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Foreign Investment Law

WHY THAILAND REMAINS A STRATEGIC INVESTMENT DESTINATION AMID GLOBAL UNCERTAINTY

As the world grapples with geopolitical instability and shifting global trade dynamics – including the recent tensions along the Thai-Cambodian border and U.S. tax pressure – foreign investors may naturally feel cautious. However, a deeper look at Thailand’s economic fundamentals, legal framework, and proactive government policies reveals a resilient and attractive investment landscape. Strategic Location in ASEAN’s Economic Heart Thailand remains at the center of mainland Southeast Asia, serving as a natural hub for trade, logistics, and regional operations. The country is uniquely positioned to access over 660 million consumers across ASEAN, and continues to play a central role in regional supply chains, particularly in automotive, electronics, agritech, and medical industries. Even in the face of regional instability, Thailand’s infrastructure, cross-border logistics, and customs facilitation remain largely unaffected. The government has taken measured steps to insulate commercial zones and economic activities from political or military disruptions, maintaining a functional and secure environment for investors. Resilient Economy with Diversified Strengths Thailand boasts one of the most diversified economies in Southeast Asia. From advanced manufacturing and digital services to agriculture and tourism, the country is not overly dependent on any single sector or trading partner. This diversification has allowed the economy to absorb external shocks better than many of its neighbors. Additionally, Thailand has maintained a relatively low inflation rate and a stable currency, thanks to prudent fiscal and monetary policies. Despite global volatility, the country continues to register steady GDP growth, with significant inflows into green energy, logistics, biotech, and digital sectors. Robust Legal and Regulatory Environment Thailand’s legal infrastructure governing foreign direct investment (“FDI”) is mature, transparent, and business-friendly. Foreign investors are supported and protected under key laws such as the Investment Promotion Act (known as “BOI”) and Eastern Special Development Zone Act (known as “EEC”). Dispute resolution mechanisms, both judicial and arbitral, are well developed. The BOI and EEC continues to offer generous incentives for eligible businesses.   Sample Incentives Corporate income tax exemptions for up to 13 years; 100% foreign ownership in promoted sectors; Import duty exemptions on machinery and raw materials; and Work permit and visa facilitation for foreign staff. Even during geopolitical tensions, BOI and EEC remains fully operational and responsive. In fact, the Thai government has continually promoted digital infrastructure, clean energy, medical innovation, and EV-related investment by offering additional incentives to investors willing to participate in the nation’s strategic transformation. Political Neutrality in Trade Tensions While U.S. policies under Trump may reflect a trend toward economic nationalism, Thailand remains a politically neutral and open economy. It is a signatory to key international treaties such as the Regional Comprehensive Economic Partnership (RCEP), and maintains free trade agreements with China, Japan, Australia, India, and the EU (under negotiation). This neutral positioning allows investors in Thailand to maintain access to both Western and Eastern markets without being directly exposed to retaliatory trade barriers or tariffs.   Conclusion In uncertain times, clarity and control become vital. Thailand offers investors both: a clear legal pathway for foreign ownership, and a stable, investor-oriented environment to grow their regional footprint. While conflicts and shifting global politics may dominate the headlines, seasoned investors know that long-term success lies in resilience, diversification, and institutional support – all of which Thailand continues to deliver. If you're considering your next strategic move in Asia, Thailand deserves a closer look. For legal assistance, please contact: [email protected] Mr. Bunnasomboon Chaiparinya (Aaron) Partner / Head of Corporate Department Email: [email protected]    
29 August 2025
Corporate Law

FAQ and All You Need to Know about Incorporating a Company in Thailand

Despite recent political unrest and ongoing border conflicts, Thailand has continued to attract foreign investors across several business sectors in recent years. While the overall concept of company incorporation may be similar to that of other countries, the specific criteria and process for establishing a company in Thailand differ in important ways. In this article, we address the most frequently asked questions from our clients about incorporating a company in Thailand. Our aim is to provide clear, practical explanations to help you begin the incorporation process with confidence. Question 1. Does Thai law allow a company to be 100% foreign owned? The Thai Civil and Commercial Code (the “CCC”), which is the law governing and regulating a limited company, does not prohibit foreigners from holding 100% of shares in a company. Therefore, a company can be legally