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

October 16, 2015

The Single-Shareholder Companies Law and Its Expected Impact on SMEs

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

In 2008, amendments to the Civil and Commercial Code (CCC) reduced the minimum number of shareholders required to incorporate a limited company to three from seven. This change seemed to encourage new business registration, as the number of newly incorporated juristic persons in Thailand has increased at an average rate of 8 percent per year since then, except for 2009 and 2014.

The Business Development Department counts 400,000 limited companies in Thailand, with 60,000 new ones expected to be registered this year. More than half these companies have less than THB 1 million in registered capital and a third between THB 1 and 10 million. In the first quarter alone, 17,309 small and medium-sized enterprises (SMEs) were registered and operating as limited companies.

All of these limited companies have at least three shareholders, but in practice there is often only one shareholder who truly owns and manages the company. When incorporating a limited company, this shareholder can incur unnecessary costs as he or she attempts to find at least two others to form the company.

For this reason, the department is now studying the viability of incorporating companies with a single shareholder. It has sought advice from Chulalongkorn University’s law faculty, which has assembled a research team.

This team has considered the laws of other countries including Japan, Singapore, Britain, the US and Vietnam. As well, the model law of the UN Commission on International Trade Law in the past required more than one shareholder to incorporate a limited company, as companies were established by contractual relationship.

However, in line with the evolution of business customs, court rulings or amendments to statutory law, single-shareholder companies are now permitted in many jurisdictions provided that the principal concepts of a limited company remain unchanged. These concepts include: (i) a separate legal entity; (ii) limited liability; (iii) control by shareholders; and (iv) transferability of shares.

The research team released a tentative draft law named the Incorporation of a Company by a Single Shareholder Act for a public hearing in August. It invited both government agencies and private-sector entities to provide input.

It was revealed the new single-shareholder company scheme would be a separate enactment from the CCC, under which any laws and regulations that applied to a limited company would also apply to a single-shareholder company as long as they did not contradict the nature of a single-shareholder company.

The key points of the draft are as follows:

  • Any one person or juristic person can be a promoter and file an application to incorporate a limited company.
  • There is no minimum par value.
  • The single shareholder can hold a statutory meeting and pass resolutions, and hold an ordinary meeting or extraordinary general meeting and pass resolutions, without the need to call for a shareholders’ meeting.
  • The shareholder is not liable, directly or indirectly, for company debt with other persons solely on the basis of being the shareholder of the company (which is made clearer than as stated in the CCC).
  • For any transaction between the company and the shareholder that is not the normal business of the company, the director shall cause such transaction to be made in writing andrecord all agreements in the minutes of the directors’ meeting (a new good governance measure).
  • If the company’s sales volume or income does not reach the criteria set in the ministerial regulations, the company may not need to audit its books. There is currently no cut-off figure for the amount the company can waive for auditing.
  • The company can amalgamate with other single-shareholder companies and transfer all shares to one shareholder.
  • A limited company formed under the CCC can be converted into a single-shareholder company and vice versa.

The single-shareholder company programme may encourage the registration of SMEs as limited companies, as they would have greater access to financial resources and lower compliance costs compared with limited companies incorporated under the CCC.

As well, other stakeholders such as suppliers and creditors will also benefit from the legal status as a registered limited company, which, for example, provides more convenience to review the status of a single-shareholder company through the Business Development Department.

The draft is currently being reviewed by the department’s legal division. In all likelihood, it will be proposed to the National Legislative Assembly, at which time it should become clearer whether the new law will, in practice, benefit and promote SMEs.

