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Foreign Company Fund Raising via Thai Capital Market - Holding Company Structure & Shareholder Criteria

This article explains the requirements for a foreign company to raise funds through the Thai capital market using a holding company structure. It covers the qualifications of holding company shareholders, director residency requirements, investment proportions, and criteria for a successful share offering.

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Foreign Company Fund Raising via Thai Capital Market - Holding Company Structure & Shareholder Criteria

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  1. Channel for Fund Raising of Foreign Company through Thai Capital Market - Holding Company

  2. Structure of Holding Company Shareholders(Thai/foreign) At least 50% of directors must be Thai resident* (PLC Act) Holding Company (Thai incorporated) > 50% (must be maintained) Foreign subsidiary (core business) At least 1 director must be Thai resident* Notes: * Thai Resident refers to individual living in Thailand > 180 days in a calendar year

  3. Holding Company (Investment Proportion) Holding Company Holds shares* > 50% > 50% > 50% > 25% <25% <25% Sub. A Sub. B Sub. C D E F • (b) Size of sub.> 25% of size of holding co. • (C)Size of other companies • < 25%of size of holding co. • (a) Size of sub. + company (where holding co. holds shares >25%) > 75% of size of holding co. Companies undertaking core businesses • Other companies Notes : - Companies undertaking core businesses : holding co. must have >25%of voting rights - Sub. : Subsidiary

  4. Holding Company (Qualifications) Criteria of Share Offering Approved by theSEC &Comply with disclosure requirement (filing prospectus jointly prepared by SEC approved financial advisor) Qualifications of Holding Company (approval and maintain criteria) 1. No conflict of interest in shareholding & management structures 2. Check & balance mechanism is in place: independent directors & audit committee members are appointed 3. Sound management system & reliable information disclosure 4. Financial statements are reviewed/audited by SEC approved auditor 5. Having control over subsidiary: - appoint representative as director in subsidiary proportionately to shareholding; - appropriate measure is available in case of related party transaction with potential conflict of interest

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