Buying a Company in Thailand 2026: Share Deal vs Asset Deal, the 49% Rule, Licence Succession, Merger Control and a 12-Point Due Diligence Checklist for Foreign Buyers

Key takeaways

• Three structures: share deal, asset deal, merger. Foreign buyers usually prefer a share deal because licences, contracts and employees stay with the company, but the buyer also inherits every historical liability.
• The Foreign Business Act's 49% line is the first gate. If foreign shareholding reaches 50% after the purchase, the company becomes a "foreigner": restricted businesses need a Foreign Business Licence (FBL), BOI promotion or a treaty right first, and land the company holds must be sold within a fixed period (Land Code sections 94 and 97). US buyers can rely on the Treaty of Amity for most sectors; other nationalities cannot.
• Licence succession: in a share deal the FBL, BOI certificate and factory licence stay in the company's name, but a change of shareholding under BOI or an FBL needs prior approval or notification. In an asset deal most licences cannot be transferred and must be applied for again.
• The 2023 amendment to the Civil and Commercial Code added the absorption merger (one company survives) alongside the consolidation merger; both pass all rights and obligations to the surviving company.
• Merger control: a merger creating a dominant position needs prior approval; a transaction where either party or the merged business has turnover of THB 1 billion or more must be notified within 7 days after closing. A consultation on lowering those thresholds closed on 21 October 2026 and no final rule had been issued at the time of writing.
• Tax: stamp duty of 0.1% on a share transfer and 15% withholding by the buyer on a non-resident seller's gain; an asset deal attracts 7% VAT, the land transfer fee and specific business tax, unless the transaction qualifies as an entire business transfer.
• Since 2026 the DBD checks nominee shareholders in stages: Thai shareholders must show bank statements for the source of their funds and directors sign an investment statement. If the target's shareholding history includes nominees, the buyer's directors share the criminal exposure after completion.
• Twelve due diligence items, three of which foreign buyers most often miss: nominee history, unfunded severance liability, and the type of land title (anything other than a Chanote cannot be fully transferred).

When a foreign company buys an existing Thai business it is usually buying time: a factory already licensed, a distributor with customers, a company that already holds the FBL or BOI certificate that would otherwise take months to obtain. The price of that time is the target's history, and in Thailand the history includes things an outsider cannot see from the share register: who really paid for the Thai shareholders' shares, whether the BOI was told about the last change of ownership, and whether the land is held on a title that can be transferred at all.

This guide walks through the choice of structure, the Foreign Business Act gate, licence succession, merger control, tax, the 12 due diligence items, the deal documents and closing steps, and the home-country points a foreign buyer should check in parallel. It applies Thai law as in force in October 2026.

1. Three structures: decide what you are buying

1.1 Why foreign buyers prefer the share deal

Because in Thailand licences belong to the company. A company that holds an FBL, BOI promotion, a factory licence, import-export registration and FDA product approvals brings all of them with its shares. Buying the assets means applying from scratch: an FBL takes about 3 to 6 months in practice, BOI promotion about 2 to 4 months (followed by an application for the foreign business certificate, FBC), a factory licence 1 to 3 months, and none is guaranteed.

Those Thai FDA approvals are worth checking one by one before closing: each is held by a specific importer with an inspected warehouse, and a product approval in a distributor's name does not move with the target. What the approvals are and who may hold them is in Thai FDA Approval 2026: How a US or Foreign Brand Gets Food, Dietary Supplements, Cosmetics and Medical Devices Registered in Thailand, Timelines, Penalties and Document Legalisation .

1.2 When an asset deal is the better choice

• The target has a history you cannot verify: nominee shareholders at some point, two sets of books, a past Revenue Department audit.
• You only want specific assets: a plot of land, a production line, a brand.

Where the asset is a brand, check that the Thai trademark registration stands in the seller's own name and not a distributor's, and have the assignment recorded with the Department of Intellectual Property. How Thai trademark registration works is in Trademark Registration in Thailand 2026 for US and Foreign Brands: Fast Track 4 Month Plus+, Madrid vs Direct Filing, and the First-to-File Rule .

What a foreign buyer can actually hold when the asset is land, and why an industrial lease can run 50 years rather than 30, is in Factory Land in Thailand for Foreign Manufacturers 2026: Why You Are Not Limited to a 30-Year Lease, the 50-Year Industrial Lease, BOI and IEAT Ownership and the Registration Trap .

• The target has major pending litigation or a brewing labour dispute.
• The seller will not give full representations and warranties.

