You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 7, 2023

A Comparison of M&A Laws: Thailand

Subscribe to Updates
Asia Business Law Journal

M&A transactions for private and public limited companies in Thailand can be achieved in many ways, including acquiring shares from existing shareholders of a limited company, subscribing to new shares issued by a limited company, an amalgamation of limited companies, acquiring all or part of the assets or business of a limited company, and a merger of private limited companies.

The Civil and Commercial Code is the key legislation governing private limited companies, while public limited companies are mainly governed by the Public Limited Company Act of 1992, as amended, unless listed on the Stock Exchange of Thailand (SET), in which case the Securities and Exchange Act of 1992, the Securities and Exchange Commission (SEC) Rules, the Capital Market Supervisory Board (CMSB) Rules, and the SET Rules also apply. The legal framework for most M&A transactions concerning Thai limited companies is also provided in both the code and the Public Limited Company Act.

New Type of Combination

On 7 February 2023, the Act Amending the Civil and Commercial Code came into effect, introducing a new merger scheme as another approach to business combination for private limited companies. A merger under the amended Civil and Commercial Code is a merger of two or more companies, resulting in either a new company with all merged juristic entities ceasing to exist or one of the companies continuing to exist with the other companies ceasing to exist as juristic entities.

The merger replaces the “amalgamation” in the previous version of the code, which merely prescribed a legal framework and identified the implications of mergers but did not specify a concrete legal framework for the acquisition of assets or businesses.

Arguably, the first type of merger described above is the same as an amalgamation under the previous version of the code, while the end result of the second type of merger is similar to an entire business transfer where one of the companies continues to exist after the merger. The difference is that the amended code has put the same legal procedures in place for both types of mergers, including:

  • An approval resolution from a shareholders’ meeting;
  • Registration of the resolution with the public registrar;
  • Arrangement for a purchase of shares from disapproving shareholders;
  • A notice to creditors for raising any objections;
  • A joint meeting between the shareholders of all merging companies; and
  • Registration of the merger with the public registrar.

After a merger (of either type), the new or surviving company assumes all assets, liabilities, rights, obligations, and responsibilities of the dissolved companies, by virtue of the amended Civil and Commercial Code.

For listed companies, the requirements and procedures under the Public Limited Company Act, the Securities and Exchange Act, the SEC Rules, the CMSB Rules, and the SET Rules also need to be considered.

Common M&A Structures

Although M&A transactions can be structured in many ways in Thailand, the acquisition of an existing limited company’s shares is the most common one. It is less complicated, has fewer legal procedures and makes for a smoother transition of business ownership (when the acquisition is of all or most of the shares) than an asset or business acquisition. The acquisition of shares in an existing limited company (often referred to as a target) can occur through an acquisition of shares from the target’s existing shareholders or through a subscription of new shares issued by the target (or through a combination of these). These two methods are described below.

In the acquisition of shares from existing shareholders, shares in a private or non-listed public company can be acquired through a share sale and purchase agreement with the selling shareholders that sets commercial terms such as the amount of shares to be sold, date of the transaction closing, selling price, pre-closing conditions, warranties and indemnities. An acquisition of shares in a private company can be executed by the selling shareholders through a simple share transfer instrument specifying the details as required by the Civil and Commercial Code, together with recording the transactions in the target company’s register of shareholders. A transfer of shares in a non-listed public company becomes effective between the parties on the endorsement and delivery of the share certificate to the purchaser, pursuant to the Public Limited Company Act.

An acquisition of shares from the existing shareholders of a listed company can be arranged with or without a sale and purchase agreement and by way of a mandatory or voluntary tender offer. An acquisition with one or more selling shareholders may trigger a mandatory tender offer for the remaining shares if it falls under certain conditions, such as the acquisition of shares reaching a trigger threshold of 25%, 50%, or 75% of the total voting rights of the target. Alternatively, a voluntary tender offer for all shares of the target or for 25% or more but less than 50% of the shares is another possible way of acquiring shares in a listed company.

An acquirer can also subscribe to newly issued shares in a private or non-listed public company, which can proceed through a share subscription agreement that includes commercial terms such as the amount of shares to be allotted and subscribed, the subscription price, pre-closing conditions, warranties, and indemnities. Under this structure, the target company needs to increase its registered capital in accordance with the legal procedures prescribed in the Civil and Commercial Code or the Public Limited Company Act, including obtaining an approval resolution of not less than three-quarters of all stock held by the shareholders in the shareholders’ meeting and having the capital increase registered with the public registrar.

