Blog Right Sidebar

Setting Up Company Partnerships under Thai Law

Setting Up Company Partnerships under Thai Law

Siam Legal International | October 10, 2016 | Business in Thailand, Civil and Commercial Law, Company Law, Company Registration

The Civil and Commercial Code of Thailand provides for the formation of partnerships as is found in the laws of other countries. However, partnerships are normally not formed by foreign investors due to particular difficulties that arise due to the Foreign Business Act of 1999. Generally speaking, the formation of a limited company is more advantageous to foreign investors since majority Thai-owned companies with foreign directors are still considered “Thai nationals” for the purposes of the Foreign Business Act. In contrast, partnerships, even if formed with majority Thai capital investment, are still considered “foreign nationals” if the managing partner is a foreign national. Nevertheless, it is possible for foreign nationals to operate business in Thailand as a partnership in certain cases, such as if they are operating a business that is unrestricted by the Foreign Business Act, or if they have obtained a Foreign Business License or a Foreign Business Certificate under the Thai-U.S. Treaty of Amity. A few of the notable points regarding the operation of a partnership is as follows:

There are three forms of partnerships: an unregistered ordinary partnership, a registered ordinary partnership, and a limited partnership.
As for the unregistered ordinary partnership, it refers to a business partnership arising from a contract and does not constitute a juristic person. The partners are jointly and unlimitedly liable for the obligations of the partnership and are bound to each other by the terms of their partnership agreement. If an ordinary partnership is then registered, it will have the status of being a juristic person. Nevertheless the partners are still personally liable to third parties.

Read more

February 16, 2019No comments,
Withdrawing Shareholder Meeting Resolutions

Shareholder meetings play an important role in the governance of Thai limited companies since the Civil and Commercial Code require that limited companies be managed by the directors under the control of meetings of the shareholders (called “general meetings” in the Code). The primary instrument used by the general meetings to govern the company are shareholder meeting resolutions which are passed by a majority vote of the shareholders attending the meetings. However, an important legal issue that arises in regards to shareholder meeting resolutions concerns the withdrawal of resolutions after they have been passed by a meeting. Section 1195 of the Civil and Commercial Code provide for the withdrawal of company resolutions. According to that section, a resolution must be withdrawn by court order. Furthermore, only a shareholder or director has standing to challenge a resolution and may make such an application to the Court.

Read more

February 16, 2019No comments,
‘Better if you do’: Phuket Immigration chief urges foreigners to re-register addresses, even if staying off-island just one night

PHUKET: The Chief of the Phuket Immigration Office, Col Kathathorn Kumthieng, has confirmed that all foreigners registered as living in Phuket must re-report their address to immigration after being registered as staying in a hotel within Thailand, even for just one night.

The confirmation follows complaints from long-term expats that they were fined B2,000 for not re-registering their home addresses after travelling within the country.

“By law, it is a requirement to register your address within 24 hours after being registered elsewhere, such as at a hotel or a guesthouse,” Col Kathathorn told The Phuket News this week.

“This is because the hotel or guest house will have to register you, also by law, as residing somewhere other than your residence. So when you return to your residence, you must inform immigration,” he explained.

The same also applies for foreigners living in Phuket who leave the country and return, say for a weekend trip to Singapore.

Col Kathathorn played down concerns for honest, law-abiding expats.

“Although it is the law, if it’s a short stay, for example a day or two, and nothing happens to prompt officials to check then there usually won’t be a problem,” he said, for stays away from home within the country.

“However, if you become involved in an incident and become a suspect in a case for example, not re-registering your address will be a big problem. So it’s better if you do.”

Regardless, although the overall effect for most foreigners caught not re-registering their address each time on returning home to Phuket might be deemed negligible, foreigners will be liable to a B2,000 fine for each infringement and the incident will remain on their immigration record.

Read more

February 16, 2019No comments
Phuket light-rail up open to public by 2023, assures official

PHUKET: Local residents will be able to get on board Phuket’s light-rail by 2023, a top official behind the project has assured.

Niran Kaetkeaw, the Director of the Regional Bureau of Transportation and Traffic Promotion, Office of Transport and Traffic Policy and planning (OTP), said on Friday (Oct 26) that the project was making good progress.

“The e-bidding for the project is expected to start next year 2019, with bids closing in 2020. We expect construction to start in 2020, with construction completed by 2022,” Mr Niran said.

“The first year of operation will be a trial period, with the light-rail fully operational and open to the public by 2023 for certain,” he added.

Mr Niran explained that the Mass Rapid Transit Authority of Thailand (MRTA), which has now been granted legal authority to oversee the project, began seeking feedback from relevant agencies and the public in order to draft the terms of the Public-Private Partnership (PPP) government tender to be offered.