established and exist with all its shares being held by foreigners. However, if foreigners own 51% or more of a company’s aggregate shares, the company will be regarded as a foreign company. It will then be subject to certain restrictions on business commencement—such as limitations on operating specific types of businesses—under the Foreign Business Act B.E. 2542 (the “FBA”). The details of these restrictions will be further elaborated. Question 2. What is the minimum number of shareholders and any other requirements? Currently, the CCC requires a limited company to have at least 2 shareholders at all time. Shareholders can be individuals and/or juristic persons. Noted that the company promoters, who play the key role in forming and registering the company, must be individuals and must subscribe at least 1 share when incorporate the company. Due to this requirement, these 2 individual promoters will be the initial shareholders of the company. Question 3. Is there any requirement on the minimum number or nationality of director? A company must have at least 1 director. Apart from appointing directors, the company must also register the authorized signatory directors and the signing conditions to bind the company. There are no restrictions or requirements on the qualifications or nationality of the director. However, in case the company is 100% Thai-owned but a foreigner is named the sole or joint authorized director, the company will be required to submit to the Department of Business Development (the “DBD”) the letter or certificate issued by the bank to confirm that all Thai shareholders in the company have a sufficient account balance to subscribe for the shares. The requirement that Thai shareholders must demonstrate financial capability by providing sufficient account balances exists to ensure that they are truly able to subscribe to the company's shares, rather than serving as nominees for foreign investors. This measure helps maintain genuine local ownership and prevents circumvention of foreign investment regulations, thereby supporting transparency and the integrity of Thailand’s business environment. Question 4. What is the minimum registered capital for a Thai company? There is no minimum registered capital required by the law and the company can be incorporated with the registered capital it deems appropriate for commencing its business. If the registered capital exceeds 5 million Thai Baht, the company will be required to submit, together with the application for incorporation to the DBD, the banking evidence which proves the remittance of share payment into any of the directors’ bank account. If all directors are foreigner and unable to open the bank account in Thailand for receiving the share payment, the DBD permits the required bank evidence to be submitted within 15 days after the DBD registrar approved the incorporation. Failure to comply with this timeframe, the DBD is empowered to revoke the incorporation. Question 5. What are the Articles of Association and how are they important? Articles of Association (the “AOA”) are the by-laws of the company. Apart from the provisions of the CCC, directors and shareholders are obligated to manage and control the company in accordance with the AOA. Basically, the AOA will specify certain basic rules about the company, such as, classes and groups of shares, number of directors, limitation of the authority of directors, how to summon shareholders’ or the board of directors’ meetings, how board of directors’ and shareholders’ resolutions can be passed, etc. The Articles of Association of the company can be established in one of the following ways: • Adoption of the provisions of corporate law under the CCC in the absence of any customized articles. • Standard template of AOA as provided by the DBD: The company adopts a government-issued template, which contains standard provisions approved by the authorities and is designed for general use. • Company’s own version of AOA: The company drafts its own set of rules, tailored to its specific needs and preferences, allowing for customization of governance and internal procedures. If the company decides to draft its own AOA, the DBD registrar will review to ensure that no articles are in contradiction to the provisions of the CCC. As such, this option will result in the longer registration period compared with the adoption of the CCC or standard template of the DBD as the company’s AOA. However, in the case of a joint venture company, certain clauses agreed upon by the parties to the joint venture agreement should be incorporated into the AOA. For example, provisions regarding meeting quorum, voting rights, and dividend entitlements should be included. Including these clauses in the AOA helps guarantee that the terms of the joint venture agreement are properly implemented and observed by all parties and the company itself. Question 6. Is it necessary for the company to have an office in Thailand? Yes, the CCC requires the company to register the address of its premises when incorporating the company and this premises must locate in Thailand. In addition to the address, an 11-digit house registration number must also be provided in the application. This house registration number can be found in the document