Download Full Article
Related Professionals

Practices

Corporate/M&A

Location

RELATED INSIGHTS​ 

June 9, 2026
On April 28, 2026, the Central Bank of Myanmar (CBM) issued Notification No. 18/2026 introducing the new Foreign Remittance Business Regulations. The new regulations apply to companies intending to operate foreign remittance businesses in Myanmar that are not licensed banks, non-bank financial institutions, or other financial institutions. The regulations supersede and replace the previous regulatory framework governing foreign remittance businesses under CBM Notification No. 21/2019. While the overall structure remains familiar, the new regulations introduce more detailed requirements for licensing, operations, reporting, and compliance, with a stronger focus on transparency and regulatory oversight. Broader Licensing Requirements Under the new regulations, applicants must submit detailed business plans describing the use of information technology and mobile platforms, along with clear plans for handling remittances from workers abroad and resolving customer complaints. Financial Thresholds and Reporting Requirements The baseline financial thresholds remain unchanged. Licensees must maintain a security deposit of MMK 100 million in an escrow account, along with a separate revolving fund dedicated solely to remittance operations. The new regulations introduce more structured reporting obligations. Licensees are now required to submit daily remittance transaction data by the next business day before noon, in addition to monthly and periodic reporting requirements. Foreign bank account statements must also be submitted regularly, and licensees must provide updates on business operations every six months. Strengthened AML and CFT Framework The new regulations place a greater emphasis on anti-money laundering (AML) and counter financing of terrorism (CFT), with tighter controls over management changes. Any changes in shareholding, share transfers, or the appointment of key management personnel such as the managing director require prior approval from the CBM. Licensing Fees and Validity The new regulations increase licensing costs, while maintaining the same validity period of three years. The new regulations provide more detailed grounds for suspension and
Read More
June 4, 2026
On May 19, 2026, the Cabinet of the Royal Thai Government approved, in principle, revisions to Thailand’s visa exemption scheme and visa on arrival (VOA) program, as proposed by the Ministry of Foreign Affairs and the Ministry of Tourism and Sports. The revisions represent a tightening of Thailand’s immigration framework and will affect a broad range of short-term visitors. Background On July 15, 2024, Thailand expanded its visa exemption scheme by increasing the permitted period of visa-exempt stay from 30 days to 60 days in order to promote tourism, support the country’s post-pandemic economic recovery, and facilitate international travel. Under this revised scheme, passport holders from 93 countries and territories (an increase from the previous 57 countries and territories) have been permitted to enter Thailand without a visa and remain in the country for up to 60 days per entry for purposes including tourism, business engagements, urgent work, and ad hoc assignments. In addition, eligible visitors may apply at the Thai Immigration Bureau for a further 30-day extension of stay. Key Changes The proposed revisions would revoke the current 60-day exemption and reinstate the previous stay period, thereby reducing the maximum permitted stay for eligible travelers to 30 days per entry. In addition, the number of countries and territories eligible under the 30-day visa-exemption scheme is expected to be reduced to 54. The scope of the VOA scheme would likewise be significantly narrowed, with the number of eligible countries reduced from 31 countries to just four (Azerbaijan, Belarus, Serbia, and India). Further, Thailand is expected to introduce a new 15-day visa exemption category for nationals of Seychelles, the Maldives, and Mauritius. The revised framework would also limit each country or territory to a single visa exemption privilege in order to simplify Thailand’s immigration framework and reduce overlapping immigration privileges.
Read More
May 25, 2026
After several years of policy discussion and continued efforts led by the Ministry of Commerce (MOC) to relax the list of reserved businesses under the Foreign Business Act B.E. 2542 (1999) (FBA), the reform process has now reached a significant milestone. On May 12, 2026, the Thai cabinet approved in principle two draft subordinate legislative instruments aimed at delisting certain reserved business activities under the FBA and reducing licensing requirements for foreign business operators. These developments signal a renewed and concrete effort by the government to modernize Thailand’s business regulatory framework in order to attract foreign investment and boost Thailand’s competitiveness in the global market. Nine Businesses Set for FBA Delisting Below is a list of the nine businesses that are being targeted for delisting from the FBA’s restrictions. A draft ministerial regulation would delist the first eight reserved businesses, while a royal decree has been drafted to delist the ninth business: Telecommunications services (Type 1 license only, covering operators without their own telecommunications infrastructure), under the supervision of the Office of the National Broadcasting and Telecommunications Commission. Treasury center services subject to the Foreign Exchange Control Act B.E. 2485 and under the supervision of the Bank of Thailand. Securities-collateralized lending, pursuant to the laws governing securities and exchange and derivatives regulated by the Securities and Exchange Commission. Agency, dealer, advisory, or fund management services relating to derivatives where the underlying assets fall outside the scope of the Derivatives Act B.E. 2546 (2003) Intra-group shared services, including administrative, human resources, and IT functions Intra-group domestic debt guarantee services Leasing of partial space for installation of financial service machines and automatic vending machines for employee use Petroleum drilling services Trading of agricultural product derivatives through a futures exchange, with physical delivery or receipt of agricultural products at a futures exchange–designated
Read More
April 29, 2026
Vietnam’s education sector is entering a new regulatory era. On December 10, 2025, the National Assembly adopted a series of new and amended laws in the field of education, including the 2025 Law on Vocational Education, the 2025 Law on Higher Education, and the amended Law on Education No. 123/2025/QH15 (Amended Law on Education). These laws together took effect on January 1, 2026, marking a significant reform of Vietnam’s legal framework governing the education sector. The legislative package introduces a new lawmaking approach under which foundational and principle-based provisions are codified in the Amended Law on Education, while the Law on Higher Education and the Law on Vocational Education serve as specialized statutes providing supplementary, sector-specific regulatory detail tailored to their respective subsectors. The Amended Law on Education fundamentally restructures how educational institutions are established, governed, and licensed, with direct implications for private investors, foreign-invested entities, and education service providers operating in Vietnam. Below are several highlights of the key changes under the amended law, especially in the private sector, that stakeholders should understand: Change in the National Education System In addition to primary education, lower secondary (junior high school) education is now compulsory in Vietnam. Accordingly, diplomas are no longer awarded upon completion of lower secondary school but only for upper education levels. The national education system is also expanded through the introduction of vocational high school as a new level of vocational education. Such reform creates additional learning pathways that not only enable learners to pursue both further education and participate in the labor market, but also better align education and training with socioeconomic development needs. New Hurdle for Joint Investors: Mandatory Corporate Entity Requirement Where two or more investors jointly establish an education institution, the investors are no longer permitted to directly establish such an institution.
Read More