Most people arrive at a Thai company with two numbers in their head. Two million baht of capital. Forty-nine per cent of the shares. Both are real numbers. Neither comes from the law that governs how a company is formed and how its capital is paid.
That law is the Civil and Commercial Code. It says how many people it takes, what a share is worth, and how much of the price has to be handed over and when. The figures are smaller than most people expect and the timing is tighter.
It also changed in 2023. A good deal of what is still repeated about Thai companies is out of date.
How many people does it take to set up a Thai company?
Two. The figure was three until February 2023.
Any two or more persons can form a limited company by signing a memorandum and following the Code [Civil and Commercial Code, section 1097, as replaced by the Amendment Act (No. 23) B.E. 2565]. That amendment was published on 8 November 2022 and took effect on 7 February 2023. Every promoter takes at least one share, every share the company will register has to be taken up before registration, and no offer is made to the public. A private company raises its money from the people already in the room.
Two is the floor afterwards as well. A general meeting can only pass a resolution if at least two shareholders or proxies attend holding at least a quarter of the capital between them [section 1178], and the court can dissolve a company whose shareholders fall to one. The memorandum has a shelf life too: if the company is not registered within three years of the registrar accepting it, the memorandum lapses.
One point of practice rather than law. At the Department of Business Development the promoters who sign the memorandum are individuals, and a company that will hold shares is entered as a shareholder after incorporation.
| Step | What the Code requires | Section |
|---|---|---|
| Promoters | Two or more persons sign a memorandum | 1097 |
| Memorandum | Name, where in Thailand the registered office will be, objects, a statement that liability is limited, the share capital and its division into shares of a fixed amount, and the promoters' details | 1098 |
| Subscription | Every promoter takes at least one share, every share to be registered is taken up first, and no offer is made to the public | 1100, 1104, 1102 |
| Statutory meeting | Adopts the regulations, appoints the first directors and auditors, and fixes any shares to be treated as paid in something other than money | 1108 |
| Payment | At least twenty-five per cent of the value of each share | 1105, 1110 |
| Registration | The directors apply once that is paid, and the entry states the amount paid on each share and the total received | 1111 |
| Deadline | If registration does not happen within three months of the statutory meeting, the company is not formed | 1112 |
All references are to the Civil and Commercial Code. Where every step is completed on the day the promoters sign the memorandum, the memorandum and the company can be registered on the same day.
How much registered capital does the company need?
Under company law, none. The Code fixes no minimum capital. The only floor is that a single share cannot be worth less than five baht [Civil and Commercial Code, section 1117].
The two million baht everybody quotes comes from other laws, and each of them measures something different. The Foreign Business Act treats a company as foreign where half or more of its shares are held by foreigners, and requires such a company to start with at least two million baht of capital, or three million where the business needs a foreign business licence [Foreign Business Act B.E. 2542, section 14]. Under the ministerial regulation, a licensed business needs the greater of three million baht or a quarter of its estimated operating expenses for the first three years. For that Act, the test is registered capital.
Two further rules borrow the same number and both measure paid-up capital. The Department of Employment issues work permits at one foreigner for every two million baht of fully paid-up registered capital, capped at ten. And the Immigration Bureau grants a yearly extension of stay on business grounds only where the company has paid-up registered capital of at least two million baht and four Thai employees for each foreigner [Immigration Bureau Order 12/2568, clause 2.1]. None of these is a company law rule. They are set side by side in what a newly registered Thai company is usually missing.
How much of that capital has to be paid up?
Twenty-five per cent, in money, before the company exists.
Shares cannot be issued below their face value, and the first payment on each share must be at least twenty-five per cent of it [Civil and Commercial Code, section 1105]. After the statutory meeting the directors collect that payment from every subscriber, and only then apply for registration. The registration entry records the amount paid on each share and the total money received [sections 1110 and 1111]. The Department of Business Development's own registration form prints the words "at least twenty-five per cent" beside the box.
The other seventy-five per cent does not disappear. It stays owing on the shares, and it is the measure of each shareholder's liability [section 1096]. Unless a general meeting decides otherwise, the directors can call it up at any time on at least twenty-one days' notice by registered letter [sections 1120 and 1121]. An unpaid call can end in the shares being forfeited and sold.
Registered capital is a figure the company chooses. Paid-up capital is a payment the Code requires. Only the second one leaves a record of money moving.
Civil and Commercial Code, sections 1105 and 1111
- Registered capital
- The share capital the company says it has in its memorandum, divided into shares of a fixed amount.
- Paid-up capital
- What has been paid on those shares, recorded against each shareholder in the register of shareholders.
- The unpaid balance
- The difference between the two. It is still owed to the company, the directors can call it in, and it is what each shareholder is liable for.
Can work, land or equipment count instead of money?
Only if it was described and approved in advance, at the statutory meeting or by special resolution. Otherwise every share is paid in money.
