Legal Requirements for Business Acquisition in Thailand
Complete guide to Thai legal framework, regulatory compliance, and approval processes for foreign business acquisitions
⚖️Thai Legal Framework Overview
Foreign Business Act
Primary Regulation
Competition Act
M&A Notifications
BOI Privileges
Investment Incentives
30-90 Days
Approval Timeline
Why Understanding Legal Requirements is Critical
Thailand has specific regulations governing foreign business ownership and acquisitions. Compliance with these laws is essential to avoid penalties, ensure valid transactions, and maximize investment benefits.
📜Foreign Business Act (FBA)
🚫 Restricted Business Activities
List 1: Prohibited for Foreigners
- • Newspaper, radio, television broadcasting
- • Rice farming, agriculture, horticulture
- • Livestock and fishery
- • Forestry and wood processing
- • Land transportation and domestic shipping
List 2: National Security/Culture
- • Domestic trade (with exceptions)
- • Accounting services
- • Legal services
- • Architectural and engineering services
- • Construction services
✅ Permitted with License
List 3: Foreign Business License Required
- • Manufacturing and production
- • Services related to mining
- • Banking and financial services
- • International trade
- • Wholesale and retail trade
- • Tourism and hotel services
Foreign Ownership Limits
Generally limited to 49% foreign ownership unless BOI promoted or treaty protected
🏢Competition Act & Merger Control
📊 Notification Thresholds
Size of Transaction Test
- • Transaction value ≥ THB 1 billion
- • Combined assets ≥ THB 10 billion
- • Combined turnover ≥ THB 10 billion
Market Share Test
- • Combined market share ≥ 50%
- • One party has ≥ 25% market share
- • Market concentration concerns
⏱️ Review Process
Timeline
- • Phase 1: 45 days preliminary review
- • Phase 2: 60 days detailed investigation
- • Phase 3: 60 days extended review
- • Total possible: 165 days
Possible Outcomes
- • Unconditional approval
- • Conditional approval
- • Prohibition
🏛️Corporate Law Requirements
📋Share Transfer Requirements
- ✓Board of directors' approval
- ✓Shareholders' meeting resolution
- ✓Share transfer instrument execution
- ✓Share register update
- ✓Ministry of Commerce filing
🏢Asset Transfer Requirements
- ✓Asset purchase agreement
- ✓Individual asset transfer documents
- ✓Land office registration (real estate)
- ✓Intellectual property transfers
- ✓License and permit transfers
📊Tax Law Compliance
💰 Transaction Taxes
Stamp Duty
0.5% on share transfers
Specific Business Tax
3.3% on certain asset transfers
Withholding Tax
Various rates depending on transaction
Transfer Fees
2% on land transfers
📋 Compliance Requirements
- ✓Tax clearance certificates
- ✓Transfer pricing documentation
- ✓VAT registration updates
- ✓Corporate income tax filings
- ✓Foreign exchange notifications
- ✓Annual tax reconciliation
🎁Board of Investment (BOI) Privileges
BOI Investment Promotion
💰Tax Benefits
- • Corporate income tax exemption (3-8 years)
- • Import duty exemption on machinery
- • Raw material duty reduction
- • Double deduction for transportation costs
🏢Ownership Benefits
- • 100% foreign ownership allowed
- • Land ownership rights
- • Exemption from Foreign Business Act
- • Work permit facilitation
📋Application Process
- • Submit promotion application
- • BOI review and evaluation
- • Site inspection and verification
- • Promotion certificate issuance
📋Required Regulatory Approvals
🏛️Government Approvals
- ✓Foreign Business License (if applicable)
- ✓Competition Commission notification
- ✓Bank of Thailand approval (financial sector)
- ✓Securities and Exchange Commission
- ✓Ministry of Commerce registration
🏭Industry-Specific Approvals
- ✓Environmental Impact Assessment
- ✓Factory licenses and permits
- ✓Import/export licenses
- ✓Professional service licenses
- ✓Telecommunications licenses
⏰Compliance Timeline
Regulatory Approval Timeline
Weeks 1-2: Documentation Preparation
Prepare all required documents, translations, and legal opinions
Weeks 3-6: Initial Filings
Submit applications to relevant government agencies
Weeks 7-10: Review Process
Government review, clarifications, and additional information requests
Weeks 11-13: Final Approvals
Final approvals, certificate issuance, and registration updates
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