October 29, 2026

Share Option Agreements in Thailand: Legal Considerations for Investors and Business Owners

A Guide to Structuring and Drafting Share Option Agreements under Thai Law

Introduction

A Share Option Agreement is a contractual arrangement granting one party the right, but not the obligation, to purchase or sell shares in a company at an agreed price within a specified period or upon the occurrence of certain events.

In Thailand, Share Option Agreements are commonly used in joint ventures, foreign investments, business acquisitions, and shareholder arrangements. They provide flexibility by allowing investors to secure future ownership rights without immediately transferring shares.

However, drafting an effective Share Option Agreement requires careful consideration of Thai corporate law, foreign ownership restrictions, and contractual enforceability.

1. Legal Framework under Thai Law

Thailand does not have specific legislation exclusively governing Share Option Agreements involving private limited companies. Such agreements are generally governed by the principles of contract law under the Thai Civil and Commercial Code (CCC).

Parties are generally free to negotiate the terms of a Share Option Agreement, provided that its objectives and provisions do not violate applicable laws or public policy.

Importantly, a Share Option Agreement does not automatically transfer ownership of shares. The actual transfer must comply with the legal requirements prescribed by the CCC.

Under Section 1129 of the CCC, a transfer of registered shares must be made in writing, signed by both the transferor and transferee, and certified by at least one witness. The transfer must also specify the relevant share numbers. Furthermore, the transfer will not be effective against the company or third parties until it is recorded in the company’s register of shareholders.

2. Types of Share Options

There are two principal types of share options:

Call Option: This grants the option holder the right to purchase shares from an existing shareholder at an agreed price or according to a predetermined pricing mechanism.

Put Option: This grants the option holder the right to require another party to purchase shares under specified circumstances.

For example, foreign investors entering into joint ventures with Thai shareholders may negotiate call options allowing them to acquire additional shares upon satisfaction of agreed conditions and applicable legal requirements.

Similarly, put options may provide an exit mechanism if the business fails to achieve specified objectives.

3. Foreign Ownership Restrictions

Foreign ownership restrictions are among the most important considerations when preparing Share Option Agreements in Thailand.

Under the Foreign Business Act B.E. 2542 (1999) (FBA), a company incorporated in Thailand will generally be considered foreign if foreigners hold at least 50% of its registered capital.

Certain restricted business activities require a Foreign Business Licence, Foreign Business Certificate, or another applicable legal exemption before they may be conducted by a foreign company.

Therefore, a call option allowing a foreign investor to acquire additional shares must be carefully structured to ensure that its exercise does not result in a violation of the FBA or other sector-specific legislation.

Particular caution is required where Thai shareholders hold shares on behalf of foreign investors. Nominee shareholding arrangements designed to circumvent foreign ownership restrictions are prohibited under Thai law.

A Share Option Agreement should not be used as a mechanism to disguise unlawful foreign ownership.

4. Essential Provisions of a Share Option Agreement

A properly drafted Share Option Agreement should clearly address the following matters:

Option Shares: Identify the number, class, and relevant details of the shares subject to the option.

Exercise Price: Specify a fixed purchase price or an objective valuation mechanism, such as an agreed formula or independent valuation.

Exercise Period: Establish when the option may be exercised and the applicable expiration date.

Exercise Procedure: Prescribe how notice must be given, payment arrangements, and the timeline for completing the transfer.

Conditions Precedent: Include necessary regulatory approvals, corporate authorisations, or other contractual requirements.

Representations and Warranties: Require the selling shareholder to confirm ownership of the shares and disclose any pledges, encumbrances, or restrictions.

Default and Remedies: Address the consequences of refusal to transfer shares, breach of contractual obligations, or failure to complete the transaction.

Clear drafting is essential to minimise disputes and facilitate enforcement.

5. Share Transfer Restrictions and Corporate Documents

Before executing a Share Option Agreement, the parties should carefully review the company’s Articles of Association and any existing Shareholders’ Agreement.

These documents may contain restrictions on share transfers, rights of first refusal, or requirements for obtaining corporate or shareholder approvals.

The option should be consistent with these requirements. Where necessary, appropriate amendments or waivers should be obtained.

If the agreement concerns newly issued shares rather than existing shares, additional rules relating to capital increases and the offering of new shares under the CCC must also be considered.

6. Enforcement and Practical Protection

Although a Share Option Agreement may create binding contractual obligations, difficulties can arise if the shareholder granting the option subsequently refuses to execute the required share transfer documents.

Therefore, investors should consider additional contractual protections, including obligations to cooperate with the share transfer, restrictions on disposing of option shares, and appropriate remedies for breach.

Where legally appropriate, the parties may also consider escrow arrangements or other completion safeguards.

However, contractual provisions cannot override mandatory legal requirements or guarantee that a court will order a share transfer in every circumstance.

7. Tax and Stamp Duty Considerations

The exercise of a share option may result in tax obligations depending on the nature of the transaction, the parties involved, and the consideration payable.

Potential issues include personal or corporate income tax arising from share disposals, applicable withholding tax obligations, and stamp duty on share transfer instruments.

Generally, stamp duty on share transfer instruments is calculated at THB 1 for every THB 1,000, or fraction thereof, of the greater of the paid-up share value and the value stated in the instrument.

Tax implications should be reviewed before the option is granted or exercised.

Conclusion

A Share Option Agreement can be an effective legal instrument for structuring investments, protecting shareholders’ interests, and facilitating future changes in company ownership.

However, its effectiveness depends on careful drafting and compliance with Thai law, particularly regarding share transfers, foreign ownership restrictions, and contractual enforcement.

Investors and business owners should obtain appropriate legal advice before entering into a Share Option Agreement to ensure that their commercial objectives can be achieved through a legally compliant and enforceable arrangement.

