Foreigners can buy a business in Thailand, but the deal needs careful structuring. The Foreign Business Act restricts foreign ownership across around 50 business categories, so the first step is confirming whether your activity is permitted, or whether you need a Foreign Business Licence, BOI promotion, or the US-Thai Treaty of Amity. Buyers choose between a share purchase (acquiring the company and its existing liabilities) or an asset purchase (taking only selected assets). Thorough due diligence on tax, employment, and lease history is what protects the buyer. Most SME deals take three to six months and cost four to eight percent of the deal value.
Introduction:
Buying a business in Thailand is often faster than building a company from scratch, but the process is considerably more complex than many foreign investors initially expect. While an existing business may already have staff, licences, operations, and an established revenue stream in place, a Thailand business acquisition may become problematic if the legal structure and liabilities are not properly reviewed before signing.
Two of the most common issues are restrictions under the Foreign Business Act (FBA), which limits foreign ownership in many sectors and undisclosed tax, accounting, labour, or social security liabilities inherited from the target company. For this reason, proper due diligence is one of the most important parts of buying a business in Thailand.
This guide explains the recommended requirements and processes for buying a business in Thailand, including deal structuring, due diligence Thailand procedures, transaction documents, completion processes, and what to expect after completing the transaction.
A proper Thailand business acquisition does not only involve a simple share purchase agreement. In practice, most transactions involve tax, employment, and immigration compliance, particularly where foreign directors, Board of Investment (BOI) privileges, or foreign staff are involved.
At Lex Nova Partners, our team regularly supports foreign investors through the full acquisition process, including legal due diligence, transaction structuring, BOI and FBA considerations, employment matters, and post-acquisition compliance in Thailand.
Key Points
- Buying an existing business in Thailand is often faster than starting from scratch because it provides immediate access to staff, licences, revenue, and supplier relationships, but it also means inheriting the company’s historical liabilities such as unpaid taxes, employment disputes, and compliance issues.
- The Foreign Business Act (FBA) restricts foreign ownership in around 50 categories of business across three lists, meaning foreigners often need a Foreign Business Licence, BOI promotion, or the US-Thai Treaty of Amity to legally own and operate in many sectors.
- Deals can be structured as a share purchase (buying the entire company and its liabilities) or an asset purchase (buying only selected assets to avoid inherited liabilities), and the right choice depends on the target’s compliance history, tax exposure, and operational needs.
- Thorough due diligence covering corporate, financial, legal, employment, and lease matters is essential, and the purchase agreement should include seller guarantees, indemnity provisions, and protections like in-out clauses that tie part of the payment to post-sale performance.
- Common costly mistakes include trusting seller documents without verification, ignoring employee severance liabilities, using illegal nominee shareholder structures, overlooking change-of-control clauses in contracts, and treating immigration and work permit planning as an afterthought.
Why Foreign Investors Are Buying Thai Businesses Instead of Starting From Scratch
For many foreign investors, buying a business in Thailand is faster and more practical than creating a new company from the start. One of the biggest advantages of purchasing an existing business is that an existing business may already hold the licences, registrations, operational approvals, and supplier relationships needed to operate. This can significantly reduce the time, administrative work, and operational setup typically involved when establishing a new company from scratch.
Another important advantage is that an existing business may already be structured to support a visa and work permit for a foreign employee immediately. For example, the company may already meet the required registered capital thresholds and Thai employee ratio requirements needed for work permit sponsorship.
A Thailand business acquisition can also provide immediate access to staff, revenue, customers, lease agreements, and an established market presence. This is particularly important in sectors where operational continuity and brand reputation matter, such as hospitality, hotels, restaurants, F&B, export manufacturing, e-commerce, software, and professional services.
In many cases, buying a business in Thailand allows the investor to begin operating almost immediately rather than spending months dealing with incorporation, licensing, recruitment, and setup delays.
However, acquisitions also come with significant risks. When acquiring an existing company, the buyer does not only acquire the business itself. They may also inherit historical tax exposure, employment disputes, accounting irregularities, compliance failures, hidden debt, and operational liabilities that were not immediately visible during the initial stages of negotiations. This is one of the main reasons why conducting proper due diligence procedures in Thailand is critical before any transaction moves forward.
