Definition. A share transfer is the sale of existing shares in a Thai limited company from one shareholder to another. The company itself does not change, so its licences, contracts and land stay where they are. What changes is who owns it, and Thai law attaches consequences to that change.
Related reading: registered capital increase in Thailand and registered capital reduction in Thailand, both governed by sections 1220 to 1228 of the Civil and Commercial Code.
How is a share transfer in Thailand made valid?
Section 1129 of the Civil and Commercial Code sets three conditions for a share transfer in Thailand. The instrument must be in writing. Both the transferor and the transferee must sign it. At least one witness must certify their signatures. An instrument that misses any of these is void, not merely voidable, and it must also state the numbers of the shares it transfers.
Even so, validity between the parties is only the first step. The same section provides that the transfer cannot be set up against the company or third persons until the company enters the transfer, with the transferee’s name and address, in its register of shareholders. Until then, the buyer owns the shares as against the seller, but not as against anyone else.
Furthermore, section 1141 presumes the register to be correct evidence of the matters it records. For that reason, the register entry is the buyer’s real proof of title. A signed instrument sitting in a data room does not protect the buyer if the register still shows the seller.
Restrictions in the articles of association
Shares pass without the company’s consent unless the company’s regulations provide otherwise. The articles may therefore add a consent requirement or a right of first refusal. A transfer made in breach of those restrictions invites a dispute over whether the company must register it. Consequently, the buyer’s counsel should read the articles before drafting the purchase agreement, not after.
Unpaid shares and the closed register
Two further rules also affect timing. Under section 1130, the company may decline to register a transfer of shares on which a call is due. Section 1131 also allows the company to close the transfer book during the fourteen days before the ordinary general meeting. In addition, section 1133 keeps a transferor liable for the unpaid amount on partly paid shares. That liability is limited, and no action against the transferor may be brought later than two years after the register records the transfer.
| Provision | Rule | What the buyer should do |
|---|---|---|
| Section 1129 | Written instrument, signed by both parties, one witness; effective against the company only once registered | Make the register entry a completion deliverable |
| Section 1130 | Company may refuse to register shares on which a call is due | Confirm the paid-up status of each share |
| Section 1131 | Transfer book may close for fourteen days before the ordinary meeting | Check the meeting calendar before fixing completion |
| Section 1133 | Transferor of partly paid shares stays liable, within limits, for two years | Price the unpaid amount into the deal |
| Section 1141 | Register presumed correct evidence | Obtain a certified copy of the updated register |
When does a share transfer in Thailand make the company foreign?
A share transfer in Thailand makes the company foreign under the Foreign Business Act when foreigners come to hold at least one half of its capital shares. Section 4 sets that test. It also looks through chains: a Thai company half owned by a foreign-owned Thai company is itself foreign. The transfer does not require any filing to trigger this.
The consequence, however, depends on what the company does. If its business falls within the Lists annexed to the Act, a foreign company needs a Foreign Business Licence under section 17, a certificate under section 11 or 12, or a statutory exemption. Section 37 punishes a foreigner who operates a restricted business without one. The penalty is imprisonment of up to three years or a fine of THB 100,000 to THB 1,000,000, or both. The court may also order the business to stop or the shareholding to end. Our Foreign Business Licence practice handles the application where the target needs one.
Timing therefore matters. The licence, certificate or exemption must be in place when the transfer makes the company foreign. It cannot follow afterwards, because the business operates in breach from the moment of completion.
Nominee structures and section 36
Placing shares with Thai holders who do not invest their own money, so as to stay below the one-half line, is an offence. Section 36 applies it to the Thai nominee and to the foreigner who allows it. The penalty matches section 37, and the court may order the shareholding to end.
Moreover, the Department of Business Development has tightened its registration checks. Order of the Central Partnership and Company Registrar No. 1/2569 governs amendment registrations that add foreign partners or foreign authorised directors. Order No. 2/2569, effective 1 August 2026, requires Thai shareholders in companies with foreign participation to evidence the source of their capital with bank statements. Where a transaction also needs an amendment registration, such as a new director under section 1157 of the Code, those requirements attach to that filing.