called “Thai House Book” or in Thai as “Tabien Baan” which is an administrative document issued by the local municipality to the house owner or the landlord. In case the company leases space in the office building, the house registration number must be requested from the landlord or lessor. Question 7. Is it necessary to appoint an auditor by the time of the company incorporation? The CCC does not require the company to appoint its auditor by the time of its establishment. Therefore, the appointment of auditor and the determination of the remuneration can be resolved by the shareholders’ meeting later after the company incorporation. Question 8. What is the fiscal year for a company in Thailand? The fiscal year refers to the 12-month period used by a company for accounting and tax purposes. In Thailand, the company can choose its own fiscal year (e.g., April 1 to March 31 or July 1 to June 30) as long as it is clearly stated in its Articles of Association, which does not necessarily have to follow the calendar year (January 1 to December 31). Many companies prefer their fiscal year to start and end on the same date as their parent company. This alignment simplifies the process of combining financial statements and ensures consistency in reporting across the corporate group, making financial consolidation more efficient. Question 9. How long does it take to register a company in Thailand? The registration process typically takes about 3–5 working days after the complete application and supporting documents are submitted to the DBD registrar. The DBD registrar may require additional time to review the application, depending on the volume of pending cases and the complexity of the submission. For example, if the Articles of Association of the company are complex and contain many special clauses, this may take additional time for the registrar to review and approve the application. In some instances, the registrar may request amendments to the content of the Articles of Association to bring it in line with the provisions of the CCC. For instance, a clause that grants unusual voting rights to certain shareholders might need to be revised to comply with standard company law requirements. Question 10. Can a company immediately commence business in Thailand after being registered? Once the company is registered with the DBD, it can commence business within the scope of objectives it registered with the DBD. However, if 51% or more of total shares in the company is held by foreigner, its business operation will be subject to the restriction under the FBA. By virtue of the FBA, a foreign company is prohibited from carrying out certain types of businesses in Thailand unless they obtained a Foreign Business License (FBL) or Foreign Business Certificate (FBC) issued in accordance with the approval from the Board of Investment of Thailand (BOI), the Industrial Estate Authority of Thailand (IEAT), or in compliance with any treaty to which Thailand is a party. There are 3 Lists of prohibited businesses for foreigner as annexed to the FBA as follows: List 1: Businesses that are strictly prohibited for foreigners by special reason, such as land trading, rice farming, livestock farming, radio broadcasting station, extraction of Thai medicinal herbs, making or casting Buddha Images and monk alms-bowls, etc. List 2: Businesses related to national safety or security or having impacts on arts, culture, traditions, customs and folklore handicrafts or natural resources and the environment, such as production of wood carvings, domestic transportation, salt farming, mining, etc. List 3: Businesses that Thais are not ready to compete with foreigners, such as engineering services, architectural services, legal and/or accounting services, other services, construction, retail sale, wholesale, etc. For legal assistance, please contact: [email protected] Mr. Krittin Pollagan Partner 
29 August 2025
Maritime Law

Navigating Maritime Disputes and the Role of Bills of Lading under Thai Law

In the intricate world of international trade, maritime transport is a cornerstone, facilitating the movement of goods across vast distances. Carriers engaged in this industry enter into contracts of carriage, committing to transport goods by sea from one country to another in exchange for freight. These contracts typically include terms and conditions related to the carriage of goods, liability, delivery obligations, and, critically, dispute resolution mechanisms. The key element in this industry is the Bill of Lading (B/L), a pivotal document that serves as a receipt, a document of title, and evidence of a carriage contract. B/L often includes the choice of court clause, which designates a specific court for resolving disputes. Maritime transport disputes frequently arise from issues such as cargo damage or loss, delays, and disagreements over freight charges. The international nature of maritime transport complicates these disputes, often involving parties from different jurisdictions with varying legal frameworks. Understanding the implications of the choice of court clauses in B/Ls under Thai law is crucial for businesses engaged in maritime trade with Thailand. The Bill of Lading in Thailand B/L is an essential document in maritime transport