Can a Foreigner Buy a Business in Thailand? The Foreign Business Act Reality
Thailand allows foreign ownership of businesses and also permits buying a business in Thailand as a foreigner. However, not all business activities can be undertaken by a foreign owned business.
The Foreign Business Act, (Foreign Business Act B.E. 2542 (1999)), is the primary legislation governing foreign business ownership in Thailand. The Foreign Business Act Thailand was introduced to protect certain sectors for Thai nationals while continuing to welcome foreign investment into areas that support economic development.
The Foreign Business Act is used to determine whether a business activities are restricted to a foreign business, whether a licence may be granted, and whether a company structure complies with Thai law.
Who Is Considered a “Foreigner” Under the FBA?
Section 4 of the foreign business act Thailand has a wide definition of what is considered a “foreigner” The definition extends beyond nationality and covers both individuals and juristic persons. A foreigner includes:
- A natural person who is not of Thai nationality.
- A juristic person not registered in Thailand.
- A juristic person registered in Thailand where at least 50 percent of the capital shares are held by non-Thai individuals or foreign entities, or where foreign investment represents at least half of the total capital.
- A Thai-registered juristic person in which at least half of the shares are held by persons falling within the above categories, directly or indirectly.
- A limited partnership or registered ordinary partnership where the managing partner is a non-Thai national.
The Three Restricted Business Lists
The foreign business act Thailand restricts approximately 50 categories of business, divided into three schedules:
List 1 – Strictly Prohibited Activities
List 1 covers businesses considered essential for national interests, such as newspaper publishing, animal farming, land trading, and certain agricultural activities. Foreigners are prohibited from engaging in these activities for “special reasons.” No licence or approval mechanism is available.
List 2 – Activities Related to National Security and Infrastructure
List 2 includes businesses connected to national security, domestic transportation by land, water, or air, and certain activities involving arts, culture, and natural resources. Foreign participation may be permitted, but only with approval from the Minister of Commerce and the Cabinet. In practice, such approvals are rare and subject to strict scrutiny.
List 3 – Service Businesses Where Thai Nationals Are Deemed Not Ready to Compete
List 3 is the most commercially relevant category for foreign investors. It includes “other categories of service businesses” not otherwise exempted by ministerial regulations. Foreign companies may apply for a Foreign Business Licence, subject to approval by the Director-General of the DBD and the Foreign Business Committee. A Foreign Business Licence also requires a minimum capital of at least THB 3 million per restricted business activity. Many professional services, consulting, and trading structures fall within this list. For the lawful routes to majority or full foreign ownership, see our guide on 100% foreign business ownership in Thailand.
Business Activities that Allow 100% Foreign Ownership Without Special Permissions
The following business activities are not restricted under the Foreign Business Act in Thailand and can be undertaken by a 100% foreign owned business.
Export Companies
Thailand actively encourages exports, and companies who exclusively export products outside Thailand can be foreign owned. In order to maintain this status, export companies must ensure their operations and revenue are only international, and they can’t sell directly within the Thai domestic market.
Manufacturing Companies
Manufacturing companies in Thailand can be 100% foreign-owned as manufacturing is not on Thailand’s “restricted” list for foreign ownership under the Foreign Business Act (FBA). This allows foreign investors to own and operate manufacturing businesses without needing a Thai partner.
Another advantage for manufacturing companies is their eligibility for a BOI promotion. BOI promotions offer many advantages including different types of tax exemptions including Corporate Income Tax exemptions and Tax exemptions on the import of machinery. BOI promotions can also allow full foreign ownership and the ability to own land which can be used for their factory etc. For current incentives, see our update on the latest BOI incentives for foreign investors.
However, if the manufacturing business involves activities related to restricted sectors (e.g., agriculture, mining, certain types of food processing), it may still be subject to FBA limitations.
Common Misconceptions About Foreign Ownership
There is a common misunderstanding that incorporating a Thai company automatically allows majority foreign ownership. However, if the business activity falls within a restricted list, foreign majority ownership may require the foreign investor to apply for a Foreign Business licence or an alternative option such as a Board of Investment (BOI) promotion or the Treaty of Amity (for American companies). The Treaty of Amity grants US investors national treatment but still excludes several reserved sectors, including land ownership, communications, transport, banking involving depository functions, fiduciary functions, and the exploitation of land and natural resources. In practice, most of the business activities that foreign investors wish to undertake are likely to be restricted by the foreign business act.
