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Amendments to the Civil and Commercial Code: new rules for companies in Thailand
15/11/2022
On the 14th of September, Thailand’s Parliament approved a draft Act amending the Civil and Commercial Code (the CCC).
The amendments to the CCC introduce important new changes to corporate governance and transactional rules for Thai companies. The amendment also contains new processes relating to the merger of private limited companies.
Key points
- Under the new amendment, only two shareholders will be necessary to incorporate a new company.
- Notice for calling a general meeting of the shareholders will no longer be required to be published in a local newspaper.
- In order to pass any resolution during a general meeting of shareholders, at least two shareholders must be present.
- The amendments to the CCC will add the new term “merger” as another possible type of business combination.
What are the new corporate governance and transactional rules?
The new amendment to the CCC introduces the following changes to corporate governance and transactional rules in Thailand:
- Currently, at least three shareholders are required when incorporating a new company. Under the new amendment, only two shareholders will be necessary.
- The requirement to submit a notice calling a general meeting of the shareholders will no longer be required to be published in a local newspaper and now only requires the notice to be sent to existing shareholders via post. However, if a company issues bearer certificates, a notice calling a general meeting of shareholders must still be published either in a local newspaper or via electronic media.
- To pass any resolution during a general meeting of shareholders, at least two shareholders must be present. These shareholders can be present either in person or via proxy and must represent at least one-quarter of the capital of the company.
- Distributing dividends must be completed within one month of a shareholders’ meeting or the directors passing a resolution on dividend payment.
- A company may be dissolved by order of the court due to the number of shareholders decreasing to one.
What does the amendment say about mergers?
As it stands, the current version of the Civil and Commercial Code only recognizes the concept of “amalgamation” of companies. The amalgamation of companies is the formation of a new company by the amalgamation of at least two companies. After the amalgamation has been completed, one of the amalgamating companies can’t remain an independent entity.
The amendments to the CCC will add the new term “merger” as another possible type of business combination.
A merger will be where, one company is merged into another company, and the merged company will be dissolved while the other will survive. This means that if company A will be the surviving entity, company B will be dissolved and company A will maintain its status as a juristic person, automatically assuming the assets, liabilities, rights, obligations, and responsibilities of Company B.
What happens next?
If the Senate makes no further amendments, the draft act will be proposed for endorsement by the King and become effective 90 days after its publication in the Government Gazette.
How can Belaws help?
If you need more information about corporate governance or M&A in Thailand, why not talk with one of our experts right now?
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Frequently asked questions about work permits in Thailand
How much is a work permit in Thailand?
Official fees for a Work Permit in Thailand are 3,000 THB.
How long does it take to get work permit Thailand?
Once you have the correct Visa, the work permit process takes about 10 days to complete.
Are foreigners allowed to work in Thailand?
Yes foreigners can work in Thailand but they require the correct visa and a work permit to do so.
Can I change tourist visa to work permit in Thailand?
Yes it is possible but first the applicant will need to change from a tourist visa to a Non-Immigrant B visa. Once they have the Non-Imm B, they can apply for a Work Permit.
How do I get a 1 year visa for Thailand?
One year Visas are usually available for people who are employed by a Thai company, those married to a Thai national and those who hold a retirement Visa.
How can I live and work in Thailand?
In order to live and work in Thailand you need to have received a job offer from a company who can support your work permit application. Alternatively, you can open your own company in Thailand.
What type of visa is work permit?
A Work Permit is not a Visa, it is a seperate document which allows the holder to legally work in Thailand. In order to get a work permit, holders are required to obtian the relevant visa, in most cases a Non-Immigrant B visa.
How long does a work permit take to process?
Approximately 10 days
How can I get permanent residence in Thailand?
For those wishing to seek permanent residency, they must satisfy one of the following options.
- You have held a Thailand Work Visa and Work Permit for at least three years, and:
- You have an Extension of Stay based on Employment at the time of application
- You have worked at your current company for at least one year at the time of application
- You had a monthly salary of at least 80,000 Baht for two consecutive years or you filed a tax return for an annual income of at least 100,000 Baht for two consecutive years
- You have invested at least 3 Million Baht in a limited or public company in Thailand
- Family: You are a close family member of a Thai citizen (parent, child or spouse)
- Expert: You have at least a BA Degree and are employed in a position in which you have to work in for at least three consecutive years.
How can I stay in Thailand for a year?
One year Visas are usually available for people who are employed by a Thai company, those married to a Thai national and those who hold a retirement Visa.
Can foreigners become Thai citizens?
Yes, it is possible for foreigners to be able to take Thai citizenship, however, there are strict guidelines and requirements which must be satisfied.
How long can foreigners live in Thailand?
This depends on which Visa the foreigner holds. Holders of Non-Immigrant Visas based on Work, Marriage or Retirement can apply for yearly extensions of stay which can be an unlimitied amount of times (as long as they still meet the application requirements). There are also Visas which allow longer periods of stay such as the Thailand Elite Visa as well.
How much money do I need to move to Thailand?
The answer to this will depend entirely on your lifestyle, where you choose to live and your expectations.
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