that confirms the receipt of goods for shipment and outlines the terms of the carriage contract. It can also act as a transferable document of title, allowing ownership of the goods to be transferred during transit. For businesses involved in maritime transport with Thailand, understanding how B/Ls are treated under Thai law is essential for managing disputes and ensuring smooth operations. Legal Framework In Thailand, the primary legislation governing B/Ls is the Carriage of Goods by Sea Act, B.E. 2534 (1991) (CGSA). This Act aligns with international conventions, regulating the rights and obligations of parties involved in the carriage of goods by sea. According to Section 3 of the CGSA, a B/L is defined as a document issued by the carrier to the shipper as evidence of a contract of carriage and receipt of goods, with the carrier undertaking to deliver the goods to the rightful recipient upon surrender of the document. Roles of a Bill of Lading 1. Evidence of Contract: It confirms that the freight forwarder will transport the goods to the specified destination and deliver them to the consignee under the terms of the carriage contract. 2. Receipt of Goods: It acts as a receipt, indicating that the carrier has received the goods, detailing their quantity and specifics. 3. Document of Title: It represents ownership of the goods, allowing the holder to claim the goods or transfer ownership to another party. Jurisdictional Challenges and Court Choices Disputes involving B/Ls often entail jurisdictional challenges, particularly when the choice of court clause specifies a foreign court. Such clauses aim to provide clarity and predictability but can complicate enforcement if the designated court is outside Thailand. Thai Jurisdiction The Intellectual Property and International Trade Court (IPITC), which is the specialized court established under the Act for the Establishment of and Procedure for Intellectual Property and International Trade Court, B.E. 2539 (1996), has jurisdiction with regard to international trade and intellectual property disputes, including those arising from maritime contracts. This specialized court ensures that aforesaid disputes are resolved efficiently in accordance with international standards and procedures to lead the party to justice. Enforceability of Choice of Court Clauses in B/L Thai courts generally respect the choice of court clauses in B/Ls. However, enforcing these clauses can be challenging if the chosen jurisdiction is outside Thailand. The enforceability depends on factors such as compliance with international treaties and Thai legal standards. An illustrative case is Supreme Court Judgment No. 3882/2006. In this case, the B/L specified the Hong Kong City Court for dispute resolution. However, the IPITC in Thailand was deemed competent to adjudicate the matter. The dispute involved damages for the loss or damage of goods during the sea transport party's nationality between Thailand and Spain. The Supreme Court ruled that, since the contract of carriage was executed in Thailand and Thai law was applicable, the IPITC had jurisdiction to consider and resolve the dispute. This decision highlights the authority of Thai courts to handle disputes even when a B/L specifies a foreign court, especially when significant aspects of the case are connected to Thailand, such as the place occurring ground of dispute, domicile of the party, or the place of the majority evidence for consideration and resolution the case as same the competent court. Conclusion Understanding the role of the Bill of Lading under Thai law and the associated jurisdictional issues is crucial for effectively managing maritime disputes. While B/Ls are essential documents in international trade, the disputes arising from them can be complex, particularly when jurisdictional clauses are involved. Thai legislation, including the Carriage of Goods by Sea Act and the Act for the Establishment of and Procedure for Intellectual Property and International Trade Court, provides a robust framework for resolving such disputes. The Supreme Court's decision in Judgment No. 3882/2006 underscores the capability of Thai courts to adjudicate maritime disputes, ensuring that legal resolution remains accessible and consistent with Thai legal standards. Authors Kittipoj Kittikachorn +66 2 106 8315 Ext. 134 +66 89 163 8648 [email protected] Teerawat Sawekwang +66 2 106 8315 Ext. 133 +66 8 5069 2899 [email protected]  
28 May 2025

Mastering Document Production in Arbitration: Key Steps and Pitfalls

