The concept of single shareholder company has been in many discussions for quite some time in Thailand. Single shareholder company is not new in many countries. The single shareholder company allows flexibility to many entrepreneurs or sole proprietors who want to start their own businesses. According to the Thai Civil and Commercial Code (“CCC”), it requires at least 3 shareholders to form a limited company. However, in many cases, one shareholder holds most of the shares in the limited company and have other two shareholders holding minimal shares so as to qualify on the number of shareholders. As such this new law is expected to help increasing the number of registered companies in the system as the requirements for registering the company have been removed, especially, the minimum number of shareholders and thereby reduce the possibility of conflict among shareholders. It is expected that, apart from encouraging an individual to run his or her business in the form of the corporate entity, this development might stimulate the presence of small businesses in Thai economy.
In September 2020, a public hearing process was conducted by the Department of Business Development (the Ministry of Commerce). It is expected to be enacted in the near future. We will keep you updated on how it progresses.
Even this draft legislation aims to ease the criteria of the company formation, there are details that you would need to carefully consider before the implementation including analysis of other laws related to foreign business participations and special licenses, etc. A thorough analysis could be helpful for your decision making. We are more than happy to assist and guide you through the requirements of the relevant business formations.