1.3 The 2023 absorption merger

The Civil and Commercial Code Amendment Act (No. 23), in force since 7 February 2023, added the absorption merger (one company survives, the other is extinguished) to the existing consolidation merger (both extinguished, a new company formed). The procedure: each company passes a special resolution (at least three-quarters of the votes of shareholders present), publishes notice and writes to creditors within 14 days under amended section 1240, creditors have 60 days to object, and once there is no objection or the debt is paid or secured the merger is registered with the DBD within 14 days. The surviving company succeeds to all rights and obligations of the extinguished one. For intra-group consolidation this removes the need to form a new company and re-apply for every licence.

2. The first gate: the Foreign Business Act's 49% line

2.1 When does the company "become a foreigner"?

Under section 4 of the Foreign Business Act B.E. 2542 (1999), a Thai company in which foreigners (including foreign companies) hold 50% or more of the shares is itself a "foreigner". So:

• A foreign buyer who acquires 49% or less leaves the target a Thai company, free to carry on any business.
• A foreign buyer who acquires 50% or more turns the target into a foreigner. Before it carries on any business in List 1 (prohibited), List 2 (Cabinet approval) or List 3 (FBL required) of the Act, it needs an FBL, BOI or IEAT promotion, or a treaty right. Check before the deal whether the target's business is one a foreigner may carry on at all.

The classic trap: buying 49% and "finding a Thai friend to hold the other 51%". That is the nominee arrangement prohibited by section 36. Since 2026 the DBD has tightened its checks in stages: from 1 January (Order No. 2/2568) Thai shareholders must file bank statements showing the source of their funds and the authorised director signs a statement that all shareholders genuinely paid; from 1 April (Order No. 1/2569) certain changes required personal attendance and a foreigner newly registered as signatory had to file an investment confirmation; and from 1 August Order No. 2/2569 consolidated and replaced the two earlier orders and is the current rule. A nominee structure can be stopped at the closing registration itself, and the buyer's directors share the criminal liability under sections 36 and 41 (up to three years' imprisonment and a fine of THB 100,000 to 1,000,000). The director's personal exposure is set out in our guide to director liability in Thailand for foreign directors .

2.2 Three lawful routes to a majority

For an American buyer the Treaty of Amity usually solves the ownership question for a service or trading target, but it does not give BOI's tax incentives or work-permit relief, and it does not apply to land. The routes are compared in our guide to setting up a company in Thailand for foreign investors , and the BOI, IEAT and FBL conditions and timelines are in the complete guide to establishing a business in Thailand .

2.3 Land: a majority-foreign company must sell

Under section 97 of the Land Code, a company in which foreigners hold more than 49% is treated as a foreign juristic person and may not own land. Under section 94, a company that already holds land when it becomes foreign must dispose of it within a period set by the Director-General of the Department of Lands (not less than 180 days and not more than one year); otherwise the Director-General sells it.

The practical solutions:

• Keep the foreign shareholding at 49% and take control through preference shares or weighted voting written into the articles, provided the structure is not a nominee arrangement. Where that line runs is the subject of our guide to joint ventures and shareholders' agreements in Thailand .
• Hold the land in a separate Thai-majority or BOI-promoted company and lease it to the target for 30 years; land in an industrial estate may be owned by a foreign company under the IEAT Act.
• A BOI-promoted company may own the land it needs for its operations under section 27 of the Investment Promotion Act, outside the Land Code's restriction, but must dispose of it within one year if the promotion ends.

3. Licence succession: "automatic" in a share deal, "start again" in an asset deal

The commonest mistake in a share deal is the BOI change of shareholding: the buyer acquires a BOI company, nobody applies to the BOI, and a year later the omission surfaces when the company applies to extend its tax holiday. The promotion is revoked and the exempted tax reclaimed. "BOI approval of the change of shareholders" must be a condition precedent in the share purchase agreement.

4. Merger control: notification thresholds

Under section 51 of the Trade Competition Act B.E. 2560 (2017) and the Trade Competition Commission's notifications:

Closing without prior approval is punishable by a fine of up to 0.5% of the transaction value; failing to notify after closing by a fine of up to THB 200,000 plus up to THB 10,000 per day. "Merger" here includes acquiring 25% or more of the voting rights of a listed company or 50% or more of an unlisted company, and acquiring 50% or more of another business's assets.

Reform under way: the Commission ran a public consultation from 22 September to 21 October 2026 on draft notifications that would lower the dominance test from a 50% to a 33% market share and the turnover threshold from THB 1 billion to THB 500 million, with THB 500 million also proposed for the post-closing notification. As at the end of October 2026 no final notification had been published. Confirm the thresholds in force before signing.

5. Tax: share deal versus asset deal

5.1 Share deal

A foreign buyer paying a non-resident seller must withhold 15% of the gain and file the return (PND.54) by the 7th of the following month. This is routinely overlooked and the buyer is assessed later. The withholding is on the gain, so the buyer needs the seller's acquisition cost before closing; build that into the documents.

