Thailand has updated its company registration review process with four new measures coming into effect at the start of the year. Given the short notice, the Department of Business Development (DBD) announced the new rules a little more than two weeks before implementation, there was some concern about how this would impact the foreign business community.

In reality, the new DBD measures are designed to add transparency to the company registration review process while eliminating loopholes and grey areas that currently exist. The country has struggled to combat foreign companies from finding ways around legal regulations.

The most significant change for foreign businesses is that they can expect a more thorough evaluation when incorporating or restructuring a company in Thailand. The process may take longer and require more paperwork to be submitted.   

What does Thailand’s updated company registration review process cover?

One key change is the entities covered under the new DBD measures. In addition to companies where foreign investors account for less than 50 percent of shareholders, the review process now includes those that appoint a foreign director or a foreigner as an authorised signatory.

Companies will also be required to verify the financial capacity of each Thai shareholder by providing a three-month bank statement to show stated funding. This is to prove actual investment rather than a workaround agreement.

Elsewhere, those using serviced offices, virtual offices and coworking spaces may be asked to submit a lease or other proof of use, e.g. a letter of consent from the owner of the premises. This is expected to cover both incorporation filings and address changes. 

New measures focus on enforcement of existing regulations

Thailand’s updated review process does not introduce new regulations that foreign companies must follow. The goal is to improve monitoring and enforcement of requirements already on the books. If anything, a more detailed evaluation moves the country closer to international transparency and anti-money laundering standards.

For new businesses incorporating in Thailand or existing ones needing to undergo a share transfer and restructuring, having properly structured and documented ownership, funding and governance is paramount.

Thailand’s updated company registration review process also underscores the importance of working with a reputable firm when incorporating or restructuring. Having support from an experienced partner can eliminate delays and avoid other potential issues.

To learn more, schedule a no-obligation call with Jari Hietala, Managing Partner: jari.Hietala (at)asianinsiders.com or Axel Blom, Managing Partner, Thailand, axel.blom(at)asianinsiders.com