If the business cannot obtain either a Foreign Business Licence or BOI promotion and wishes to engage in a restricted activity, the foreign investor will have to work with a Thai partner.
Another misconception is that nominee shareholding arrangements can be used as an easy way to bypass these restrictions. However, recently Thai authorities have increased scrutiny of structures designed to conceal effective foreign control. The DBD has strengthened investigations into shareholder legitimacy, capital flows, and voting rights arrangements, particularly during 2024 and 2025.
Since 1 April 2026, DBD Order No. 1/2569 also requires a Confirmation of Investment letter in certain cases involving foreign shareholders or foreign authorised directors, certifying that all shareholders have genuinely invested and that no nominee arrangement exists. For more on how Thai authorities are policing these structures, see our note on Thailand’s tightening rules on nominee shareholders.
Enforcement Trends and Penalties
Thai authorities are now actively examining whether Thai shareholders are genuine investors or merely holding shares on behalf of foreigners to avoid the restrictions of the Foreign Business Act.
Non-compliance with the Foreign Business Act in Thailand can result in significant consequences, including fines, imprisonment, suspension of operations, and in severe cases, business closure. Under Section 36 of the Foreign Business Act, a breach can carry imprisonment of up to three years and/or a fine of THB 100,000 to THB 1,000,000, alongside additional criminal liability under the Penal Code for false statements. Directors may also face personal liability if they knowingly participate in unlawful structures.
For advice on 100 percent foreign ownership structures and the most appropriate approach for your proposed activities in Thailand, we invite you to contact our team of experts directly. We can assess your business model, review the applicable restrictions under the Foreign Business Act, and advise on the most suitable legal pathway for your specific circumstances.
Share Purchase vs Asset Purchase: How to Structure the Deal
When buying a business in Thailand, one of the most important decisions is whether the transaction should be structured as a share purchase or an asset purchase. The structure of the transaction affects tax exposure, liabilities, employment obligations, licences, contracts, and the overall level of risk assumed by the buyer.
In practice, the most appropriate structure depends on the nature of the business, the industry involved, the company’s compliance history, and whether the buyer wishes to acquire the existing legal entity itself or only selected business assets. Certain regulated sectors may also require additional approvals or restructuring considerations under the Foreign Business Act, for example if the company is Thai owned and engaged in a restricted activity to a foreign company.
The sections below explain the differences between a share purchase and an asset purchase in Thailand, including the advantages, disadvantages, and practical considerations foreign investors should understand before proceeding with a transaction.
Purchasing Only the Assets of a Company
When considering buying a business in Thailand, investors may choose to purchase only selected assets of a company rather than acquiring the entire legal entity. In practice, an asset purchase allows the buyer to take control of specific business assets, such as equipment, inventory, intellectual property, customer databases, or lease rights, without assuming ownership of the company itself.
This structure is often used where the target company has historical liabilities, unresolved compliance issues, or operational risks that the buyer does not wish to inherit. Unlike a transaction structured through a share purchase agreement Thailand transaction, the buyer can selectively acquire assets while leaving behind unwanted liabilities and obligations.
Advantages of Purchasing the Assets of a Company
One of the main advantages of an asset purchase is the ability to avoid inheriting the seller’s liabilities. Because the buyer is not acquiring the legal entity itself, obligations such as unpaid taxes, employment disputes, outstanding loans, litigation, or previous regulatory breaches generally remain with the seller. This can significantly reduce legal and financial exposure following completion of the transaction.
An asset purchase also gives buyers greater flexibility. Investors can select only the assets relevant to their commercial objectives while excluding underperforming assets or unnecessary liabilities. In certain situations, this may be considered lower risk than proceeding under a full share purchase agreement Thailand structure.
Disadvantages of Purchasing the Assets of a Company
Despite these advantages, asset purchases also create practical and operational challenges. Purchasing assets alone does not automatically transfer the seller’s goodwill, brand reputation, customer relationships, supplier contracts, or workforce. Existing employees usually need to be rehired under new employment arrangements, while commercial contracts often need to be renegotiated from the beginning.
