Buying an existing business in Thailand

Share deal or asset deal: the first fork

In a share purchase you buy the company itself: its licences, contracts, staff, tax history and every liability, disclosed or not, from unpaid taxes to the lawsuit nobody mentioned. In an asset purchase you buy the pieces you want, the lease, equipment, brand, customer contracts, into a clean company of your own, leaving the seller's history behind. The default instinct of well-advised buyers in Thailand is the asset deal, precisely because company histories here are hard to verify to the bottom. The countervailing forces are practical: licences and concessions often do not transfer, contracts may need counterparty consent, and asset transfers can carry higher transaction taxes, VAT and transfer fees on land among them, than a share transfer's stamp duty. Sellers also often prefer share deals for their own tax reasons and price accordingly. There is no universal answer; there is a correct answer per deal, and it falls out of the licence and liability analysis below. Foreign buyers must also overlay ownership limits from the start: the Foreign Business Act and any sector rules apply to you on completion regardless of how the seller was structured, and if the target's compliance depended on arranged Thai shareholders, you are buying a structure the 2026 nominee enforcement is actively dismantling, a subject our separate briefing covers in detail.

The licence transfer trap

The phrase fully licensed in a sale prospectus deserves immediate suspicion, for two reasons. First, many Thai licences are non-transferable in an asset deal: liquor licences, hotel licences, food and drug approvals, school licences and various concessions attach to the operator entity or premises and must be applied for afresh, with no guarantee the new application succeeds under current rules, which may be stricter than when the seller obtained theirs. A hotel that was licensable in 2009 may not be licensable as-built today. Second, even in a share deal, where licences stay with the company, a change of shareholding or director can trigger notification or approval requirements, and some licences were only ever valid because of who the previous owner was or what the inspectors overlooked. The diligence question is never does a licence exist but would this operation be licensed today, on these premises, under this ownership. Where the answer is doubtful, the deal should be conditioned on regulator confirmation, not on the seller's reassurance.

Employees transfer, with their history

Thai labour law is protective, and severance entitlements scale with service, reaching 400 days' wages for employees with 20 years or more. In a share deal the workforce simply continues, and every year of service already accrued is your liability now: a business with long-serving staff carries a severance balance sheet that rarely appears in the accounts. In an asset deal, employees do not transfer automatically; they must consent to move, and the treatment of their accrued service, whether the buyer recognises it or the seller pays severance at the boundary, is a negotiation point that must be settled in the purchase agreement, not discovered afterwards. Diligence should also sweep for unpaid social fund contributions, misclassified contractors, work permit compliance for any foreign staff, and the informal arrangements, cash allowances, unwritten bonuses, that staff will regard as contractual whatever the paperwork says.

The diligence set

• Corporate: DBD extracts, shareholder history and share payment evidence, articles, board minutes, and any signs of nominee structuring.
• Financial: audited statements against management accounts against bank statements; in cash businesses, the three rarely agree, and the bank statements are the vote that counts.
• Tax: filings and payment records for CIT, VAT and withholding, and exposure assessment for the audit that a change of ownership can attract.
• Legal: litigation search, contract review for change-of-control clauses, and verification that key contracts are signed and current.
• Licences and property: the licensed-today analysis above, plus title, lease terms, lease transferability and building permits against actual construction.
• Operational: supplier and customer concentration, and whether the business survives the departure of the owner's personal relationships.

Calibrate diligence to the market you are in. Small-business sales in resort areas run heavily on stories, and the sales deck and the tax filings frequently describe two different companies. Where they diverge, price off the filings and the bank statements.

Seller psychology, and closing well

Read the seller as carefully as the accounts. Fair questions: why sell a business this good, why now, and what does the seller do next, with a non-compete if the answer is anything nearby. Common patterns worth recognising: the retirement sale, often genuine and the best buying opportunity; the pre-emptive sale ahead of a known problem, a lease expiry, a licence issue, a road project, which diligence exists to catch; and the tired-of-Thailand discount from expatriate owners, which is real but attaches to businesses whose systems left with the owner's energy. In negotiation, Thai sellers may prioritise face, pace and discretion over squeezing the last baht, and buyers who conduct diligence respectfully learn more than those who arrive with forensic theatrics. Structure protects where charm cannot: staged payments, holdbacks against identified risks, warranties from the individuals behind the company and not just the shell, and a handover period with the seller contractually present. Asia Global Partners runs acquisition support end to end for clients, counsel, accountants, licence checks and the quiet local enquiries that never appear in a data room, and the cheapest deals we have been involved in are several we advised clients not to complete.

This briefing is general information, not legal, tax or investment advice. Thai rules change frequently and individual cases differ. Verify current requirements with the relevant authorities, including the Immigration Bureau, the Board of Investment, the Land Department, the Department of Business Development and the Revenue Department, and take advice on your own facts before acting.