THAILAND Law and Practice Contributed by: John Formichella, Naytiwut Jamallsawat, Onnicha Khongthon and Supitchaya Akeyati, Formichella & Sritawat Attorneys at Law
3. Initial Public Offering (IPO) as a Liquidity Event 3.1 IPO v Sale High-growth Thai technology companies increasingly consider IPOs on the SET or MAI as attractive alter- natives to trade sales, mainly for valuation uplift and continued founder control. Trade sales remain faster with lower execution risk, but may not offer the same valuation multiple as public-market listings for fintech The MAI is the preferred platform for most technol- ogy issuers due to its lower capital threshold (THB50 million), lighter profitability track record requirements and more flexible governance standards. Larger or BOI-promoted digital platform companies tend to target the SET for greater liquidity and institutional participation. 3.3 Impact of the Choice of Listing on Future M&A Transactions or software companies. 3.2 Choice of Listing MAI listings impose lighter disclosure obligations, giving management more flexibility post-IPO. SET listings, however, trigger stricter related-party and tender-offer rules once an acquirer crosses 25%, complicating subsequent take-private attempts. 4. Sale as a Liquidity Event (Sale of a Privately Held Venture Capital- Financed Company) 4.1 Liquidity Event: Sale Process The typical sale process spans four to six months. It includes: • preparation of marketing materials; • a competitive auction run by an M&A adviser; • execution of non-disclosure agreements (NDAs); • data room population; • management presentations; • indicative bids; • confirmatory due diligence; and • signing/closing (or short deferred closing pending regulatory approvals).
4.2 Liquidity Event: Transaction Structure Share deals dominate because they transfer the entire corporate package – including licences, contracts and BOI benefits. For telecoms-licensed companies, for- eign buyers often acquire a 49% stake directly and create a Thai-majority joint venture for the remaining 51% to comply with foreign ownership rules. 4.3 Liquidity Event: Form of Consideration Cash continues to be preferred by financial investors, while strategic buyers increasingly favour mixed con- sideration. Earn-outs based on revenue or EBITDA performance over 12 to 36 months are common for software targets. 4.4 Liquidity Event: Certain Transaction Terms Representations and warranties (R&W) insurance is common. Escrows or holdbacks of 10%–15% for 12 to 24 months, capped indemnity baskets and detailed IP warranties are standard. Non-compete and non- solicitation agreements lasting two to three years are enforceable if reasonable. Spin-offs of digital and fintech units from traditional conglomerates have increased as groups seek valua- tion clarity and operational focus ahead of listings or strategic exits. The structure is also used to segre- gate regulated payment-service or telecoms licences before broader group transactions. 5.2 Tax Consequences A spin-off structured as an entire business transfer under the relevant Revenue Department notifications can qualify for exemptions from VAT, specific business tax, stamp duty and, in many cases, corporate income tax on unrealised gains, provided the receiving entity continues the same business for at least three years. 5.3 Spin-Off Followed by a Business Combination Where the spin-off qualifies for entire-business-trans- fer treatment, subsequent mergers or sales generally avoid incremental tax on unrealised gains, provided continuity conditions are satisfied. Merger control fil- 5. Spin-Offs 5.1 Trends: Spin-Offs
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