Asset purchases may also result in higher transaction costs. Different asset classes can attract different taxes, transfer fees, and registration requirements in Thailand. In addition, certain licences and regulatory approvals may not be transferable, requiring the buyer to apply for entirely new operational licences before the business can continue operating.
Purchasing the Whole Business
For many foreign investors, buying a business in Thailand can provide a faster and more practical route into the market than starting a company from scratch. An existing business may already have staff, licences, operational systems, suppliers, customers, and revenue in place, allowing the buyer to begin operating more quickly after completion.
Faster Route to Revenue and Operations
One of the main advantages of acquiring an existing business is the ability to continue operations without major interruption. Rather than spending months building a customer base, developing operational systems, and establishing supplier relationships, the buyer acquires a business that is already generating revenue and operating within the market.
This can reduce the time required to achieve profitability and allow the investor to focus on growth and expansion rather than initial setup.
Existing Infrastructure and Operational Systems
An established business may already have offices, production facilities, IT systems, machinery, inventory, and operational processes in place. This reduces the need for major upfront investment and allows the buyer to continue operations immediately after completion.
In addition, existing businesses often already have established supplier relationships, service providers, logistics arrangements, and internal workflows that have been tested over time. This can reduce operational risk compared to launching an entirely new business model.
Trained Workforce and Management Continuity
Acquiring an existing business also allows the buyer to inherit an experienced workforce that already understands the company’s operations, systems, customers, and internal procedures. This can reduce recruitment and training costs while helping maintain operational continuity after the acquisition closes.
For service-based businesses in particular, retaining experienced staff can be critical to preserving customer relationships and maintaining revenue stability.
Existing Market Presence and Brand Recognition
An established business may already benefit from brand recognition, customer loyalty, supplier confidence, and market credibility built over many years of operation. Rather than entering the market as an unknown company, the buyer acquires an existing reputation and operating history within the industry.
The company’s historical operations may also provide valuable insights into customer behaviour, pricing, competitors, and future growth opportunities within the Thai market.
Existing Licences and Regulatory Approvals
In many cases, an established business may already hold the operational licences, registrations, and approvals required to legally conduct its activities in Thailand. Depending on the industry involved, obtaining these approvals independently can sometimes take significant time and administrative work.
This can be particularly valuable in regulated sectors where licensing and operational approvals form a major part of the company’s commercial value.
Existing Capital and Work Permit Structures
Another practical advantage is that the company may already satisfy requirements for supporting foreign employees and directors. For example, the business may already meet registered capital requirements and Thai employee ratio requirements necessary for work permit sponsorship.
This can simplify the process of obtaining visas and work permits for foreign owners or management after completion of the transaction.
Thailand’s Investment Environment
Thailand continues to attract foreign investors due to its strategic location, developed infrastructure, manufacturing base, and regional access to ASEAN markets. Government incentives through the Thailand Board of Investment (BOI) may also provide additional advantages for qualifying businesses, including foreign ownership exemptions, tax incentives, and work permit support for foreign staff.
For many investors, acquiring an existing business in Thailand provides a faster route into the market while reducing many of the operational challenges associated with starting a company entirely from scratch.
The Step-by-Step Acquisition Process in Thailand
When looking to buy a business in Thailand, the following steps should be considered.
1. Conducting Thorough Due Diligence
Due diligence is a key part of a successful acquisition of an existing company. Undertaking due diligence allows prospective buyers to evaluate the target business’s financial health, legal compliance, and performance while identifying any hidden liabilities or risks.
Due diligence protects your investment by providing a complete understanding of the business’s value and potential risks.
Key Areas of Focus
- Corporate Documentation:
- Company Registration: Verify that the business is properly registered with the Department of Business Development (DBD) and compliant with Thai laws, including the Foreign Business Act.
- Shareholder and Director Details: Review the company’s Articles of Association, shareholder agreements, and board resolutions to ensure everything matches with the proposed sale.
- Financial Health:
- Financial Statements: Examine audited financial reports, tax returns, and bank statements to assess revenue trends, profitability, and solvency.
- Outstanding Liabilities: Check for any unpaid debts, tax arrears, or pending legal disputes that could impact future operations.
- Contracts and Agreements:
- Lease Agreements: Ensure that property leases are registered with the Land Department if exceeding three years, and review renewal clauses and termination rights.