As for a listed company, the increase of registered capital and offering of newly issued shares on a private placement basis must be approved by the SEC in accordance with the commission’s rules and regulations, as well as any other applicable laws. The SEC has revamped various rules relating to private placements by listed companies with a view to streamlining the offering process and reducing the documentation required for submission. Most of these rules were revised by the CMSB on 28 December 2022 and came into effect on 1 July 2023. The key amendments include elimination of the application requirement, requiring submission of an independent financial advisory opinion, simplification of the market price calculation and clarification of the offering period.

Foreign Ownership Restrictions

Thailand’s legal limitations on foreign ownership may present notable challenges for foreign investors anticipating cross-border M&A deals in the country. These limitations can impact the choice of M&A structure and a foreign investor’s controlling power over a target company.

The Foreign Business Act, 1999, is the main law governing foreign ownership of businesses in Thailand. Under the Foreign Business Act, companies registered overseas, or registered domestically with 50% or more of the shares held by non-Thais, are deemed to be foreign. Foreign companies are restricted from engaging in certain businesses in three lists in the Foreign Business Act. This means foreign investment in companies operating a restricted business is limited to less than 50% of the shares unless a foreign business license is granted, or the business is granted a conditional exemption by virtue of the provisions of the act, ministerial regulations, investment promotion laws, industrial estate laws, or treaties between Thailand and certain countries.

Furthermore, certain business types are strictly prohibited to foreign nationals under specific laws, and there is no way for a company with foreign majority ownership to operate such a business. An example of this is the land transport business under the Land Transportation Act, 1979, as amended, which can only be engaged in by a limited company with no less than 51% of its shares held by Thai nationals. Apart from that, the Land Code Act, 1954, also generally prohibits foreign nationals from owning land in Thailand unless otherwise permitted under investment promotion or industrial estate laws.

Legal considerations such as the effect of Thailand’s restrictions on foreign ownership are just one of the issues that can be made clearer by a robust legal due diligence exercise, which is especially important for foreign parties and others who may not be familiar with Thai laws. Legal due diligence entails a thorough review of corporate structure, business operations, regulatory compliance, requisite licenses, labour, property, and other relevant aspects of a target company, and this will clarify whether there are any foreign ownership restrictions concerning the target company or the proposed investment. Other comprehensive due diligence, such as tax and finance due diligence, can be carried out in parallel. These can help investors determine the most efficient M&A structure and method for carrying out legally compliant business activities through a target company in Thailand.

This article first appeared in A Comparison of M&A Laws, published by Asia Business Law Journal.

