THAILAND Trends and Developments Contributed by: Nattaya Tantirangsi, Kantinan Buraphacheep and Chawit Khiewtai, MSC International Law Office
MSC International Law Office 90, CW Tower Tower B 29th Floor Unit 2901–2902 Ratchadapisek Road Huai Khwang Sub-district Huai Khwang District Bangkok 10310 Thailand Tel: +66 2 168 3270 2
Email: info@msclaw.co.th Web: www.msclaw.co.th
Model B – mergers and acquisitions Autonomy and control may be key considerations when the management decides to “acquire” another business to expands their existing one. If two com - panies decide that it would benefit their businesses best when their resources and profiles are combined, a “merger” could be an option. Model C – joint venture Two or more companies may want to keep their main operations while creating a new business unit where only selected resources, eg, funds, labour or know- how, from each party are combined for a specific pur - pose or market. Certain tax incentives are provided to facilitate this form of business venture, as detailed below. Forms of Joint Venture in Thailand A joint venture may be an “unincorporated” joint ven - ture (UJV) or an “incorporated” joint venture (IJV). These are treated differently both on legal and tax aspects. Unincorporated joint venture (UJV) A UJV is a joint venture where the JV parties do not incorporate a new JV company. Relationships of the parties are, therefore, based on the joint-venture agreement (JVA). UJV agreement Since the UJV is not a limited company, provisions relating to the governance of a company under Thai -
Introduction One of the most suitable ways to describe the trends and developments in joint ventures (JVs) in Thailand is by comparing JVs to other forms of available business units and other approaches of forming businesses in Thailand, eg, consortiums and mergers and acquisi - tions. In Thailand, a JV has always been a popular choice because it offers both legal and tax incentives (as the authors will explain throughout this article). In recent years, a JV has been a form of business cho - sen by the Bank of Thailand to solve issues concern - ing non-performing assets following the COVID-19 pandemic by facilitating banks and asset manage - ment companies (AMCs) as parties to JV companies. Why Choose Joint Ventures Over Other Business Models? The following aspects must be considered prior to singling out the best business models that will suit your commercial and legal needs. Here are some examples. Model A – consortium If your business objective is to form a business unit without creating a new single entity, where the parties’ rights, obligations and liabilities are separate (or joint, in certain agreed circumstances) and based mainly on a contract, you may consider forming a “consortium”.
210 CHAMBERS.COM
Powered by FlippingBook