In the realm of arbitration, where disputes are resolved outside traditional courtrooms, the exchange of documents can be essential for ensuring fairness and efficiency. Depending on the nature of the arbitration, document production, where necessary, offers parties the opportunity to request and present crucial information that supports their positions, enhancing their credibility and assist the parties in securing a favourable arbitration outcome. Depending on the nature of the case, the disclosure of relevant documents can be pivotal, promoting transparency and enabling arbitrators to make well-informed decisions. To ensure that parties make the correct requests for documents that will support their case and that the documents produced by the parties do not fall under exceptions such as confidentiality or attorney-client privilege, it is crucial to approach the document production step with meticulous care and attention to detail. Properly navigating this stage involves understanding the specific requirements and limitations of document disclosure in arbitration. Parties must be well-versed in the applicable rules and guidelines to avoid common pitfalls and ensure that their document requests are both appropriate and strategic. This careful approach not only strengthens the integrity of the arbitration process but also helps in achieving a fair and just resolution. Procedure for Document Production The process of document production in arbitration typically follows these steps: Initial Request: One party initiates the process by requesting relevant documents from the opposing party. The initial request must contain materiality and relevance of such documents to the case and arguments raised in the proceedings. It should also be specific enough so that the opposing party can identify the document being requested. Response and Objections: The responding party must respond within a specified time frame, either producing the requested documents or stating objections based on grounds such as privilege, irrelevance or undue burden. Arbitrator's Intervention: If disputes arise over the scope or relevance of requested documents, the arbitrator may intervene to resolve disagreements and ensure compliance with procedural fairness. Review and Use: Once documents are exchanged, parties review them to prepare their case, identify key issues, and potentially use them during hearings or settlement discussions. Exceptions to Production of Documents While document production is generally essential, there are certain exceptions that may be relied upon, making the review of all documents crucial. Some key exceptions include: Confidentiality: Documents containing sensitive or proprietary information may be protected from disclosure to preserve privacy and competitive advantage. Attorney-Client Privilege: Communications between a client and their legal counsel that are intended to be confidential and pertain to legal advice are typically exempt from disclosure. Work Product Doctrine: Materials prepared by or for an attorney in anticipation of litigation may be protected to safeguard the attorney's strategic planning and legal analysis. Relevance and Materiality: Only documents that are directly relevant and material to the issues in dispute should be produced, avoiding unnecessary or overly burdensome requests. Careful consideration of these exceptions is vital to maintaining the integrity and efficiency of the arbitration process. Reviewing documents meticulously ensures that privileged or irrelevant information is not disclosed, while relevant and necessary documents are appropriately shared. Non-disclosure and mis-declaration in Document Production Misuse or mistakes in document production can have severe consequences in arbitration. Errors such as non-disclosure or mis-declaration of documents can undermine the integrity of the process and lead to significant repercussions. For instance: Sanctions and Penalties: Parties that fail to disclose relevant documents or intentionally withhold information may face sanctions or penalties imposed by the arbitrators. Adverse Inferences: Arbitrators may draw negative inferences from a party's failure to produce required documents, potentially weakening that party's position in the dispute. Delayed Proceedings: Mistakes in document production can cause delays, as parties may need additional time to rectify errors, resubmit documents, or address disputes over document requests. Damage to Credibility: Parties that are found to have mishandled document production may suffer damage to their credibility and reputation, both in the current arbitration and in future legal matters. Unfavorable Outcomes: Ultimately, improper document production can lead to unfavorable outcomes, as arbitrators rely on complete and accurate information to make informed decisions. Given these potential consequences, it is essential for parties to approach document production with diligence and precision. Ensuring thorough and accurate disclosure not only upholds the fairness and efficiency of the arbitration process but also protects the interests and credibility of the parties involved. Conclusion In conclusion, document production stands as a pivotal aspect of arbitration, ensuring transparency, fairness, and efficiency in dispute resolution. By balancing disclosure with protections for privileged and confidential information, arbitrators help parties navigate towards a just and efficient resolution. At JTJB International Lawyers, we understand the intricacies of arbitration proceedings and the critical role that document production plays. Whether you are navigating through arbitration as a party or representing clients, our team is equipped to assist. Contact us today to learn more about how we can ensure your document production process is handled with diligence and expertise. Authors: KENIKA SRIMANCHANTHA, NATTHAYA ATHIPUNJAPONG and VASITA MAHATANARAT
25 September 2024
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