- Supplier and Customer Contracts: Review and agreements to understand the business’s ongoing obligations and relationships.
- Operational Factors:
- Employee Records: Review employment contracts, benefits, and severance policies to ensure compliance with Thai labor laws.
- Assets: Verify ownership and valuation of assets, including real estate, machinery, intellectual property, and inventory.
- Legal and Regulatory Compliance:
- Identify any ongoing or past legal disputes, unpaid taxes, or compliance issues with permits and licenses.
- Confirm that the company holds all necessary approvals to operate in its industry.
2. Drafting and Negotiating the Purchase Agreement
Drafting a proper purchase agreement is required to protect your interests and ensure a smooth transaction. Depending on the acquisition structure, you’ll need either a Share Purchase Agreement (SPA) or an Asset Purchase Agreement (APA). A properly drafted purchase agreement reduces the risk of disputes and provides a clear framework for the transaction, protecting both parties’ interests
Key Components of the Agreement
- Description of the Transaction: Clearly define whether the sale includes the company’s shares, assets, or both. Specify any exclusions.
- Financial Terms:
- Purchase price and payment schedule.
- Earnout provisions or performance-based payments, if applicable.
- Representations and Warranties: Assurances from the seller about the business’s condition, compliance, and not having any hidden liabilities.
- Indemnity Provisions: Protect the buyer against claims or liabilities arising from pre-sale activities.
- Closing Conditions: Outline requirements to finalize the transaction, such as regulatory approvals, tax clearance, or debt settlements.
- Post-Sale Obligations: Include non-compete clauses, transitional support from the seller, or employee retention agreements.
Protections for the Buyer in a Share Purchase Agreement
To protect yourself as the buyer, it is recommended to include seller guarantees in the agreement. These guarantees will protect the buyer from any hidden liabilities or undisclosed issues arise within a certain period after the sale, the seller remains liable for them.
In some cases, the buyers of the company may require the previous owner’s involvement for a transitional period. This can help ensure a smooth transfer of knowledge and operational continuity. The former owner may stay on as a consultant or manager for a set period, allowing you to learn the key requirements for the business before fully taking over.
What is an In-Out Clause in Thailand?
Another effective form of buyer protection is to include an in-out clause into the purchase agreement. An In-out clause links part of the purchase price to the company’s actual performance over a defined period after the sale. Instead of paying the full price upfront, an agreed amount is withheld and only paid if the business meets the agreed revenue and income targets.
This clause offers strong protection against sellers fraudulently inflating the company’s financials or misleading buyers about the company’s performance. If the revenue does not meet the buyer’s expectations, the withheld amount can be adjusted or forfeited, reducing the buyer’s risk.
3. Completing the Transfer of Ownership
Once the purchase agreement is finalized, the legal transfer of ownership must be completed. This process includes:
Share Transfer
- Execute a share transfer instrument with signatures from the transferor and transferee, witnessed by at least one witness, as required under Section 1129 of the Civil and Commercial Code (failing which the transfer is void).
- Record the transfer in the company’s register of shareholders and issue an updated share certificate to the buyer, which serves as proof of ownership of the shares. Until the transfer is entered in the register of shareholders, it is not enforceable against the company or third parties. The filing of the updated List of Shareholders (Bor.Or.Jor. 5) with the Department of Business Development is declaratory only.
- Pay applicable stamp duty based on the share transfer value.
Director Changes
- Call a board meeting to appoint new directors and define their authority.
- Update the company affidavit with the Department of Business Development (DBD) to show the new management structure.
Asset Transfers
- If purchasing assets, register the transfer of ownership for items such as real estate, vehicles, and intellectual property, with the relevant authorities.
- Ensure all asset-related taxes and fees are paid during the transfer process.
4. Post-Acquisition Restructuring
After acquiring the business, restructuring may be necessary to make sure the company meets your needs.
Key Areas for Restructuring include:
Corporate Governance
When acquiring a business, updating corporate governance documents is essential to reflect the new ownership structure and ensure compliance with Thai company laws. This includes reviewing and amending key legal documents such as the Articles of Association and shareholder agreements to match your business goals and protect stakeholder interests.
