Hong Kong’s has introduced new Companies Ordinance which have been welcomed according to the South China Morning Post.

The new ordinance is intended to make it even easier for small companies to conduct business in Hong Kong.

 Chaninat & Leeds offers expert advice in Thailand company registration and company law 

Most importantly, the requirement of a nominal value of shares has been removed. The memorandum of association has been abolished and merged into the articles of association.

The new law also allows companies to dispense with annual general meetings by unanimous shareholder consent and also facilities virtual meetings using conferencing technology.

Read the full report here

Coin Desk has reported that the Bank of Thailand (BoT) may have changed its position on the  legal status of bitcoins in Thailand, suggesting that Bitcoin Co Limited can resume trading in Thailand.

Previously there were reports that the Bank of Thailand may have declared the use of bitcoins to be illegal in Thailand.

Despite the company’s lengthy absence from the market, David Barnes, managing director of Bitcoin Co LTD said that trading volumes have already returned to 2013 levels. “It’s about in line with, or a slight improvement from, where we left off in July,” he said.

According to Thailand business lawyers, Chaninat & Leeds , the Bank of Thailand issues laws and regulations concerning currency and financial transfers to and from Thailand. Banks normally require licenses  from the BoT documenting the transaction. According to Chaninat & Leeds  bitcoin transactions may present a practical problem for businesses in Thailand with regards to Thailand taxation and money laundering laws because there may be a lack of physical evidence such as receipts which could create difficulties when filing taxes in Thailand.

Read the full article here

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If you are considering the prospect of establishing a Thailand branch of an existing company or starting a new business in Thailand, there are numerous factors to consider and decisions to make, particularly if you wish to proceed in accordance with Thai company law. There are numerous laws that will affect you and your company in Thailand (and abroad). Merely filling out forms without the knowledge of the application of the law can lead to serious complications and other problems.

It helps to become familiar the Foreign Business Act 1999. This sets out the rights of foreign companies in Thailand, as well as what is not permitted.

Most, although not all, foreign businesses looking to set up in Thailand require a Thai majority shareholding. Many foreigners prefer to form a Thai majority company, to allow the company to operate a business in a category that is otherwise restricted to foreigners. The registration of a Thai majority company generally requires less registered capital and less paperwork than the registration of a foreign company. A Thai majority company can also buy land.

Others however prefer the simpler but highly illegal practice of nominee shareholders. A nominee shareholder is a shareholder in name only; in reality nominee shareholders lacks any real financial stake or interest in the company.  There are companies in Thailand who will offer to supply Thai nominee shareholders. This is extremely high risk as not only will you have no knowledge of who the shareholder of your company is now will they owe you any loyalty, they are likely to be professional shareholders who will probably be listed as shareholders in multiple companies which will soon wave a red flag to the authorities.

Rather than break the law,  it is prudent to take qualified legal advice from an experienced Thailand lawyer. There are ways to deal with these situations but careful consideration needs to be taken of an individuals needs and resources.

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56 Phuket Firms Believed To Be In Breach Of The FBA

The Commerce Ministry have reported that 56 companies in Phuket have allegedly breached the Foreign Business Act (FBA) by using Thais acting as nominees to enable foreigners to hold a majority control.

 The use of “nominee” shareholders is expressly forbidden by the FBA.

Most of the suspected companies are owned by Russian interests, and are connected to food and beverage trading, and financial agencies.

Prior to the introduction of the act in 1999, it was common practice to utilize loan-pledge agreements as a method for non Thai minority shareholders to control majority Thai shareholders.  This entails the Thai shareholders borrowing funds from the foreigner and “pledging” the shares back as security. However, the FBA made this practice illegal. While enforcement of the Thai nominee prohibitions of the Foreign Business Act has been infrequent to date, this news serves as a clear warning say Thailand lawyers, that this is now something the authorities are taking seriously.

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