The rule is money. Every share is paid in full in money, and a shareholder cannot set off a debt the company owes them against what they owe on their shares [Civil and Commercial Code, section 1119]. A shareholder who lent the company money cannot cancel that loan against unpaid capital. The loan and the shares are two different things.
The Code allows two exceptions. At the statutory meeting the subscribers can agree that certain shares count as paid, wholly or partly, in property or services, as long as what is being given was described before the meeting [section 1108]. After incorporation, new shares can be issued as paid in something other than money only by special resolution, which needs three quarters of the votes cast [section 1221]. Either way it is a formal act: valued, described in advance, resolved on and recorded. Value that was never put to a meeting has not become paid-up capital.
Do the shareholders have to show where the money came from?
The Code records who paid what. The Foreign Business Act punishes a Thai who holds shares for a foreigner. Whether anyone asks to see the money trail is a matter of practice, and when they ask, that is what they look at.
Under the Code, a person who subscribes for shares binds themselves to pay for them, in money, and the register of shareholders records against each name the shares held and the amount paid on them [section 1138]. Once a year, within fourteen days of the annual general meeting, the directors send that list to the registrar [section 1139]. It is the form known as Bor Or Jor 5. The obligation sits on the person named, and what was paid is recorded against that name.
The Foreign Business Act sits alongside. It is an offence for a Thai to hold shares as a foreigner's nominee so that the foreigner can run a restricted business, punishable by up to three years in prison, a fine of 100,000 to 1,000,000 baht, or both, and the court orders the shareholding to end [Foreign Business Act B.E. 2542, section 36]. What the authorities examine when they look at a shareholding is set out in what Thai authorities examine when they review a company.
The rest is practice. Where a shareholding is examined, the evidence looked at is the payment trail behind the register entries. Bank account opening is in the same category: each bank sets its own paperwork, and that is bank policy rather than company law.
Can the capital be increased or reduced later?
Both, by special resolution. Increasing it is quick. Reducing it takes at least thirty days, because creditors get a say.
A company increases its capital by issuing new shares under a special resolution. The new shares go first to the existing shareholders in proportion to their holdings, by a notice fixing a date after which the offer lapses, and only then can the directors place them elsewhere [Civil and Commercial Code, section 1221].
A reduction also needs a special resolution, by lowering the value of each share or cutting the number of shares, and the capital cannot go below a quarter of its total [section 1225]. The company then publishes its intention once in a local newspaper and writes to every known creditor, who has thirty days to object. If anyone objects, the reduction waits until that debt is paid or secured [section 1226]. Either resolution has to be registered within fourteen days of being passed [section 1228].
What this means in practice
Three rules do most of the work. The capital figure is chosen by the company. Twenty-five per cent of it is a payment the Code requires before registration. And the record shows the paid-up figure.
The documents that carry all of it are ordinary ones: the memorandum, the minutes of the statutory meeting, the registration entry, the register of shareholders and the share certificates. Where a company's capital is examined, those are the documents examined, together with the bank records behind them. Office practice varies between provinces. The sections above do not.
None of it scales. A company with one hundred thousand baht of registered capital and a company with fifty million are on exactly the same rules.
Proviso advises foreign investors and business owners on Thai company formation, capital structure and shareholder documentation, and on what the Civil and Commercial Code and the Foreign Business Act require. If you would like your company's capital and shareholder records reviewed against those requirements, get in touch.
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Every statement in this article rests on one of the 29 provisions below, each named by Act and section so it can be checked against the legislation itself.
- Civil and Commercial Code, section 1096. A limited company is formed with the capital divided into shares, and the liability of the shareholders is limited to the amount, if any, unpaid on the shares respectively held by them.
- Civil and Commercial Code, section 1097, as replaced by section 6 of the Civil and Commercial Code Amendment Act (No. 23) B.E. 2565. Any two or more persons may promote and form a limited company.
- Civil and Commercial Code Amendment Act (No. 23) B.E. 2565. Published in the Royal Gazette on 8 November 2022, in force ninety days after publication, on 7 February 2023.
- Civil and Commercial Code, section 1098. Particulars the memorandum must contain, including (5) the amount of share capital and its division into shares of a fixed amount and (6) the names, addresses, occupations and signatures of the promoters and the shares each has subscribed.
- Civil and Commercial Code, section 1099, as replaced by section 7 of the Amendment Act (No. 23). The memorandum lapses if the company is not registered within three years of the registrar accepting it for registration.
- Civil and Commercial Code, sections 1100, 1102 and 1104. Every promoter subscribes at least one share; no invitation to subscribe may be made to the public; the whole number of shares must be subscribed or allotted before registration.
- Civil and Commercial Code, section 1105. Shares may not be issued below their nominal amount, and the first payment must not be less than twenty-five per cent of that nominal amount.
- Civil and Commercial Code, section 1106. A subscriber binds himself, on condition that the company be formed, to pay the company the amount of the shares subscribed.
- Civil and Commercial Code, section 1108. Business of the statutory meeting, including (5) shares allotted as fully or partly paid up otherwise than in money, with the description of the service or property laid down before the meeting.