Rebranding
When acquiring a business, rebranding or repositioning can be an option used to bring the company in line with your long-term vision, especially if you plan to target a new market segment.
Potential options include refreshing the brand identity, adapting the business model, or adjusting the company’s messaging.
If rebranding is required, it should be approached carefully and not have a negative effect on existing customers.
Employee Retention and Recruitment
When acquiring a business, maintaining a strong workforce can help achieve a smooth transition. Keeping key employees allows for continuity in operations, retains key company knowledge, and helps maintain relationships with customers and suppliers.
While retaining key staff is important, recruitment allows you to expand your team, bring in fresh expertise, and align the team with your long-term business goals.
Accounting
When acquiring a business in Thailand, it is recommended to change the company’s accountant. While it may seem convenient to keep the existing accountant, choosing your own allows you to gain clear and unbiased insight into the company’s finances and ensure that bookkeeping and tax compliance are handled correctly.
This is increasingly more important due to Thailand’s digitalization of its tax system, businesses that previously operated with poor accounting practices may struggle to continue doing so. Having a new accountant from the start helps you avoid unexpected tax issues and ensures your business operates legally and efficiently.
Six Costly Mistakes Foreign Buyers Make in Thailand
Many foreign investors assume that buying a business in Thailand follows the same process as acquisitions in their home country. In practice, Thailand business acquisition transactions involve legal, tax, accounting, employment, immigration, and regulatory risks that are commonly underestimated during negotiations.
Below are six of the most common and costly mistakes foreign buyers make when acquiring a business in Thailand.
Mistake 1: Inheriting Hidden Liabilities in a Share Purchase
One of the most significant risks when purchasing a business outright is inheriting the company’s existing liabilities. In a share acquisition, the buyer acquires the legal entity itself, including many of its historical obligations, risks, and compliance exposure.
Common liabilities that may transfer to the buyer include:
Unpaid Taxes
Outstanding corporate income tax, VAT, withholding tax, or social security liabilities may remain attached to the company after completion. This can result in fines, penalties, surcharges, or Revenue Department investigations against the business under the new ownership.
Undisclosed Lawsuits
The target company may already be involved in ongoing or potential legal disputes that were not disclosed during negotiations. These may include commercial disputes, employment claims, or regulatory investigations that could result in financial losses or reputational damage.
Contractual Obligations
Existing supplier agreements, customer contracts, financing arrangements, leases, or distribution agreements may continue after the acquisition closes. Some of these agreements may contain unfavourable pricing terms, exclusivity obligations, penalties, or financial commitments that the buyer cannot easily renegotiate or terminate.
Liability for Past Misconduct
Even where the buyer had no involvement in the company’s previous operations, they may still inherit exposure arising from the seller’s prior conduct. This may include breaches of contract, regulatory non-compliance, fraudulent activity, misrepresentation, labour law violations, or accounting irregularities committed before the transaction took place.
For this reason, conducting proper legal, financial, tax, and operational due diligence is one of the most important parts of buying a business in Thailand. Where a target is financially distressed, see our guide on business rehabilitation in Thailand.
Mistake 2: Failing to Properly Review Lease Rights and Property Arrangements
Many foreign buyers focus heavily on the company itself without considering the importance of the target business’s lease arrangements. In Thailand, lease structures can create major operational risks if they are not carefully reviewed during due diligence.
It is common for commercial leases to be structured as three-year agreements to avoid Land Department registration requirements. However, unregistered leases exceeding three years are generally not enforceable beyond the initial three-year period. If the business depends heavily on its premises, such as restaurants, hotels, factories, retail stores, or hospitality operations, weak lease protection can create serious long-term problems after completion.
Buyers should also carefully review whether the lease is transferable, whether landlord consent is required for a change of ownership, and whether the landlord may renegotiate rent or renewal terms after the acquisition closes. Wherever possible, investors should negotiate stronger lease protections directly with the property owner during the transaction process, including longer registered lease terms where appropriate.
Another area often overlooked is “key money,” which is commonly used in Thailand for commercial property transactions. Key money may take the form of an upfront payment to a landlord or existing tenant in exchange for lease rights, reduced rent, or access to a commercially valuable location. However, these arrangements are not specifically regulated under Thai law and may not always provide the protections foreign buyers expect.
