Corporate Law in Thailand – General Principles

Last updated on July 23, 2026

Corporate law in Thailand is built on Book 3, Title XXII of the Civil and Commercial Code (CCC), sections 1012 to 1273, which governs partnerships and companies. For almost every foreign investor the vehicle that matters is the private limited company. This guide sets out how that company is formed, who controls it, what the foreign-ownership limits are, and what it costs to do it properly. Where a rule comes from a specific section of the Code, we cite it, so you can check it yourself.

The Private Limited Company: the Standard Vehicle

A limited company is one whose capital is divided into shares, and whose shareholders are liable only for the amount unpaid on the shares they hold (CCC section 1096). Once the company is registered, it becomes a juristic person distinct from its shareholders (CCC section 1015). That separation is the whole point: the company owns the assets, signs the contracts, and carries the liability, not the individuals behind it.

How many shareholders you need. This changed recently and a lot of older guides still get it wrong. Section 1097 used to require three or more promoters. The Act amending the Civil and Commercial Code (No. 23) B.E. 2565, effective 7 February 2023, reduced the minimum to two. A private limited company in Thailand can now be formed and held by just two shareholders, and the quorum for a shareholders meeting is two persons (section 1178).

Formation Steps

1. Reserve the company name with the Department of Business Development (DBD).
2. File the Memorandum of Association. Section 1098 requires it to state the company name (which must end with the word “Limited”), the province of the registered office, the objects, a statement that shareholder liability is limited, the registered capital and the division into shares, and the promoters’ details. Each promoter must subscribe at least one share (section 1100).
3. Hold the statutory meeting to adopt the articles and appoint the first directors and auditor.
4. Register the company with the DBD. On registration it becomes a juristic person (section 1015). Registration of a company and its memorandum can be completed on the same day where the capital is fully arranged.

Directors and Management

A limited company is managed by a director or directors, under the control of the general meeting of shareholders and in accordance with the company’s regulations (CCC section 1144). The number of directors and their remuneration are fixed by the general meeting (section 1150). A casual vacancy on the board, other than one arising by rotation, may be filled by the remaining directors, but the person appointed holds office only for the remainder of the departing director’s term (section 1155).

A director owes the company duties of care and loyalty. Who may bind the company, and whether one authorised signature is enough or two are required, is set by the registered authorised-signatory rule, which appears on the company’s DBD affidavit. Getting that rule right at formation avoids a common and expensive problem later, when a bank or a counterparty refuses a document because it was signed by the wrong combination of directors.

Shareholders, Dividends and the Reserve Fund

No dividend may be declared except by a resolution of a general meeting, though directors may pay interim dividends where the position justifies it (CCC section 1201). One rule catches many new companies by surprise: at every distribution of a dividend the company must set aside at least one-twentieth (5%) of its profits into a reserve fund, until that reserve reaches one-tenth of the company’s capital (section 1202). A dividend paid without making that appropriation is irregular.

Foreign Ownership and the 49% Rule

For most business activities a company is treated as foreign if 50% or more of its shares are held by non-Thais, and foreign majority ownership of a restricted business is capped by the Foreign Business Act B.E. 2542 (1999). In practice this is why the “49/51” structure is so common. There are three main lawful routes to more than 49% foreign ownership:

• Board of Investment (BOI) promotion, which can allow 100% foreign ownership in promoted activities, along with tax and visa benefits.
• A Foreign Business Licence, granted case by case for activities on List Three of the Act.
• The US-Thailand Treaty of Amity, which lets American nationals and US-majority companies own up to 100% in most sectors.

Using Thai nationals as nominee shareholders to disguise foreign control is not a route. It is an offence under the Foreign Business Act, and it is currently the subject of an active nationwide crackdown. See our page on Thai nominee shareholders.

A Thai limited company pays corporate income tax at the standard rate of 20% on net profit, with reduced rates for qualifying small companies. It must keep audited accounts, file an annual return, and hold at least one shareholders meeting a year.

Winding a Company Up

A company can be dissolved voluntarily by special resolution, or by the Court on the grounds in CCC section 1237, which include failure to file the statutory report or hold the statutory meeting, and failure to commence business within a year. On a winding-up, company property is distributed to shareholders only after all the company’s obligations have been met (section 1269). Closing a company down properly takes several months because of the liquidation and tax-clearance steps, so it is worth planning the exit at the same time as the formation.

How ThaiLawOnline Can Help

We register Thai companies, draft and review shareholder and joint-venture agreements, structure BOI and Treaty of Amity applications, prepare board and shareholder resolutions, and handle company closures. Our fixed fee to register a Thai company is 45,000 THB, and contract review starts at 9,000 THB. The full schedule is on our legal fees page.

A practical note from practice: the mistakes that cost real money are almost never in the registration itself, which is routine. They are in the things people skip to save a few thousand baht at the start, a shareholders agreement that was never drafted, an authorised-signatory rule that does not match how the business actually operates, or a nominee arrangement that looked convenient until the DBD asked where the Thai shareholder’s money came from. We have worked under Thai law since 2006, and those are the files we are asked to clean up most often.

For advice on your specific situation, contact us.