5.2 Asset deal

5.3 The entire business transfer relief

Under the Revenue Code and the related royal decrees, where the seller transfers its entire business (assets, liabilities and employees) to the buyer, registers its dissolution and starts liquidation within the same accounting year, both parties are Thai companies with no tax arrears, and the transfer is reported to the Revenue Department within 30 days:

• The transfer is not treated as a sale and is exempt from VAT.
• Real property transferred is exempt from specific business tax and stamp duty; the land transfer fee can be reduced under the Ministry of Interior's announcement in force at the time.
• The seller's gain on the transfer is exempt from corporate income tax.

A Revenue Department ruling in February 2024 confirmed that a merger under the amended Civil and Commercial Code receives the same entire business transfer treatment. This is the most important tax tool in an asset deal, but the conditions are strict (the seller must liquidate; the transfer must be the whole business), so the structure has to be confirmed with tax advisers before signing. It cannot be applied retrospectively after closing. The wider tax picture is in our guide to corporate tax in Thailand .

6. Due diligence: the 12 items

Where the target owns Thai patents, petty patents or designs, add the chain of title to the list: an employee's invention belongs to the employer under Thai law, and a patent filed in a parent company's name without a written assignment from the Thai company can be attacked later. See Thailand Patent Guide 2026: Invention Patents, Petty Patents and Designs for US and Foreign Companies, PCT Entry, Fast-Track Options and the Draft Patent Act .

The severance, work rules and social security points are explained in our guide to Thai labour law for foreign employers , and the six areas a lender, underwriter or buyer will examine in a Thai subsidiary are in legal due diligence on a Thai subsidiary .

What the PDPA item in that table actually tests, from the 72-hour breach rule to the lawful basis for every transfer to head office, is in Thailand PDPA Compliance 2026: What the First THB 21.5 Million in Fines Means for Foreign Companies, Cross-Border Transfers to Head Office, SCC and the New BCR Rules .

6.1 Timing and method

• For a mid-sized target (turnover THB 100 million to 1 billion) legal due diligence takes about 3 to 5 weeks, with financial and tax due diligence in parallel.
• Thai corporate records are in Thai. Use Thai-English bilingual lawyers; the seller's English summaries are not a substitute.
• Public records at the DBD, the Land Office and the courts can be pulled by your lawyers without the seller's cooperation. Documents the seller will not provide, such as Revenue Department correspondence, environmental inspection files or Labour Office complaints, are a warning sign in themselves.

7. Deal documents and closing

7.1 Thai-specific points in the share purchase agreement

• Governing law and disputes: where Thai shares and land are involved, Thai governing law is advisable; arbitration at the Thai Arbitration Institute (TAI) or THAC can be conducted in English. Litigation in the Thai courts is slow; our guide to debt recovery in Thailand shows what the court route actually involves.

What filing at TAI involves in practice, including why the clause should name the institution, the number of arbitrators and the language, is in Arbitration at the Thai Arbitration Institute (TAI) 2026: Statement of Claim Requirements, Documents, Fees and Timeline for Foreign Parties .

• Conditions precedent: BOI approval of the change of shareholders, FBL notification, Trade Competition Commission approval where applicable, lender consent under change-of-control clauses, retention of key employees.
• Representations and warranties: nominee shareholders, tax, labour and land title are the four core areas; warranty and indemnity insurance is available in the Thai market.
• Retention and escrow: Thailand has the Escrow Act B.E. 2551 (2008); a bank can act as escrow agent, and a retention of 10% to 20% of the price for 12 to 24 months is common.

7.2 Closing steps in a share deal

1. Sign the share transfer instrument (section 1129 of the Civil and Commercial Code: in writing, signed by transferor and transferee, at least one witness).

2. Pay stamp duty of 0.1%.

3. Board resolution of the target acknowledging the transfer and entry in the share register; until registered, the transfer cannot be asserted against the company or third parties.

4. File the new shareholder list (Bor Or Jor 5) with the DBD within 14 days; if directors, signing authority or the articles change at the same time, file them together, with the Thai shareholders' source-of-funds evidence and the director's statement required under the 2026 orders.

5. Notify the BOI that the change of shareholding is complete, update bank signatories, notify major counterparties.

6. If the seller is a non-resident, file the withholding return (PND.54) by the 7th of the following month.

8. Home-country points to check in parallel

Thai law is only half of the picture. Before funds are remitted, a foreign buyer should check three things at home:

• Outbound investment reporting: many jurisdictions require approval or post-completion notification of an overseas acquisition above a threshold. Confirm whether yours does before the price is paid.
• Controlled foreign company rules: Thailand's 20% corporate rate keeps a Thai subsidiary outside most CFC regimes, but an intermediate holding company in a low-tax jurisdiction may not be.
• Dividend withholding: Thailand withholds 10% on dividends paid abroad; the treaty between Thailand and the buyer's country may reduce it, and the application has to be made to the Thai Revenue Department in advance. For a US buyer, the FCPA applies to the target's conduct from closing, which is why item 12 above matters before closing.

