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Three Corporate Structures To Consider In Company Formation In Bangkok

When setting up a company in Bangkok, it is best to have a legal team to extend some assistance with matters concerning the legal documents. The legal team can also clarify vague legal issues or matters to the business owner.

Business owners planning to use the corporate business structure for their company formation in Bangkok may choose from the three alternatives. It is best to study each alternative carefully first before deciding on a particular structure to follow.

Three Corporate Structures

The three corporate alternatives have unique things to offer. The foreign investor with a Thai partner as the major stockholder can choose among the three alternatives.

  1. Nominee Structure (Simple Company Set-Up)

It is possible to have a quick and cheap company set-up if the corporate design and structures follow Thailand’s law blueprint. The simple company structure poses a challenge to the Thai stockholder to do unlawful act toward the business interest of the foreigner.

To protect the foreign investor, he has in his possession a signed blank share transfer agreements that the Thai shareholders have prepared. Furthermore, in such a structure the foreign investors can be complacent that the Thai partners will not act unlawfully.

  1. Legally Compliant Structure (Sophisticated Company Set-Up)

This type of corporate structure can be shaped in accordance with the business agreement between the Thai stockholders and foreign investors. This structure requires detailed and bespoke bylaws and other protection mechanisms to guarantee the foreign minority stockholder’s undivided profits, voting power in the shareholder meeting, and full control rights. To accomplish this, there are three requirements that must be met:

  • Eagerness to analyse the shareholders’ particular demands.
  • Expertise regarding the modules and tools to change the structure of the company from the law’s blueprint.
  • Acceptance of additional costs of set-up and higher time input in the formation process of the company.
  1. Protected Company Structure (Two-Tier Set-Up with a Holding)

The two-tier structure, which is a high-end solution, requires another Thai holding company. These steps should be fulfilled when setting up a two-tier structure:

  • Establish an operating company.
  • Appoint the holding company that must be compliant with the concept of a two-tier structure and particular aspects of the operating company.
  • Streamline the corporate side’s companies to lay the two-structure in place.
  • Both companies must sign the financing and commercial agreements with the protection package.
  • There should be no error in the entire process.

It is important to be careful in setting up the corporate business structure for the company formation in Bangkok to avoid inconvenience later.

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