“The MRTA will then submit their report to the Ministry of Transport and assist in expediting the preparation of the government tender documents,” he said.

“Construction of the first 41.7 kilometres of the project will be launched in the first half of 2022, or before the beginning of 2023. The budget for this section will be B30.154 billion.

“The entire project will be along a total of 58.52km, with a total project cost of B39.406 billion,” he said.

The northern section of the light-rail route will mainly follow Thepkrasattri Rd, Mr Niran noted.

Read more

 

February 16, 2019No comments,
Central commits to B1bn Phuket lifestyle mall

BANGKOK: The Central Group of Companies, Thailand’s biggest retail conglomerate, plans to spend B1 billion to build its first outdoor lifestyle mall in the Bang Tao area of Phuket next year.

Lertvit Pumipitak, the group’s senior executive vice-president of corporate business development, said the company will start to develop Porto de Phuket on 50 rai in Bang Tao in 2019, with construction to be complete by the end the year.

The construction is divided into two phases. The first phase is on 20 rai, focusing on the development of an outdoor lifestyle mall covering 40,000 square metres.

The lifestyle mall will consist of seven features, including a Phuketian Mercado and a Food Hall with eateries, cafes, bars and beverage stores.

Central Food Hall, a restaurant and cafe zone, a multi-design house offering various creative products from top designers around the world, as well as new formats of Supersports, Power Buy, B2S and FamilyMart convenience store are all planned for the mall.

Nick Reitmeier, executive vice-president of Food Hall and international buying for Central Food Retail Co (CFR), the operator of Tops Supermarket and Food Hall, said the company plans to invest B120-150 million to build a new Food Hall at the Porto de Phuket project covering 3,000 square metres.

The group already operates Central Festival, Central Floresta and Robinson department stores and lifestyle centres in Phuket. In addition to Porto de Phuket, the group is building a Zen Department Store in Patong Beach slated to open before the year’s end.

Read more

February 16, 2019No comments,
Making an impact, Giving Children Hope and a Future

Asia Center Foundation (ACF) is a christian charity registered as a Non Government Organization (NGO) on Phuket, Thailand in operation since 2002. Our mission is to help disadvantaged children and children-at-risk by providing care, training and education so that they will fulfill their God-given potential.

The ACF’s vision is to restore children to God, transform and develop them into leaders influencing their world.

ACF employs local Thai staff and also makes use of the help of local and international volunteers to engage and work with underprivileged, impoverished children and children-at-risk on Phuket.

Read more

February 16, 2019No comments
We make 40,000 cold calls every week – this is what we’ve learned

Cold Calling is, by some distance, the most controversial topic in the sales community right now.

There’s been a lot of articles written about it and everyone has strong opinions. Most people are talking from personal experience and some with the benefit of having run a team.

I work for a company that makes more than 40,000 cold calls per week, to all parts of the globe. Does that give me more insight than most? I’m not sure, but here’s my tuppence worth to add to the debate, tell me what you think once you’ve read about what we’ve learned.

First the good news – it does still work – no matter what anyone tries to tell you.

Now the bad; cold calling isn’t easy and never will be…period. But the worst thing about it? The time it takes.

Does that time make it a viable way for an expensive BDM to spend their time? Again, things aren’t as black and white as most arguments I’ve seen and read. The genuine answer is; it depends.

On what?

Geography is, perhaps surprisingly, one of the biggest variables. Both where you are calling to and from. Brand recognition is huge. Having an engaging story is way more important than your product. Saturation plays a part – we know this more than most as a telemarketing agency – I’m not sure there’s a marketing or sales director (our usual KDM’s) who hasn’t been called a thousand times by telemarketing agencies. Timing is more important than people give it credit for. Data is the essential fuel required for cold calling. Ability is important, experience less so. What you say isn’t nearly as important as how you say it (despite the endless articles about what words to use). But attitude is, by some distance, the biggest single determinant of a successful outcome.

Before I go any further – we need to define what I’m talking about when I say cold call.

I went to see Joanne Black give a talk this morning (thanks John Smibert and Tony Hughes for inviting her Down Under) and I agree with Joanne’s definition as; someone who I have never spoken to, who doesn’t know me and whom I’m now calling out of the blue.

Everything else has caveats.

Talking of caveats or perhaps disclaimers – I had better cover some of those before I go any further. These are my personal observations made from watching, hearing and getting results on the more than 40,000 cold calls we, as in the company I work for, make every week to various parts of the world. What I’m sharing are generalisations. But I won’t share data, as my boss wouldn’t dream of letting me, and I doubt our clients would be very happy if I did. I see exceptions to everything I’m about to say… every single day.

