With effect from January 5, any Thai company or partnership declaring capital of B5 million or more when registering must prove that the capital actually exists. The same applies to companies increasing capital to more than B5 million.
The new rule came into force after Commerce Minister Gen Chatchai Sarikaya noted that there had been a surge in such businesses being registered since January 5 this year.
Any business registering as having B5 million or more in capital must produce documentary evidence of cash invested in the company within 15 days of registering. If the investment is in assets (land, for example), supporting documentation must be produced within 90 days.
In the case of capital in an existing company being increased, evidence of that must be produced at the time the increase is registered.
Surachai Chaiwat, Vice President Phuket Chamber of Commerce said, “I completely agree with this. It brings transparency to business.
“I don’t think there will be many objections to this because usually it’s only big businesses that have registered capital of more than B5 million – such as my own vehicle business.
“It creates a level playing field for all businesses at this level.”
The Vice-Chairman of the International Business Association of Phuket, Jason Beavan, GM of Class Act Media, agreed. “It’s sensible. There have been too many people exploiting the existing loopholes up until now,” he said.
The new rule does not affect existing businesses as long as they do not increase their capital beyond B5 million.