Without proper lease protection in place, the business may face relocation risks, unexpected rental increases, operational disruption, or significant additional costs shortly after the acquisition is completed. For more on structuring premises, see our guide on commercial lease agreements in Thailand.
Mistake 3: Ignoring Employment Liabilities
Employment liabilities can become one of the largest hidden costs in a share acquisition. Under Thai labour law, employee rights and severance obligations remain with the company after the acquisition closes. A business with long-serving employees may carry significant severance liabilities that are not always immediately visible during the early stages of negotiations.
Proper due diligence should include reviewing employment agreements, salary structures, social security compliance, historical disputes, and accrued severance obligations before finalising the purchase price.
Mistake 4: Using Nominee Structures to Circumvent the Foreign Business Act
Some foreign investors are incorrectly advised to use Thai nominee shareholders to bypass foreign ownership restrictions under the Foreign Business Act. This structure is illegal under Thai law and has become a major enforcement focus for Thai authorities. Violations may result in criminal penalties, fines, imprisonment, forced restructuring, or business closure.
Where foreign ownership restrictions apply, the appropriate approach is to use a lawful structure such as a Foreign Business Licence, BOI promotion, or, where applicable, the US-Thai Treaty of Amity.
Mistake 5: Overlooking Change-of-Control Clauses
Many buyers may fail to review whether key commercial contracts contain change-of-control restrictions. In practice, leases, distribution agreements, financing arrangements, supplier contracts, and franchise agreements may allow termination or immediate repayment if company ownership changes. These clauses can seriously affect the value and operational continuity of the business after closing. Proper legal due diligence should identify these risks early so that waivers, approvals, or revised commercial terms can be negotiated before completion.
Mistake 6: Treating Immigration and Work Permits as an Afterthought
Many foreign buyers focus entirely on the acquisition itself without planning how they will legally manage the business after completion. In reality, foreign directors and managers usually require a valid visa and work permit before they can actively operate the company in Thailand. Delays in immigration planning can create serious operational problems immediately after closing.
At Lex Nova Partners, immigration, corporate, tax, and employment planning are handled together as part of the acquisition process. This allows visa and work permit applications to begin during due diligence rather than after completion, helping foreign buyers transition into management of the business without unnecessary delays. For the available options, see our guides on Thai work permits and the LTR visa.
Why a Full-Service Firm Matters for Thai Acquisitions
A Thailand business acquisition is rarely just a simple share purchase agreement. In practice, acquisitions involve multiple legal and operational considerations that must be coordinated carefully from the beginning of the transaction.
The corporate side of the transaction covers proper structuring, due diligence, negotiations, and drafting the share purchase agreement. At the same time, tax considerations such as capital gains tax, VAT exposure, withholding tax, and stamp duty can significantly affect the overall transaction cost if not addressed early. Employment issues must also be reviewed carefully, particularly where severance liabilities, transfer of undertaking risks, or long-serving staff are involved. Immigration planning is equally important, as foreign buyers often require visas and work permits before they can legally manage the business after completion.
One of the most common problems during acquisitions is that different advisors are handling different parts of the transaction separately. A corporate lawyer may identify a risk that affects employment liabilities, while the tax implications may only become visible later in the process. When separate firms handle different parts of the transaction, important issues can easily fall through the cracks.
At Lex Nova Partners, corporate, tax, employment, immigration, and regulatory matters are handled together under one coordinated team. This allows issues identified during due diligence to be reflected immediately across the transaction structure and legal documentation.
Our team regularly supports SME with acquisitions in Thailand, particularly for foreign investors and French-speaking clients entering the Thai market. For buyers considering an acquisition, obtaining legal and tax advice before signing the LOI can often prevent costly restructuring issues later in the transaction.
Frequently Asked Questions
Can a Foreigner Buy a Business in Thailand?
Yes. Foreigners can legally buy a business in Thailand, but foreign ownership restrictions under the Foreign Business Act may apply depending on the business activity involved. In many cases, foreigners can still own more than 49 percent, and frequently up to 100 percent, of the business by using one of the routes below. The four main routes for foreign ownership are obtaining a Foreign Business Licence (FBL), securing BOI promotion, or if the business or investor is American, the US-Thai Treaty of Amity, or operating within sectors that are already exempt from FBA restrictions, such as certain export or manufacturing activities.