Conclusion

The decisive question in a Thai acquisition is not the price but the structure. A share deal saves time but takes on the whole history; an asset deal is clean but the licences start again; the Foreign Business Act's 49% line and the Land Code decide whether the buyer can hold control at all. Most failed foreign acquisitions in Thailand went wrong before signing: no due diligence on the Thai-language records, no BOI approval as a closing condition, or a nominee structure used to get past 49%.

Frequently asked questions (FAQ)

What is the difference between buying 49% and buying 51% of a Thai company?

At 49% or below the company remains a Thai company, free to carry on any business and to own land. At 50% or above it becomes a "foreigner" under the Foreign Business Act: for a business on the restricted Lists it needs an FBL, BOI promotion or a treaty right first, and any land it holds must be sold within a period of 180 days to one year set by the Department of Lands. A US buyer can use the Treaty of Amity for most sectors other than land.

The target has BOI promotion. Does it continue automatically after I buy the shares?

The certificate stays with the company, but a change in the shareholding ratio needs prior approval from the BOI. If the change is made without approval, the BOI can revoke the promotion and reclaim the tax exempted. Make BOI approval a condition precedent in the share purchase agreement.

Can I take the factory licence with me in an asset deal?

The factory licence transfers with the factory under the Factory Act, and the transferee notifies the Department of Industrial Works within the time limit. The FBL, the BOI certificate and FDA approvals, by contrast, are in principle not transferable and must be applied for again or re-registered to the new holder.

Do I have to notify the Trade Competition Commission?

A merger creating a dominant position needs prior approval; a transaction where either party or the merged business has turnover of THB 1 billion or more must be notified within 7 days after closing; below those thresholds there is no filing. Proposals to lower the thresholds were out for consultation until 21 October 2026 and had not been finalised at the time of writing, so confirm the current figures before signing.

The seller is not a Thai resident. Does Thailand tax the seller's gain?

Yes. Under section 70 of the Revenue Code the buyer must withhold 15% of a non-resident seller's gain on the transfer of Thai shares and file the return by the 7th of the following month. Whether the capital gains article of the treaty between Thailand and the seller's country reduces or removes that tax has to be checked for the specific treaty and the specific facts.

What are the three things I must check before I buy?

Whether the target ever had nominee shareholders (the DBD's 2026 source-of-funds checks are strict, and the buyer's directors share the criminal exposure after completion), whether severance liability has been provided for (up to 400 days' wages in Thailand), and whether the land is held on a Chanote title.

What should a US buyer check that other buyers do not?

Two things. First, the Treaty of Amity: a US-majority-owned buyer can usually hold a majority of a Thai service or trading company without an FBL, which changes the structuring options in section 2. Second, the FCPA: from closing the target's dealings with Thai officials are the buyer's problem, so the anti-corruption item in due diligence, agent commissions and government-facing contracts, should be done before signing, not after.

How Louis Group can help

Louis Group has offices in Taipei, Hsinchu and Bangkok, with Thai-qualified lawyers working alongside Taiwanese colleagues in English. We advise foreign buyers through the whole of a Thai acquisition: structure selection, legal and tax due diligence, the share purchase agreement and shareholders' agreement, BOI, FBL and Trade Competition Commission filings, and closing registration. If you are evaluating a Thai target, contact us before the letter of intent is signed; the structure is easier to fix at that stage than at closing.

Author: Ming-Feng Ho , Director of Louis & Charles Hsinchu, practising in mergers and acquisitions, corporate governance and outbound investment structures. Thai law input: Louis & Partners Thailand.

*This article is written on the basis of Thai law in force in October 2026 and is general legal information, not advice on a specific case. Thresholds, rates and the practice of the authorities change; the merger-control thresholds in particular are under review. Take advice from a Thai-qualified lawyer on your transaction.*

Related reading

• Setting Up a Company in Thailand 2026 for Foreign Investors: The 49% Rule, Nominee Shareholder Risk, Capital and Work Permit Ratios, BOI and the New DBD Checks
• Joint Ventures and Shareholders' Agreements in Thailand 2026: Where Lawful Protection Ends and a Nominee Structure Begins under the New DBD Checks
• Legal Due Diligence on a Thai Subsidiary 2026: What Buyers, Lenders and IPO Underwriters Check, the Nominee and BOI Deal-Breakers, and the 6-to-9-Month Timeline