The Department of Business Development has Revised the Criteria for the Registration of Partnerships and Limited Companies with Capital Exceeding Baht 5 Million

In accordance with the Order of the Central Company and Partnership Registration Office No. 1/2024 regarding the Criteria and Supporting Documents for the Application for Registration of Establishment, Capital Increase for Partnerships and Limited Companies and the Merger of Limited Companies with Capital Increases (the “Order”), the Department of Business Development (“DBD”) has updated the registration criteria effective as of 1 July 2024.

The key points of the Order are as follows.

Applicants must submit a letter confirming receipt of payment for shares with money, property or labour along with the registration application. Specific documentation requirements for partnerships and limited companies with registered capital exceeding Baht 5 million, if paying with money¹, include the following:(1) A document issued by the bank certifying that the managing partner/director has received payment for the share investment/share payment (bank certification)²; and

(2) A confirmation letter from the managing partner/director applying for registration, stating that the amount shown in the bank document is the actual money received for the share investment/share payment³. This confirmation letter is available for download in the DBD’s website⁴.

If the applicant is unable to submit the required documents - (1) bank certification of payment; and (2) a confirmation letter from the managing partner/director with the registration request - they must provide a letter explaining the reason for their inability to submit the required documents on the date of registration. The reason may be due to a situation where all of the managing partners/directors are foreigners or the business is promoted/permitted to operate by an investment promotion organisation, such as the Board of Investment (“BOI”) or Industrial Estate Authority of Thailand (“IEAT”).⁵

When the registrar accepts the registration, a document issued by the bank certifying that the partnership/company has received  payment for the share investment/share payment (bank certification) as well as a confirmation letter from the partnership/company (signed by managing partner/director) stating that the amount shown in the bank document is the actual money received for the share investment/share payment must be submitted within 15 days from the date upon which the registrar orders the registration. If these documents are not submitted within this timeframe, the registrar will note on the certificate that “This juristic person has not submitted documentary evidence that can confirm receipt of payment for shares or share capital according to the registered capital”⁶.

The registrar will cancel this note only when the juristic person submits the complete additional documents (both the bank certification and the confirmation letter) or reduces the capital to less than Baht 5 million.⁷

Based on verbal consultation with officials, the DBD has cancelled the process of submitting documents after registration for cases where there is any managing partners/directors is Thai which has bank account in Thailand and can receive capital investment/ share payment in his/her bank account. Then, in this case, an applicant can submit documents in (1) and (2). Then, a company, after incorporation, is not required to submit further.

Moreover, receipts (DBD form) that are part of the application form for registering a partnership/company or increasing capital still need to be submitted as part of the application, in addition to the confirmation letter.

The criteria and documents for capital increase and mergers are the same as detailed in Clauses 3 and 4 of the Order, respectively. The requirements for submission of a letter confirming receipt of payment for shares with property or labour along with the registration application are as follows:

If paying with property, a confirmation letter from the property owner is required, stating that the property will be transferred to the juristic person, or a letter confirming the juristic person's use of the property, along with the property details. If the property is registered, a copy of the ownership document must also be submitted.⁸

If paying with labour, a confirmation letter from the juristic person confirming payment of shares with labour, along with documentary evidence of the labour used for investment, such as a copy of an employment contract.⁹

It is important to note that when paying for shares with property or labour, there is no provision for submitting the confirmation letter after the registration date. The required documents must be submitted to the registrar along with the registration application on the registration date.

In summary, based on the Order, when registering a company with capital exceeding Baht 5 million and the payment for the shares is performed with money, the applicant must submit: (1) bank certification; and (2) a confirmation letter along with the registration request. If these documents cannot be submitted on the registration request date, the applicant must provide another document, a letter explaining the reason, and then submit documents (1) of the established company and (2) issued by the company within 15 days from the date of registration. If documents (1) and (2) are not submitted within 15 days from the date upon which the registrar accepts the registration, the registrar will note in the certification letter that the juristic person has not submitted any documentary evidence that can confirm receipt of payment for shares or shares according to the registered capital.

This is intended merely to provide a regulatory overview and not to be comprehensive, nor to provide legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contact the following:

Nuttaros Tangprasitti
Partner
Maychaya Phoraksa
Attorney-at-law

Authors