We have an international client that uses our BOI Thailand service, who has an interesting question regarding what their investment promotion allows them to do.
Question: We are currently engaged in discussions with another company about forming a Joint Venture (JV) company. They would hold 51% of this company and we would hold 49% of the company.
The company is to provide “Engineering and Repair Management Services” to the Thai offshore industry. Our own involvement is the specialised management and knowledge we have which will assist the JV by utilising their yard assets for this work. The delivery of this JV company will include Engineering, Procurement, Construction and Installation (EPCI) services and activities.
- We are interested to find out if our Thai BOI company in its current form, can hold the 49% as a company and not individuals?
- Are we acting outside of our BOI remit?
- How would we be able to issue shares of this 49% to our Thai BOI company and its directors and employees?
- Yes your Thai BOI company can hold 49%of another Thai company (JV).
- The activity of investing in another company is not part of your BOI promoted activities, but you can do it and will not violate the foreign business law.
- If the other party is a Thai company, then the 49% of your side can be held by anyone; your BOI Thai company, US or UK companies, individuals, any directors or non-directors. Therefore, of the 49%, you can divide it however you like it.
If the other party is a foreign company, then we need to discuss this more by taking into consideration the foreign business law which does not allow an engineering company to be owned by majority foreign shareholders, unless you obtain an investment promotion from the BOI or get a Foreign Business License.
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