How Much Does It Cost to Buy a Business in Thailand?
In addition to the purchase price itself, transaction costs for SME acquisitions in Thailand typically range between 4% and 8% of the deal value. These costs usually include legal fees, financial and tax due diligence, government filing fees, translations, and transaction structuring advice. More complex acquisitions involving BOI structures, cross-border elements, or licensing issues may increase overall costs. At Lex Nova Partners, we can provide fixed-fee scopes for many SME acquisition transactions. See also our overview of Thailand’s SME policy updates.
How Long Does It Take to Buy a Business in Thailand?
A standard SME acquisition in Thailand typically takes between 3 and 6 months from signing the LOI to completion. Transactions involving BOI promotion, Foreign Business Licences, or complex restructuring may take between 6 and 12 months. The process usually includes initial negotiations, due diligence, transaction structuring, drafting the share purchase agreement, regulatory approvals where required, and completion filings with the Department of Business Development.
Is Buying a Business in Thailand a Good Investment?
Buying a business in Thailand can be a strong investment opportunity when the transaction is properly structured and fully reviewed during due diligence. Investors benefit from acquiring an operating business with existing staff, licences, supplier relationships, and customers already in place. However, acquisitions also involve risks, including hidden liabilities, employment exposure, Foreign Business Act restrictions, tax issues, and post-acquisition integration challenges. Careful legal, financial, and operational due diligence is essential before proceeding.
What Is the Difference Between a Share Purchase and Asset Purchase in Thailand?
In a share purchase, the buyer acquires the company itself, including its assets, liabilities, contracts, employees, and historical obligations. In an asset purchase, the buyer acquires only selected business assets while leaving the legal entity and many liabilities with the seller. The most appropriate structure depends on factors such as licensing requirements, employment considerations, tax exposure, operational continuity, and the buyer’s overall risk profile.
Do I Need BOI Approval to Buy a Thai Company?
Not always. BOI approval is generally only required if the target company already holds BOI promotion and the acquisition involves a change of control requiring BOI consent. In other cases, investors may choose to apply for BOI promotion after the acquisition if they need foreign ownership exemptions, tax incentives, or work permit support for foreign staff under Thailand’s investment promotion framework.
Can I Get a Work Permit After Buying a Business in Thailand?
Yes, provided the company satisfies the standard requirements for sponsoring foreign employees. In most cases, this includes at least THB 2 million in registered capital per foreign employee and a ratio of four Thai employees per foreign work permit. BOI-promoted companies may qualify for exemptions from these requirements. Depending on the structure involved, the visa and work permit process usually takes approximately 4 to 8 weeks.
What Taxes Apply When Buying a Business in Thailand?
Several taxes may apply depending on how the acquisition is structured. Share transfers generally attract stamp duty at 0.1% of the transfer value. Thailand does not levy a separate capital gains tax; gains on the sale of shares are taxed as ordinary assessable income. A non-resident individual seller is generally subject to 15 percent withholding tax, subject to relief under any applicable double tax treaty, while a corporate seller is taxed at the standard corporate income tax rate. Asset purchases may also trigger 7% VAT unless the transaction qualifies for a transfer-of-going-concern exemption under Thai tax rules.
Getting Started
Buying a business in Thailand can provide a faster and more practical route into the Thai market than building a company from scratch. However, a successful acquisition requires more than simply negotiating a purchase price. Corporate structuring, tax planning, employment liabilities, regulatory compliance, and immigration planning all need to be managed together from the beginning of the transaction in order to reduce risk and avoid costly issues after completion.
At Lex Nova Partners, our Bangkok-based team handles corporate, tax, employment, immigration, and regulatory matters together under one coordinated workflow. We regularly support SME and foreign investors in Thailand, with bilingual English and French support available throughout the transaction process.
Before signing anything or paying a deposit, it is often advisable to obtain legal and tax structuring advice first. To discuss a proposed acquisition in Thailand, contact our team at +66 (0)6 5527 6323 or [email protected], or visit our office at Ocean Tower 2, 14th Floor, Sukhumvit 19, Bangkok. You can also schedule a 30-minute structuring call through the Lex Nova Partners contact page.
Please note that this article is for information purposes only and does not constitute legal advice