Share transfer in Thailand and company-owned land
The Land Code uses a different test from the Foreign Business Act. Under section 97, a limited company becomes subject to the land rights of a foreigner once foreigners hold more than forty-nine percent of its registered capital. It also does so once foreign shareholders make up more than half of the total number of shareholders.
Notably, that headcount limb has no equivalent in the Foreign Business Act. A company can therefore remain Thai for business licensing but become alien for land. Section 98 then extends the same status to companies held through such a company, so the test also reads through chains.
Section 100 deals with exactly the situation a share transfer creates. It covers a company that acquired land while outside section 97 and later falls within it. For that case, it applies section 95, which in turn applies the disposal procedure in section 94. Under section 94, the Director-General sets a period of not less than one hundred and eighty days and not more than one year to dispose of the land. If the owner misses it, the Director-General may dispose of the land himself.
Land that a promoted company holds under a permission granted by the Board of Investment rests on a different legal basis. A buyer of a promoted company should read the promotion certificate and the Board’s land permission together. Our note on BOI land ownership sets out the disposal rules that apply to that route.
Three thresholds for one share transfer in Thailand
Three statutes each ask whether a share transfer in Thailand has moved control to foreigners, and each answers with its own test. The Foreign Business Act measures capital at one half or more. By contrast, the Land Code measures capital above forty-nine percent or a foreign majority by headcount. Finally, the Trade Competition Act asks whether the buyer acquired voting control.
| Statute | Test | What it measures | Consequence if crossed |
|---|---|---|---|
| Foreign Business Act B.E. 2542, section 4 | At least one half of capital shares held by foreigners | Capital, through holding chains | Licence, certificate or exemption needed for listed businesses |
| Land Code, sections 97 and 98 | More than 49 percent of registered capital, or more than half of shareholders by number | Capital or headcount, through holding chains | Land held becomes subject to disposal under sections 100, 95 and 94 |
| Trade Competition Act B.E. 2560, section 51, with the Commission’s merger notification | More than 50 percent of voting rights in a non-listed company; more than 25 percent in a listed company | Voting rights | Post-merger notification or prior permission, depending on market effect |
Where the three tests diverge
Reading the three tests side by side exposes gaps that none of them states alone. A foreign stake of 49.5 percent keeps the company Thai under the Foreign Business Act. Yet the same stake makes it alien under the Land Code. Likewise, a company with a small foreign stake spread across several foreign individuals can fail the Land Code headcount test while passing every capital test. Where a shareholder exit ends in a winding-up instead of a sale, see our guide to liquidating a company in Thailand.
Conversely, voting and capital can diverge. The Commission’s test counts voting rights, while the Foreign Business Act counts capital. Section 1142 of the Code also protects whatever preferential rights preference shares carry. Where the articles attach different rights to different classes of shares, a buyer’s voting position and its capital position may therefore differ, and each statute must be tested on its own measure.
Does a share transfer in Thailand need merger clearance?
It may. Section 51 of the Trade Competition Act treats the acquisition of shares to control another business’s policy or management as a merger. A merger that may substantially reduce competition must be notified to the Commission within seven days from the date of merging. A merger that may cause a monopoly or a dominant position needs the Commission’s permission first.
The Commission’s notification sets the criteria. It treats an acquisition of more than 50 percent of the voting rights in a non-listed company as a merger. The Royal Gazette published it on 28 December 2018, and it took effect the next day. The notification also sets the sales threshold that triggers post-merger notification. Confirm the current criteria on the Commission’s guidelines page before closing, because the Commission may revise them.
The penalties are administrative. First, section 80 exposes a party that fails to notify under paragraph one to a fine of up to THB 200,000, plus up to THB 10,000 a day. Section 81, meanwhile, sets a fine of up to 0.5 percent of the transaction value where a party merges without the required permission.