Read more

February 16, 2019No comments,
Acquisition of Land in Thailand by a Foreign Government

The acquisition of land or a condominium unit in Thailand by a foreign government for official use, such as for use as an embassy or consulate, is not covered by any specific legislation. Therefore, assuming that a foreign government intended to acquire land or other immovable property in Thailand for official use, such an acquisition must be done by reciprocal agreement between nations, although not falling under the terms of Section 86 of the Land Code (as stated in Land Department Announcement No. 0610.4/893 issued on 2 August 1994). Furthermore, the Thai Cabinet has issued a number of resolutions on this matter which can be summarized as follows:

19 February 1958: According to this resolution where a foreign government wishes to purchase land for official use or for the use as a residence for their officials in an area not exceeding 15 rai, regardless of whether it is one plot or several, then the Land Department may proceed to allow the acquisition. If the amount to be purchased is more than the amount specified, then permission may sought from the Cabinet on a case by case basis.
1 April 1997: This resolution addressed the acquisition of land by social countires. Since the acquisition of land in Thailand by foreign governments had to follow the principle of reciprocity and since socialist governments do not allow foreign governments to acquire land in their countries, then accordingly Thailand could not allow socialist countries to purchase land in Thailand, but could only allow them to lease the land. However, due to the interest of maintaining stable relations with foreign countries, the Thai government would have to purchase the land from the private owner first and then enter into the lease agreement with the foreign socialist government.
An interesting issue arose when the Taiwan Economic and Trade Office in Thailand wished to purchase a land and building for official purposes. The Land Department considered the matter and concluded that the acquisition of land in Thailand by foreign government had to be done on the basis of reciprocity. However, since the Thai government had not recognized the sovereignty of Taiwan, the Thai government could not enter into any such reciprocal agreement with the Taiwanese government. Therefore, on 5 February 2000, the Cabinet allowed the Thai Economic and Trade Office to enter into an agreement with the Taiwan Economic and Trade Office regarding reciprocity in the purchase and acquisition of land for both parties.

The acquisition of land by foreigners is a complex legal subject in Thailand. Foreigners seeking to acquire land in Thailand are advised to consult with competent Thai legal counsel before proceeding.

Read more

February 16, 2019No comments,
Reference Guide for Corporate Buyers of Land in Thailand

The requirements and legal procedures involved in buying land in Thailand as a company (particularly with foreign shareholders) is quite complex. Siam Legal has therefore compiled this reference guide to help its corporate clients prepare the necessary documents and evidence required in order to avoid needless mistakes and costly delays when appearing before the Land Official for the transfer of ownership. The guide below can also generally apply to condominium transactions, except that foreign companies are not restricted from owning condominium units outright.

Read more

February 16, 2019No comments,
Thai Limited Companies: Shareholder Meetings

Shareholder meetings are an important element in the management of Thai limited companies, since the authorized directors of the company must manage the company under the control of the meetings of the shareholders. In order to hold a meeting of the shareholders, a meeting has to be called according to the procedure defined in the Civil and Commercial Code. One of the procedures according to the Code is that a notification must be delivered to the shareholders.

Section 1175 paragraph one requires that an advertisement must be published in a local newspaper at least once before the date of the meeting no less than 7 days in advance and a notification must be sent by post with acknowledgment of receipt to all shareholders whose name appears in the shareholder registry no less than 7 days in advance of the date of meeting. However, for extraordinary meetings of the shareholders, the aforementioned procedure must be performed no less than 14 days in advance of the date of the meeting.

According to Section 1244, a notification shall be deemed to be delivered to a shareholder if it is delivered to him personally. Furthermore, if the notification has been delivered to the address of the shareholder that appears in the shareholder registry, the shareholder shall be deemed to have been duly notified.

According to Thai Supreme Court Decision No. 384/2506: “Section 1175 of the Civil and Commercial Code regarding notifications of a general meeting of the company only requires that a notification of the meeting be sent no less than 7 days. Therefore, where the Defendant, who is a company liquidator, has sent a notification by post no less than 7 days in advance of the meeting and Plaintiff, who is a shareholder, has received it, then it shall be deemed that Defendant delivered the notice correctly according to the law and it is not relevant as to what day Plaintiff actually received it.”

Furthermore, Section 1175 paragraph two requires that the time and location of the meeting be indicated in the notification, as well as the agenda for the meeting. If a special resolution is to be considered, then the substance of the resolution must be included in the notice.

According to Thai Supreme Court Decision No. 2644/2520 “a general meeting wherein a matter is considered outside of the agenda, a resolution passed by the shareholders to pay a debt which the shareholders themselves are the creditor and have a personal interest violates Section 1174 and 1175.”

Thai corporate law is complex. Foreigners who are in charge of managing a Thai limited company are advised to consult with competent Thailand lawyers.

Read more

February 16, 2019No comments,