While incorporating a Partnership for Thai nationals is considered very simple to do with far less restrictions, partnerships for Foreigners are restricted by the Foreign Business Act.
Generally, a partnership is established through an agreement made by the potential partners. All prospective partners agree to invest in the establishment of a partnership prior to the commencement of a certain activity; in some cases a partner can join an already existing partnership (it can be done by either entering as a new partner or buying shares from one of the actual partners).
Terms shall be clearly specified (orally or in writing), nevertheless, in some cases a partnership is based on relations between partners. Although it is not necessary to make the establishment agreement in writing, partnerships which are created to perform big projects and which require substantial investments (or the activities require documentary evidence), normally require a written agreement to avoid disputes in future.
There are two types of Partnerships in Thailand, Ordinary and Limited. According to the Thailand Civil and Commercial Code, a partnership is "A contract whereby two or more persons agree to unite for a common undertaking, with a view of sharing the profits which may be derived there from."
Number of Partners
2 or more
2 or more
1 or more
Under the Foreigner Business Act, foreigners who wish to operate in any kind of partnership soon find out that their participation is restricted. If a foreigner invests more than half of the overall investment or names themselves a managing partner, the Foreign Business License law shall be applied. Therefore, to avoid the Foreign Business License, foreigners should not invest more than half and should not act as a managing partner in a partnership.
THUS, if a foreigner cannot act as a managing partner, it is less likely that they can protect their interests. Therefore Juslaws & Consult strongly suggests that foreigners stay away from all types of partnerships.