Related Professionals

Practices

Corporate/M&A

Location

RELATED INSIGHTS​ 

September 15, 2026
The Myanmar Investment Commission (MIC) has issued a notification that gives investors with projects in Myanmar clearer guidance for securing approval and for changing, expanding, or exiting an approved project. Issued on August 19, 2026, MIC Notification No. 5/2026 replaces MIC Notification No. 26/2021 and sets procedures for state or regional investment committees to review, approve, and supervise investment projects, including project amendments, investment increases, land-use rights applications, compliance inspections, and suspension or termination of approved businesses. Endorsement Application Timeline and Deemed Acceptance In Myanmar, prospective investors seeking approval under the Myanmar Investment Law generally do so through an MIC permit or an MIC endorsement, depending on the nature of the investment. While certain large-scale investment projects require an MIC permit, projects that are not required to obtain an MIC permit may instead apply for an MIC endorsement. Investors seeking MIC endorsement for their planned projects typically submit their applications to the relevant state or regional investment committee. These committees are established under the Myanmar Investment Law and are authorized to approve investments of less than USD 5 million, subject to the project’s nature and location. MIC Notification No. 5/2026 specifies that upon receiving an endorsement application, the relevant investment committee office will check it for completeness and determine whether it can be considered at the state or regional level or must be referred to the MIC; if it must be forwarded to the MIC, this will be done within 10 working days. If an application is within its purview, the committee may reject the endorsement application within 15 working days of receipt; otherwise, the application is deemed accepted. If approved, the endorsement certificate will be issued within 10 working days of the approval decision, subject to applicable procedures. Endorsement Certificate Amendment The notification clarifies which amendments a state
Read More
September 9, 2026
Certain securities, derivatives, and treasury activities in Thailand were opened to foreign investors when Thailand’s Ministry of Commerce published two new ministerial regulations in the Government Gazette on August 28, 2026. The regulations significantly broaden the service activities that foreign-owned businesses may conduct without a license or certificate under the Foreign Business Act B.E. 2542, as amended (FBA). Securities and Derivatives Business Exemptions Prior to the issuance of these ministerial regulations, the exemptions covered (1) securities brokerage and derivatives brokerage with their only underlying assets being agricultural commodities, financial instruments, and securities; and (2) dealers, advisers, and fund managers conducting derivatives business under Thailand’s derivatives laws. The ministerial regulations provide broader exemptions. In addition to derivatives under the laws on derivatives as before, the following two major categories are provided: Derivatives whose underlying assets or variables fall outside the scope of Thailand’s laws on derivatives. This addresses a gap in the previous framework, which did not comprehensively exempt derivatives tied to nonregulated underlying assets or variables, such as certain commodities. Foreign brokers, advisors, and fund managers can now facilitate a broader range of hedging and risk management instruments without triggering FBA licensing requirements. Derivatives traded outside a derivatives exchange, or over the counter (OTC), whose payments are calculated by reference to foreign exchange rates or interest rates. This removes an FBA licensing barrier for foreign providers of widely used OTC hedging products, broadening the solutions available to importers and exporters managing currency exposure and to borrowers seeking greater certainty over financing costs. The ministerial regulations also exempt brokers and agents handling transactions involving either of these two derivatives categories. For securities businesses, the ministerial regulations add exemptions for margin loans used to purchase securities and for securities repurchase transactions. These additions clarify whether such activities qualify as exempt brokerage
Read More
September 4, 2026
Foreign business restrictions on telecommunications, treasury center businesses, and intragroup support services were eased when Thailand published the Ministerial Regulation Prescribing Service Businesses Not Requiring Permission for Foreign Business Operations (No. 5) B.E. 2569 (2026) in the Government Gazette on August 28, 2026. The ministerial regulation expands the categories of service businesses that foreign investors may operate without a foreign business license (FBL) under the Foreign Business Act B.E. 2542 (1999) (FBA). Of particular relevance to the telecommunications, fintech, and technology sectors, the ministerial regulation exempts: Type 1 telecommunications licensees, which do not have their own networks; Treasury center businesses operated in accordance with Thailand’s exchange control regulations; and Certain intragroup administrative, human resources, and information technology management services. Telecommunications Services Foreign-owned businesses providing telecommunications services under a type 1 telecommunications license may now operate without obtaining an FBL. This may streamline market entry for qualifying telecommunications and digital infrastructure businesses. The exemption applies only to the FBA licensing requirement. Operators must continue to comply with applicable requirements under the Telecommunications Business Act and the regulations of the National Broadcasting and Telecommunications Commission, and the change does not affect foreign ownership restrictions applicable to type 2 or type 3 telecommunications businesses. Treasury Center Businesses The ministerial regulation also exempts qualifying treasury center businesses from the FBL requirement. This may facilitate centralized treasury functions in Thailand, including liquidity management, foreign exchange management, and intragroup funding arrangements. Treasury center operations remain subject to applicable requirements of the Bank of Thailand and other competent authorities. Intragroup Administrative, HR, and IT Services Certain administrative, human resources, and information technology management services provided between affiliated entities are also exempt, provided the relevant entities satisfy prescribed ownership or management criteria. The exemption is available where the service provider and recipient are related through specified ownership
Read More
September 1, 2026
Thailand has taken another step toward liberalizing its foreign business framework, exempting additional service activities and derivatives brokerage or agency businesses from the licensing requirements of the Foreign Business Act (FBA). Since the FBA came into effect, Thailand has taken a measured approach to opening its economy to foreign investment. While the FBA regulates foreign participation in businesses that may affect domestic interests, the framework has also evolved to allow foreign participation in certain business activities where sector-specific laws and regulatory frameworks already provide sufficient oversight, making additional FBA restrictions unnecessary. This is particularly true where Thai businesses are sufficiently capable of competing in certain service sectors, or where liberalization is intended to facilitate the provision of services among companies within the same corporate group. Against this backdrop, two new ministerial regulations have been issued pursuant to the FBA. Service Businesses Under the FBA Under the FBA, certain categories of business are restricted for foreign operators. List 3 of the FBA sets out businesses that foreigners may operate only if they obtain a foreign business license (FBL) or a foreign business certificate (FBC), or unless a specific exemption applies. List 3 (21) covers “other service businesses,” which is a catch-all provision that captures a wide range of service businesses not specifically enumerated elsewhere in the FBA. In practice, this means that most service activities carried on by foreigners in Thailand require an FBL or FBC unless otherwise exempted. Notwithstanding the foregoing, the FBA provides a mechanism to address this breadth by empowering the Minister of Commerce to issue ministerial regulations excluding specific types of service businesses from List Three (21). Once a service business is so excluded, foreigners may operate it without obtaining an FBL or FBC. Prior to the new regulations, four ministerial regulations had been issued to
Read More