Is it Possible for Foreigners to Register a Partnership in Thailand?
While incorporating a partnership for Thai nationals is considered very simple with less restriction, partnership for Foreigners are restricted by, again, Foreign Business Act. There are two types of Partnership in Thailand, ordinary partnership and limited partnership. In general, according to Thailand Civil and Commercial Code, a partnership is “A contract whereby two or more persons agree to unite for a common undertaking, with a view of sharing the profits which may be derived there from.”
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An ordinary Partnership is considered to be a kind of a contract. Therefore, it is not required by law to register the Ordinary Partnership. It could be incorporated by merely making an agreement between partners without any formal registration. Nonetheless, the ordinary partnership is able to registered, once the ordinary partnership is registered, it is considered as a juristic person.
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A limited partnership is a kind of partnership in which there are:
(1) One or more partners whose liability is limited to such amount as they may respectively undertake to contribute to the partnership.
(2) One or more partners who are jointly and unlimitedly liable for all the obligations of the partnership.
The limited partnership is required to register and is considered as a legal entity. Only the second type, unlimited partner, is able to act as a managing partner. Therefore, if partner whose liability is limited interferes with the business, they will become an unlimited partner where their liability is unlimited.
Under Foreign Business Act, foreigner who wishes to operate a partnership is restricted. If they invest more than half of overall investment or being a managing partner, the Foreign Business License shall be applied. Therefore, to avoid the Foreign Business License, foreigners should not invest more than half and should not act as a managing partner. Nonetheless, if they are not acting as a managing partner, it is less likely that they can protect their interest.
Category: Business in Thailand, Company Law, Company Registration
About the Author (Author Profile)
Sirinee Kamphaengkaew is an Attorney at Law for Siam Legal specializing in corporate law. She was educated at American University's College of Law in Washington, D.C., and at Chulalongkorn University in Bangkok. She earned a Bachelor of Law with Honors, and two Masters of Law, focusing on Business Law and Intellectual Property Law. She has been a member of the Law Society of Thailand since 2005, and is fluent in both Thai and English.
