After a long wait, Thailand’s Parliament approved the draft Act Amending the Civil and Commercial Code (the “Amended CCC”) on September 14, 2022. The Amended CCC (which had previously been approved by the cabinet in 2020) introduces changes to corporate governance and transactional rules, as well as processes for the merger of private limited companies. Corporate Governance and Transactional Rules The changes introduced by the Amended CCC in relation to corporate governance and transactional rules include the following: Currently, incorporation requires at least three promoters. Under the Amended CCC, only two promoters are necessary. Under the Amended CCC, a notice calling a general meeting of the shareholders is no longer required to be published in a local newspaper—the updated law only requires the notice to be sent to existing shareholders via post. However, if a company issues bearer certificates, a notice calling a general meeting of shareholders must still be published either in a local newspaper or via electronic media. To pass any resolution during a general meeting of shareholders, at least two shareholders, whether in person or via proxy, representing at least one-fourth of the capital of the company, must be present. Distribution of dividends must be completed within one month of a shareholders’ meeting or the directors passing a resolution on dividend payment. A company may be dissolved by the court if, among other circumstances, the number of shareholders decreases to one, or there are other reasons that the company can no longer exist. Merger The current Civil and Commercial Code only recognizes the concept of “amalgamation” of companies (i.e., the formation of a new company by amalgamation of at least two companies, resulting in the dissolution of the amalgamating companies). It is not possible for one of the amalgamating companies to be a surviving entity. In

The Factory Act B.E. 2535 (1992) is one of the most important laws regulating manufacturing businesses in Thailand. It applies to businesses either with machinery of 50 horsepower or more in total, or with a minimum of 50 workers in a facility that conducts “factory work” as defined under related ministerial regulations. The act was recently amended to extend the period of validity for factory licenses and to make other miscellaneous changes that facilitate business. However, the act’s criminal liabilities were left unchanged, and they remain a vital tool for the authorities to exert control over relevant standards and prosecute violations. Both fines and imprisonment are available as sanctions under the law. Examples of common violations of the Factory Act and their potential penalties include: Setting up and operating a factory without acquiring a license: up to two years’ imprisonment, a fine of up to THB 200,000 (approx. USD 5,365), or both. Operating with noise level exceeding the standard set by the Ministry of Industry: a fine of up to THB 200,000. Not displaying a factory license in an open and easily visible location in the factory: a fine of up to THB 5,000 (approx. USD 134). Doing a test run of machinery prior to the start of the factory operations without notifying the authorities: a fine of up to THB 20,000. As factory activities are regulated in considerable detail, overlooking a minor change could potentially put the company at risk. The risk of violating the Factory Act increases when compliance is not a proactive policy—such as by instituting systems or safeguards to ensure adherence to the rules. Criminal Liability Violation of the Factory Act is especially a concern because criminal liability under the act is not limited to juristic persons (i.e., companies) but also applies to the director,

On August 31, 2022, the Government of Vietnam issued Decree No. 58/2022/ND-CP guiding the registration and management of operations of foreign non-governmental organizations (NGOs) in Vietnam (“Decree 58”). This decree will come into effect on November 1, 2022, replacing Decree No. 12/2012/ND-CP of the Government dated March 1, 2012, on the same matter (“Decree 12”). In general, the provisions under Decree 58 appear more detailed and stricter than those under Decree 12. In particular, there are two notable changes in Decree 58 in comparison with its predecessor: the definition of foreign NGO and the suspension and termination of a foreign NGO’s operation. New Definition of Foreign NGOs Under Decree 58, “foreign non-governmental organization” means a non-profit organization, social fund or private fund established under foreign laws; having legitimate capital sources from foreign countries; conducting development assistance and humanitarian aid activities not for profit or other purposes in Vietnam; and not receiving financial donations, calling for sponsorship, or raising funds from Vietnamese organizations and individuals. This definition has been narrowed in comparison to Decree 12, which, in addition to non-profit organizations, social funds, and private funds, also included “other social or non-profit organizations” as a category. Decree 58 further affirms that foreign NGOs must have capital sources from overseas and cannot receive funding from local sources. The last requirement had been a matter of concern in the past when foreign NGOs wanted to receive donations from Vietnamese entities. In practice, the prohibition of local funding had been known as an unwritten policy of the government; it is now officially recognized in Decree 58, and will prevent foreign NGOs from approaching local funding sources. More Specific Suspension and Termination Regulations Under Decree 12, there was no separation between the circumstances in which a foreign NGO’s operation would be suspended and those

Attorneys from Tilleke & Gibbins’ corporate and commercial group in Bangkok have contributed the Thailand chapter of the new Lex Mundi Sustainability and Competition Global Practice Guide. Featuring contributions from Lex Mundi member firms from around the world, the guide seeks to provide in-house and outside counsel with information on ESG (environmental, social, and governance) measures related to the competition regime in each jurisdiction. The chapters, which cover 44 jurisdictions around the world, are provided by member firms in the global Lex Mundi legal network. Each chapter covers the following main areas: Presence of ESG measures and sustainability agreements in the competition regime; Guidance from authorities related to ESG initiatives and competitor working groups; Calculation and reporting of ESG efforts; Precedents involving ESG and sustainability matters in the country; and Antitrust regulations that could lead to ESG litigation. To read the Thailand chapter or browse the other jurisdictional contributions, please visit the Lex Mundi website.