THAILAND Law and Practice Contributed by: John Formichella, Naytiwut Jamallsawat, Onnicha Khongthon and Supitchaya Akeyati, Formichella & Sritawat Attorneys at Law
6.12 Irrevocable Commitments Major shareholders often provide hard commitments to tender, significantly reducing execution risk. 6.13 Securities Regulator’s or Stock Exchange Process SEC review of the tender offer document typically takes ten to 14 business days. The SET may impose disclosure requirements or temporary trading halts. 6.14 Timing of the Takeover Offer The offer period is 25 to 45 business days, extendable up to 90. 7. Overview of Regulatory Requirements 7.1 Regulations Applicable to a Technology Company Technology businesses must comply with: • the Personal Data Protection Act (PDPA); • the Cybersecurity Act; • the Electronic Transactions Act; and • where relevant, the Telecommunications Business Act. BOI-promoted companies receive incentives but must meet ongoing compliance requirements. 7.2 Primary Securities Market Regulators The SEC regulates public offerings, takeovers and ongoing disclosure. The SET supervises listing and trading. 7.3 Restrictions on Foreign Investments The Foreign Business Act caps foreign ownership at 49% for businesses listed in the restricted categories unless a foreign business licence or BOI promotion is obtained. Telecommunications licensees (Type II/ III) must remain Thai-owned and free of “foreign domi- nance”. Relevant indicators include foreign sharehold- ing at or above 50%, a foreign-majority board, special voting rights or arrangements giving foreigners deci- sive influence.
Creative structures using preferred shares, share- holder agreement voting mechanics and parallel Thai- majority joint venture vehicles are frequently used to align economic ownership with foreign investors while maintaining Thai nationality of the licensee. 7.4 National Security Review/Export Control Investments involving encryption, critical infrastruc- ture or defence-sensitive technologies may trigger Pre-merger approval is required where a transaction may create a dominant operator. Transactions that do not create dominance but involve aggregate Thai turn- over above the statutory threshold must be notified post-completion. Early assessment is recommended. 7.6 Labour Law Regulations The Labour Protection Act establishes a 48-hour work week, with overtime at 1.5x (or higher for holidays) and a minimum of six days’ annual leave after one year. Severance is required for termination without cause: up to 300 days’ wages after 10 to 20 years and 400 days after 20 years or more. In technology deals, employee-incentive plans and change-of-control provisions are key issues. Thai law generally requires employee consent for transfer of employment; there is no automatic-transfer rule. Employee transfer mechanisms and communication planning are essential to minimise disputes. review by security agencies. 7.5 Antitrust Regulations Employers must contribute to the Social Security Fund at 5% of salary up to the statutory cap. Non- compete and non-solicitation covenants are enforce- able if reasonable, and typically last one to two years for senior tech personnel. 7.7 Currency Control/Central Bank Approval Repatriation of dividends, loan repayments and sale proceeds through authorised banks are permitted with supporting documents. Inbound foreign cur- rency receipts of USD50,000 or more require a for- eign-exchange form. Outbound remittances above set thresholds require documentation such as board resolutions or agreements. Large cross-border pay-
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