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ResourcesCorporate and Tax AdvisoryThailand Corporate LawCorporate Due Diligence When Buying a Small Business in Thailand

Corporate Due Diligence When Buying a Small Business in Thailand

Transcript of the above video:

As the title of this video suggests, we are discussing Corporate Due Diligence, specifically in the context of those who are looking to purchase, in this case a small business in Thailand. I have done some other videos on this where we are kind of discussing it in a more broad way but I'm specifically talking about small business acquisitions here in the Kingdom.

Corporate Due Diligence is actually more important than I think people give it credit for even in a smaller context because you know with a small business we could only be talking about maybe a $ 100-200,000 for example investment in the Kingdom you know 3 to 6 million being invested and to some huge corporation that doesn't seem like a lot of money but to somebody who for example is perhaps undertaking a second career by buying a business in Thailand in order to sort of be semi-retired but live off the business here, Corporate Due diligence can be really important in for a number of reasons.  

As strange as it sounds, some things that would never go over in western jurisdictions, do occur here in Thailand. For example I've actually seen businesses that you know there's a corporate entity there and an individual will be looking to buy it out and that individual is thinking that they're buying for example this specific venue; be it a restaurant or a bar or a guest house or something and it'll turn out that that entity doesn't have any rights in that particular enterprise. You know you can buy into the entity and yes on paper you now have an ownership interest in a company but that bar may be a sole proprietor under somebody else's name or that guest house may not have a license and may not be able to operate. 

For a myriad of different reasons, Corporate Due Diligence is really important Thailand and I think people don't think about undertaking it enough because they sort of take the rather laissez-faire relaxed vibe of Thailand and think that that means that the legal system is just as laissez-faire and that is not at all the case.  If anything, I would argue that the Thai legal system is rather rigid in certain ways and for that reason one needs to be rather rigid in their thinking with respect to purchasing a business in order to best protect one's rights into the foreseeable future with respect to that business. 

So those who are watching this video, If you are thinking of buying a small business in the Kingdom it is probably a good idea to consult a legal professional, get a better understanding of what the posture of that business is, what it's what it's tax compliance looks like, what its property holdings are etc., before making any irrevocable decisions that could prove detrimental post-purchase.