- Civil and Commercial Code, sections 1110, 1111 and 1111/1. Directors cause payment of not less than twenty-five per cent on each share; the application for registration and its particulars; registration of the memorandum and the company on the same day.
- Civil and Commercial Code, section 1112. If registration does not take place within three months after the statutory meeting the company is not formed and the money must be repaid without deduction.
- Civil and Commercial Code, section 1117. The amount of a share may not be less than five baht.
- Civil and Commercial Code, section 1119. The whole amount of every share must be paid in money, except shares allotted under section 1108(5) or section 1221, and a shareholder cannot avail himself of a set-off.
- Civil and Commercial Code, sections 1120 to 1125. Calls on shares, twenty-one days' notice by registered letter, interest, forfeiture and sale by public auction with any surplus returned.
- Civil and Commercial Code, section 1128. Particulars of a share certificate, including the amount paid on each share where the shares are not fully paid up.
- Civil and Commercial Code, section 1130. The company may decline to register a transfer of shares on which a call is due.
- Civil and Commercial Code, sections 1138 and 1139. The register of shareholders and its particulars, and the copy of the list sent to the Registrar at least once a year and no later than the fourteenth day after the ordinary meeting.
- Civil and Commercial Code, section 1178, as replaced by section 13 of the Amendment Act (No. 23). A general meeting requires at least two shareholders or proxies holding not less than one quarter of the company's capital.
- Civil and Commercial Code, section 1194. A special resolution requires a majority of not less than three quarters of the votes of the shareholders present and entitled to vote.
- Civil and Commercial Code, sections 1220 to 1228. Increase of capital by special resolution, the offer of new shares to existing shareholders, reduction by special resolution, the one quarter floor, newspaper publication and thirty days for creditors to object, and registration of the resolution within fourteen days.
- Civil and Commercial Code, section 1237(4), as replaced by section 15 of the Amendment Act (No. 23). The court may dissolve a company where the number of shareholders is reduced to one.
- Foreign Business Act B.E. 2542, section 4. Definition of a foreigner, including a Thai-registered juristic person at least half of whose capital shares are foreign held, and the definition of capital, which for a limited company is its registered capital.
- Foreign Business Act B.E. 2542, section 14. Minimum capital of not less than two million baht, and not less than three million baht where the business requires permission under the annexed lists.
- Ministerial Regulation on minimum capital under the Foreign Business Act, as consolidated with effect from 28 August 2019. For a business run under a foreign business licence, the greater of twenty-five per cent of average estimated operating expenses over the first three years or three million baht per licensed business.
- Foreign Business Act B.E. 2542, section 36. The offence of holding shares on behalf of a foreigner, its penalties and the court order to cease.
- Department of Employment, Regulation on Work Permit Consideration Criteria B.E. 2552, clause 5(3). Two million baht of fully paid-up registered capital per work permit, capped at ten.
- Immigration Bureau Order 12/2568 of 23 January 2025, criteria clause 2.1(3). Paid-up registered capital of not less than two million baht for an extension of stay on business grounds.
- Department of Business Development, company registration form Bor Or Jor 3. Records the amount paid on each share, annotated "at least twenty-five per cent". Cited as a form, not as law.
- Department of Special Investigation, published guidance on business registration for foreigners. Cited as guidance, not as law.
Section numbers are given so you can check every statement in this article against the legislation itself. Where a provision exists only in Thai, the section number and the name of the Act are stated so the Thai text can be located. Statements about departmental or bank practice are labelled as practice and carry no section number, because there is none.
How many shareholders does a Thai limited company need?
Two. The minimum dropped from three to two on 7 February 2023. Two is also the quorum for a general meeting, provided the two hold at least a quarter of the company's capital between them.
Can we pay in twenty-five per cent of the capital and leave the rest?
Yes. The first payment on each share must be at least twenty-five per cent of its value, and the balance stays owing. The directors can call it in at any time on at least twenty-one days' notice by registered letter, and each shareholder is liable for the amount unpaid on their shares.
Does share capital have to be paid in cash?
Yes, unless the shares were approved in advance as paid in property or services. That approval is given at the statutory meeting, with the property or service described beforehand, or for new shares by special resolution. A shareholder cannot cancel a loan to the company against unpaid capital.
How far can a Thai company reduce its registered capital?
To a quarter of its total, and no lower. A reduction needs a special resolution, one newspaper notice, a letter to every known creditor with thirty days to object, and registration of the resolution within fourteen days of passing it.
Is the share register book required?
Yes. Every limited company must keep a register of shareholders showing the shares each holds and the amount paid on them, and the directors send a copy of the list to the registrar every year within fourteen days of the annual general meeting.
This article is general information about Thai law, not legal advice, and reading it does not create a lawyer-client relationship. It reflects the legislation as reviewed on 2 September 2026. Thai law and administrative practice change, and practice varies between offices and provinces. For advice on a particular situation, get in touch. See our editorial standards and disclaimer.
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