New DBD Capital Verification Requirements

Thailand governs foreign direct investment via a strict regulatory framework, the foundation of which is the Foreign Business Act B.E. 2542 (1999) (“FBA”). The FBA generally prohibits foreign individuals and foreignowned entities from engaging in restricted business activities in Thailand unless the requisite permission is obtained. This permission may take the form of a Foreign Business License (FBL), specific treaty protections, or investment privileges granted by targeted investment promotion structures and programs. The FBA also prohibits both Thai nationals and foreigners (who are permitted to operate businesses in Thailand under the FBA) from acting in collusion with a foreigner (as defined in the FBA) who has not yet received permission to operate in Thailand, in a manner that may or will circumvent the FBA regulations. In particular, the law prohibits Thai nationals and nonforeign entities from operating a business jointly with a foreigner in a way that falsely presents the Thai party as the sole operator, including situations in which the Thai party acts as a nominee for purposes of holding shares in a partnership or limited company on behalf of a foreigner.

The Department of Business Development (“DBD”), which is the primary regulatory authority, has introduced several measures to prevent circumvention of foreign shareholding rules through the use of proxies or nominees. One of the key safeguards is the prescreening of incorporation documents. When an applicant files for registration of a new business entity, the DBD now requires supplementary evidence demonstrating that the Thai shareholder possesses genuine financial capacity. This requirement is mandatory in the following situations:

1. Where a foreigner subscribes for an ownership interest in a partnership or limited company in an amount representing less than 50% of the partnership or share capital of the investee entity; or
2. Where a limited company’s shareholder is not a foreigner, but the only authorized director is a foreigner, or where a foreigner is a mandatory joint signatory.

In the past, the DBD issued the Order of the Central Partnership and Business Registration Office No. 205/2555 (“Order No. 205/2555”) which required applicants to provide a letter issued by a commercial bank that confirms sufficient capital in the relevant shareholder’s bank account, in line with the relevant share contribution. However, this may no longer be sufficient to satisfy the current requirements.

The DBD recently issued Order of the Central Partnership and Business Registration Office No. 2/2568 (“New Order”), which introduces stricter documentation requirements for company registrations. The New Order supersedes and revokes Order No. 205/2555 on the same issue. The New Order requires applicants to submit bank statements for the three months period, covering from the date of subscription to the partnership or shares, as well as the preceding month in which the subscription occurs. The bank statements must be from the specific account used to make the payment for the partnership interest or share subscription of each Thai partner or shareholder. The statements also must clearly display withdrawal or transfer records that correspond to the subscription payment, including both the date and amount of the transaction.

These documentary requirements apply to all new partnership and company registrations filed with the DBD on and after 1 January 2026.

The requirement for a threemonth transaction history is intended to allow the DBD to assess whether the funds are “seasoned” and genuinely owned by the Thai shareholder, rather than temporarily deposited for registration purposes. The presence of the relevant funds in the Thai shareholder’s account for a sustained period prior to the share subscription also provides evidence of the shareholder’s independent financial capacity, which, in turn, supports the inference that there is no need to rely on capital provided by a foreign nominee and makes it more difficult to engage in the recycling of capital through the individual’s account.

In this context, the DBD’s review of the transaction history serves to verify that the Thai shareholder maintained sufficient funds in his or her bank account prior to the share subscription. Although this review cannot conclusively exclude the possibility that the funds were sourced, directly or indirectly, from a foreign party, it nevertheless operates as an important evidentiary safeguard against nominee arrangements. The requirement strengthens the presumption that the share subscription was effected using the Thai shareholder’s own funds and reduces the risk that the shareholder is acting as a nominee for a foreign investor. As a result, the New Order, together with other applicable regulatory requirements issued by the DBD, preserves and reinforces the integrity of the DBD’s company registration process.

This article is intended as merely a regulatory overview and is not intended to be comprehensive, or to constitute legal advice. Should you have any questions on this or other areas of law, please do not hesitate to contact:

Nuttaros Tangprasitti
Partner

Sattapat Suradecha
Associate

Authors