A Joint Venture is when two or more companies join forces with a view to make profit and share losses. There are essentially two types of Joint Ventures being:
1.Incorporated Joint Venture
2.Un-Incorporated Joint Venture.
However, the effect of a Joint Venture legally does not exist in Thai Law. It is a mere understanding between the parties or companies stated in a contractual format that binds these two, however this is not registered with a relevant government departments.
The incorporated Joint Venture is where two or more entities that are incorporated under the laws of Thailand join together with a view to make profit, and remain separate entities with relation to tax submissions.
The Un-incorporated joint venture on the other hand is where two or more parties that are not registered entities, join together for the same reason as a part of a contractual basis as well, however, since there are separate parties, they do not have to register such an entity as the Thai law does not govern on Joint Ventures, but must file for a tax number for the purpose of tax submissions.
Joint Ventures in Thailand are most common between Thai nationals and foreigners. For this reason, it must be noted that if the Joint Venture is intended to be a majority of foreign shareholding, that it must be registered under the Foreign business laws in Thailand. That is, either governed by the Foreign Business Act, or may also have Board of Investment Privileges. This can also fall under the Amity Treaty.
Please contact us for more information on the various business entities and Joint Ventures at our relevant offices or alternatively by email.