What should a Joint Venture Agreement include under Thai law?

1. Definitions and Interpretation
2. Formation of the Company
3. Share Capital and Subscription
4. Foreign Ownership and Nominees
5. Board of Directors
6. Management
7. Shareholders' Meetings and Reserved Matters
8. Deadlock
9. Dividends, Accounts and Information
10. Transfer of Shares
11. Events of Default and Call Option
12. Confidentiality and Personal Data
13. Anti-Bribery and Compliance
14. Warranties
15. Term and Termination
16. Costs
17. Notices
18. Governing Law and Disputes
19. General

• This Agreement itself carries no stamp duty. A joint venture agreement between future shareholders of a company is not an instrument listed in the Stamp Duty Schedule of the Thai Revenue Code.
• Share certificates issued by the Company carry duty of 5 THB each (Instrument 11), paid by the Company as issuer.
• Every later transfer of Shares (under the right of first refusal, tag-along, drag-along, deadlock or call option) is made by an instrument of transfer that carries duty of 1 THB for every 1,000 THB, or part of 1,000 THB, of the paid-up value of the Shares or the price in the instrument, whichever is higher (Instrument 2). The transferor pays it.
• If someone signs for a Party under a power of attorney, the power of attorney carries duty of 10 THB for a single act or 30 THB for more than one act (Instrument 7). A proxy for a shareholders' meeting carries 20 THB for one meeting.
• An instrument that is not stamped cannot be used as evidence in a Thai civil case until the duty and a surcharge are paid (Revenue Code section 118).

• Reserve the company name with the Department of Business Development first. Have a second name ready in case the first is refused.
• The memorandum of association and the articles of association are filed in Thai. They bind the Company and outsiders; this Agreement binds only the two Parties. Ask the person handling registration to write the board rules, the Reserved Matters (Clause 7.3) and the share transfer rules (Clause 10) into the articles as far as the Registrar accepts them (Clause 2.2).
• Open the Company's bank account and pay for the Shares exactly as Clause 3.3 says. Keep the bank slips: the Registrar and later the Revenue Department may ask for evidence that each Party paid its own money.
• Register the authorised signatories as two directors signing together, one from each Party (Clause 5.7). If the Company decides to have a seal, register it at the same time.
• A foreign director who will work in Thailand needs a visa and a work permit. Being a shareholder or director does not by itself allow a person to work in Thailand.

• If aliens hold half or more of the Shares, the Company is treated as an alien under the Foreign Business Act B.E. 2542 (1999). Many service businesses are then closed to it until it obtains a Foreign Business Licence, a Foreign Business Certificate (for example with BOI investment promotion or under the Thailand–US Treaty of Amity), or another permission.
• A Thai company that is a shareholder counts as an alien if aliens hold half or more of its own shares. Check the shareholders of each corporate Party, not only its place of incorporation.
• Nominees. A Thai person or company that holds Shares for a foreigner, or with money provided by a foreigner, commits a criminal offence, and so does the foreigner. The Company can also lose its licences. Each Party confirms in Clause 4.2 that it invests its own money. Do not sign if that is not true.
• Land. A Thai company with substantial foreign shareholding is generally treated as a foreigner for land ownership under the Land Code, with limits on both the foreign percentage of capital and the number of foreign shareholders. If the Company will buy land, ask a Thai lawyer to check the shareholding before it buys (Clause 4.3).

• The Company pays corporate income tax on its profits. Dividends paid to shareholders are generally subject to withholding tax of 10%, which the Company withholds and files. A double tax treaty may reduce the rate for a foreign company shareholder. Confirm the rate with an accountant before the first dividend.
• A Party that sells Shares pays tax on any gain. For a foreign seller, the Thai buyer may have to withhold tax from the price. Agree the amount before completion.
• The Company must register for VAT once its taxable turnover exceeds the VAT registration threshold, or earlier if it chooses to.

• Clause 8 applies only after two meetings, properly called at least 14 days apart, fail to approve the same matter or fail to reach a quorum. Keep the notices and minutes of both meetings: they prove the Deadlock.
• A Buy-Sell Notice is binding once given. Name a price at which you are genuinely willing either to buy or to sell, because the other Party chooses, and a Party that does not answer in time is treated as selling (Clause 8.3).
• If mediation fails, either Party may require the Company to be wound up (Clause 8.4). Winding up ends the business and usually destroys value, so it is mainly a reason to agree. A sale of one Party's Shares to the other is still possible at any time.
• If mediation fails, the matter is simply not approved and the Company carries on under its last approved plan (Clause 8.4). Neither Party can force an exit, so agree on anything important in advance.
• Before selling to an outsider, give the other Party the Transfer Notice and wait 30 days (Clause 10.3). A sale made without it breaks this Agreement, and the Board should refuse to record it.
• Complete every share transfer with a written instrument signed by both sides and certified by a witness, deliver the share certificate, and have the Company record the transfer in its register of shareholders (Clause 10.7). Until the transfer is recorded, the new owner cannot rely on it against the Company or outsiders.

• Send board notices at least 7 days ahead with an agenda (Clause 5.4). Online attendance is allowed as far as the law permits; record who attended and how, and keep the recording or electronic log.
• Minute every decision on a Reserved Matter with the written approval of both Parties or their vote in favour (Clause 7.3). A Reserved Matter decided without both Parties is a breach of this Agreement even if it passes under the articles.

• The signed Agreement (all counterparts, or the PDF signed electronically), the filed memorandum and articles, and the Company's registration certificate and affidavit.
• Bank slips for every payment for Shares, and the board calls for unpaid amounts.
• Board and shareholders' minutes, business plans and budgets, and the monthly and audited accounts delivered under Clause 9.3.
• Every Deadlock Notice, Transfer Notice, Buy-Sell Notice and Call Notice, with proof of when it was sent and received (Clause 18.2).

• A company Party should sign through the directors authorised in its latest company affidavit (for a foreign company, the equivalent document), with the company seal if its affidavit requires one. Keep a copy of the affidavit and of each signatory's passport or ID card.
• A foreign company's documents used to register the Company in Thailand usually need notarisation in the home country, legalisation by a Thai embassy or consulate, and a Thai translation. Ask the registration agent which documents they need before the foreign Party signs.
• Clause 20.9 allows electronic signatures and signed PDF copies. Keep the final signed file unchanged.

• A Thai court works in Thai. A Party relying on this Agreement, or on English minutes and emails, must file a Thai translation certified as accurate. Ask a translation agency for a quote before starting proceedings.
• An arbitral award that must be enforced through a Thai court also needs a certified Thai translation.

Compiled from the notes that accompany the English contract templates on this site, published by Phuwara Krobtaku (ภูวรา ครอบตะคุ), Thai attorney-at-law, licence no. 477/2558. The short answer and summary at the top of this page are put together by the site from the template's clause headings and notes. Statutes are quoted only in the official Thai text: Thai is the only official language of Thai legislation, and an unofficial translation can mislead. Article registry OKC-AF8E79. If you reuse this content, please credit the author and link to the original.