A joint venture exists when two or more parties or companies join forces with a view to make profits or share losses. However joint ventures do not legally exist within Thailand law. They are merely an understanding between the parties or companies stated in contractual format, this then binds them. The contract cannot be registered in any Thai government body.
There are essentially two types of Joint Ventures:
1.Incorporated Joint Venture
2.Un-Incorporated Joint Venture
An Incorporated Joint Venture requires that the incorporated parties remain separate entities with relation to tax submissions.
The Un-Incorporated Joint Venture requires that the un-incorporated parties file for a tax number for the purpose of tax submissions.
Joint Ventures in Thailand are most commonly found between Thai nationals and Foreigners. It must be noted that if the Joint Venture is intended to be a majority of foreign shareholders, its status needs to change and must be registered under the Foreign Business Laws of Thailand. It will be governed by the Foreign Business Act or it may also have Board of Investment privileges. It can also fall under the Amity Treaty.
Joint Ventures can quickly escalate into nightmare situations so please contact us for more information before you engage in one. And remember Juslaws & Consults offers a FREE first consultation for any legal need.