thai
shareholders’ sources of income. Thai shareholders in a company wishing to purchase properties in Thailand
have to declare their income and provide the authorities with evidence that proves their ability to co-invest with
other foreign shareholders in the same company. Only those successful in convincing the authorities are granted
the right to purchase and possess land. Companies with approval from the Land Department can then proceed
with their applications for land title deeds or other certificates of use and possession.
LITTLE THINGS THAT MATTER
A company limited has to have its own board of directors to act on behalf of the company. This panel will,
however, act under the regulations and agreements approved by the shareholders. Appointing directors or
removing any of them requires shareholders approval.
At the end of the company’s financial year, within five months, it shall be the duty of the company to present the
balance sheet to the Department of Business Development (DBD). If your company fails to present the balance
sheet, the company will be fined up to 50,000 baht and the company’s board of directors may also be fined up
to 50,000 baht. If the committee refuses to pay the fine, the police can appeal to the court for a warrant and file a
lawsuit against the resilient parties. Withdrawal of the company’s business registration is also another penalty the
company may face, should they not provide the authorities with the necessary statement.
Information courtesy of Khun Surin Puangpakdee Senior Lawyer NSP&Laws Firm +66 077 458 204
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