Mergers and acquisitions in Thailand
Buying or selling a Thai company involves DBD filings, tax clearance, Foreign Business Act transfer, due diligence, and immigration updates for retained foreign staff. At Thai Visa Centre in Bangkok, we help buyers and sellers plan visa and work-permit transitions during M&A transactions.
Share purchase agreements should address work permits, visas, and BOI licence transfer before closing, not after. Engage a corporate lawyer and accountant early.
Most foreign buyers acquire shares in an existing Thai limited company.
Regulatory approvals including FBA and BOI can take two to six months.
Share transfer DBD filing often takes one to two weeks after complete documents.
Address work permits and visas in the SPA before closing, not after.
M&A structures in Thailand
| Method | What changes | Common use |
|---|---|---|
| Share acquisition | Ownership of existing Thai company | Buy 100% or controlling stake |
| Asset acquisition | Specific assets or contracts transfer | Cherry-pick without full liabilities |
| Merger | Two companies combine per Civil and Commercial Code | Group reorganisation |
| Amalgamation | Statutory merger procedure | Rare and complex |
Due diligence checklist
| Area | Review points |
|---|---|
| Corporate | DBD registration, MOA objectives, shareholder register, board resolutions, director authority |
| Regulatory | FBA licence validity, BOI change-of-control notification, Treaty of Amity certificate if US structure |
| Tax and employment | Revenue Department filings, social security, work permit compliance, pending audits |
| Commercial | Material contracts with change-of-control clauses, lease assignability, IP ownership |
Transaction steps for share deals
Term sheet and exclusivity
Agree headline terms and exclusivity period before full due diligence.
Due diligence
Corporate, regulatory, tax, employment, and commercial review by lawyer and accountant.
Share Purchase Agreement
Price, warranties, and conditions precedent including regulatory approvals.
Regulatory approvals
FBA, BOI, and competition law notifications as applicable.
Closing
Share transfer, director changes, and DBD filing.
Post-closing
Tax notification, bank signatory update, and work permit amendments.
Immigration during M&A
| Scenario | Action |
|---|---|
| Foreign employees stay | Work permits may continue. Verify employer details unchanged or amend promptly. |
| New foreign buyer executives | New non-immigrant B visa and work permit required. |
| Redundancies | Cancel work permits. Visa status must be resolved before departure deadline. |
| BOI ratio | Retain minimum Thai staff for foreign work permits under BOI conditions. |
TVC coordinates permit transfers and new applications during transition.
Tax considerations: Share sale may trigger corporate income tax on seller gain plus stamp duty. Asset deals involve VAT, withholding tax, and corporate income tax on asset gains. Uncleared tax blocks clean title.
Common M&A mistakes
- Discovering FBA licence does not cover actual operations post-deal.
- BOI benefits lost on share transfer without prior BOI consent.
- Work permits lapse during employer name change at DBD.
- Hidden labour disputes or unpaid social security contributions.
- Offshore buyer with no Thai substance blocked from licence transfer.
Frequently asked questions
General answers for foreign buyers and sellers in Thai M&A transactions. Confirm specific requirements with DBD, BOI, and your legal advisors.
Q:Can foreigners buy 100% of a Thai company?
A:Only if the Foreign Business Act, BOI, or Treaty of Amity permits the activity. Same rules apply as greenfield investment.
Q:How long does share transfer DBD filing take?
A:Often one to two weeks after complete documents. Regulatory approvals take longer and should be planned before signing a binding SPA.
Q:Do employees automatically transfer?
A:Thai labour law treats sale as succession. Employment terms continue but work permits need administrative update with the new employer details.
Q:Should buyer use new company instead of acquisition?
A:Clean asset deal vs buying liabilities. Due diligence drives the choice between acquisition and greenfield setup.
Q:What regulatory approvals may be required?
A:Foreign Business Act licence transfer, BOI approval for share transfer, competition law merger notification, and sector-specific approvals for regulated industries.
Q:What tax issues arise in share deals?
A:Seller may owe corporate income tax on gain plus stamp duty on shares. Uncleared tax blocks clean title during due diligence.
Q:When should immigration be planned?
A:Before closing. Share purchase agreements should address work permits, visas, and BOI licence transfer conditions precedent.
Q:Who handles due diligence?
A:Engage a corporate lawyer and accountant early. TVC coordinates permit transfers and new visa applications during transition.