Property under company name: protection of the foreign shareholder rights

Foreigners cannot be owners of land in Thailand and, accordingly, have to use alternative methods of buying property. The standard solution is company registration and buy the property on its name.

The company must have at least 3 shareholders and 51% of the shares must belong to a Thai citizen or a Thai legal entity (or two) so that the company has Thai status. The remaining 49% may be held by a foreigner.

Protection rights of foreigners:

Foreigner becomes a company’s director. All documents are signed by the director; accordingly, no transactions or changes in constituent documents can be concluded without his knowledge.

If the alignment of forces in the company is as follows: 51% belongs to one Thai and 49% to two foreigners, it is desirable that one of the foreigners has more than 25% of the shares - the number of shares that ensures the right to block special decisions of the shareholders meeting. In fact, the actions of the Thai majority in this case can be suppressed by a foreign minority alone. Conversely, it is not advisable that one Thai shareholder own more than 25% of the shares.

After registering a company, each Thai shareholder must sign a consent agreement to transfer the company’s shares to another person (share transfer). A preventive measure is used mainly when transferring a company to a service of another law firm, which usually entails the replacement of Thai shareholders.

Author: Aleksandra Agapitova

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