What taxes apply to a share transfer in Thailand?
Two taxes can arise on a transfer. Stamp duty falls on the transfer instrument itself. Where the seller is a foreign company not carrying on business in Thailand, income tax on the gain may also be withheld at source under section 70 of the Revenue Code.
Stamp duty on the instrument
The Revenue Department’s stamp duty schedule charges THB 1 for every THB 1,000, or fraction of it, on a share transfer. The base is the paid-up value of the shares or the nominal value stated in the instrument, whichever is greater. Where the parties sign the instrument outside Thailand, the first holder in Thailand must stamp it within thirty days of receiving it. The Revenue Department’s stamp duty page sets out the schedule and the surcharges for late stamping.
Withholding on a foreign seller’s gain
Section 40(4)(g) of the Revenue Code classes a gain on the transfer of shares as assessable income. Under section 70, a foreign company not carrying on business in Thailand is taxed on such income when it is paid from or in Thailand. The payer must deduct the tax and file within seven days from the end of the month of payment. For this class of income, the withholding rate is 15 percent.
Two qualifications follow from the text. First, section 70 depends on the payment being made from or in Thailand. Second, a double taxation agreement between Thailand and the seller’s country may allocate the right to tax the gain differently. The buyer, as the potential payer, carries the withholding obligation. For that reason, the tax position belongs in the share purchase agreement, not in a post-completion discussion.
A closing sequence for a share transfer in Thailand
The order of steps in a share transfer in Thailand follows directly from the rules above. The foreign-ownership consequences arise at completion. Every approval that depends on the new shareholding should therefore be secured, or confirmed unnecessary, before the parties sign the instrument.
- Map the target. Record its business activities against the Foreign Business Act Lists, its land, its promotion certificate and its licences.
- Model the three thresholds. Calculate the post-completion position under section 4 of the Foreign Business Act, sections 97 and 98 of the Land Code, and the Commission’s merger criteria.
- Read the articles. Identify consent rights, pre-emption rights and preference share terms that affect the transfer.
- Secure licensing first. Obtain the Foreign Business Licence, certificate or exemption confirmation that the new shareholding requires.
- Resolve the land. Decide how land held by the target will be dealt with before it falls within section 97.
- Settle tax in the contract. Allocate stamp duty and any section 70 withholding in the share purchase agreement.
- Complete and register. Execute the instrument under section 1129, stamp it, update the register, and file any director change within fourteen days under section 1157.
- Notify where required. File a post-merger notification within seven days where the Commission’s criteria apply, and carry the new list of shareholders into the annual filing under section 1139.
For a wider view of deal structure, due diligence and transaction documents, see our mergers and acquisitions practice.
Frequently asked questions on share transfer in Thailand
Does a share transfer in Thailand have to be registered with the DBD?
Can a foreign buyer acquire 49 percent of a Thai company without restriction?
What happens to company land after a foreign takeover?
Who pays stamp duty on a share transfer in Thailand?
Is a share transfer void if the witness signature is missing?
Conclusion on share transfer in Thailand
A share transfer in Thailand is easy to sign and harder to complete correctly. The Civil and Commercial Code decides whether the transfer is valid and when it binds the company. Meanwhile, the Foreign Business Act, the Land Code and the Trade Competition Act each decide, by different tests, what the new ownership means. A buyer that models all three before signing controls the outcome. Otherwise, the regulator decides it after completion.
Acquiring shares in a Thai company?
Lex Bangkok acts for foreign buyers on share acquisitions in Thailand. We test the target against the Foreign Business Act, the Land Code and the Trade Competition Act, and review the articles, the register and the promotion certificate. Where the new shareholding needs it, we obtain the Foreign Business Licence or certificate before completion. We then draft the share purchase agreement and transfer instrument, run completion and the register update, and file the post-merger notification. For incorporations and restructurings around the deal, see our company registration practice.