Disclaimer: This article is intended for general information only and does not constitute legal or tax advice. The application of Thai law depends on the facts and the legislation in force at the relevant time.

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01 / 09

Corporate and Company Formation

6 questions

Q01What is the most common business structure for foreign investors in Thailand?

A Thai private limited company is the most common business structure used by foreign investors in Thailand.

The company will be a separate legal entity from its shareholders. In general, the liability of each shareholder is limited to the unpaid amount, if any, on the shares held by such shareholder.

Other structures such as branch office, representative office, partnership or BOI-promoted company may also be considered depending on the nature of business.

Before setting up the company, the investor should consider foreign ownership restriction, tax, licenses and actual business activities of the company.

Q02How many shareholders are required for a Thai limited company?

A Thai private limited company must have at least two shareholders.

The shareholders can be Thai or foreign individuals or legal entities, subject to foreign ownership restriction under the Foreign Business Act and other specific laws.

Q03Can a foreign investor own 100% of a Thai company?

Yes, depending on the type of business.

Thai company law itself does not generally prohibit 100% foreign ownership. However, the important issue is whether the company can legally operate its intended business under the Foreign Business Act and other specific laws.

Some businesses can be 100% foreign-owned without any Foreign Business License, while some businesses may require a Foreign Business License, Foreign Business Certificate, BOI promotion, or other specific approval or exemption.

Therefore, the business activity should be checked before determining the shareholding structure.

Q04What is the minimum registered capital of a Thai limited company?

Under the company law, there is no substantial minimum registered capital requirement for an ordinary Thai private limited company.

The minimum par value of one share is THB 5. Since a Thai private limited company requires at least two shareholders, and each shareholder must hold at least one share, in theory, the minimum registered capital can be THB 10.

However, in practice, the registered capital should be considered based on the actual business plan and other legal requirements.

For example, higher capital may be required or practically necessary in connection with Foreign Business License, work permits for foreign employees, BOI promotion, specific business licenses, financial requirements of the business, and commercial credibility of the company.

Q05Does a Thai company need to have a Thai director?

Generally, no.

A Thai private limited company is not generally required to have a Thai national as director.

However, some specific businesses or licenses may require Thai directors or impose nationality conditions.

Also, if a foreign director performs work in Thailand, he or she should consider visa and work permit requirements.

Q06Can foreign investors use Thai nominee shareholders?

No.

Foreign investors should not use Thai persons merely as nominee shareholders for the purpose of avoiding foreign ownership restrictions.

Such arrangement may violate the Foreign Business Act.

Where a company has both Thai and foreign shareholders, the Department of Business Development may request documents showing that the Thai shareholders have sufficient financial capacity to invest in the company.

Therefore, the Thai shareholders should be real shareholders who invest their own funds and have genuine rights in the company.

02 / 09

Foreign Business Act

6 questions

Q07What is the Foreign Business Act?

The Foreign Business Act B.E. 2542 (1999), or the “FBA”, is one of the main laws which regulate business activities of foreigners in Thailand.

In general, a Thai company will be considered as a “foreigner” under the FBA if foreigners hold 50% or more of the capital of the company.

The FBA divides restricted businesses into three main lists.

Q08What are List 1, List 2 and List 3 businesses?

In general:

List 1 includes businesses which foreigners are not allowed to operate for special reasons.

List 2 includes businesses relating to national security, culture, arts, traditions, natural resources and some protected businesses.

List 3 includes businesses in which Thai nationals are considered not yet ready to compete with foreign investors.

List 3 is very important for foreign investors because it covers many service businesses and some retail and wholesale activities.

Therefore, foreign investors should not only look at the company objectives registered with the Department of Business Development. The actual business activity must also be reviewed.

Q09Does every foreign-owned company need a Foreign Business License?

No.

A Foreign Business License, or FBL, is required only if the foreign company will conduct a restricted business under the FBA and there is no exemption or other legal route available.

There are many businesses which a 100% foreign-owned company can operate without obtaining a Foreign Business License.

Examples may include holding shares or investments in other companies, where the company only holds investment and does not provide restricted management or other services; export trading, depending on the exact activities; certain trading activities which are not restricted under the FBA; wholesale business where the minimum capital is THB 100 million or more for each wholesale store; and retail business where the total minimum capital is THB 100 million or more, with the required capital for each store.

For wholesale business, List 3 of the FBA restricts wholesale of goods where the minimum capital of each store is lower than THB 100 million. Therefore, a foreign-owned company having at least THB 100 million capital for each wholesale store may operate such wholesale business without obtaining an FBL under this particular restriction.

For retail business, different capital conditions apply, including the total minimum capital and capital requirement for each retail store.

However, the investor should always review the actual activities because a company may conduct more than one activity. For example, a holding company which also provides management, consultancy or other services to its subsidiaries may become subject to the FBA in respect of those service activities.

Q10What is the difference between Foreign Business License and Foreign Business Certificate?

A Foreign Business License is normally granted to a foreign business which receives approval to conduct a restricted activity under the FBA.

A Foreign Business Certificate, or FBC, is generally used where the foreign investor has a legal right or exemption to conduct the business, for example under certain BOI promotion or treaty protection.

The correct route depends on the nature of business, nationality of investor and investment structure.

Q11Can BOI promotion help with foreign ownership restriction?

Yes.

In many cases, a BOI-promoted company may be allowed to have 100% foreign ownership for the promoted business.

If the promoted activity is also restricted under the Foreign Business Act, the company may generally apply for a Foreign Business Certificate instead of applying for a normal Foreign Business License.

BOI promotion may also provide tax and non-tax incentives depending on the promoted activity.

Q12Are US investors treated differently?

In some cases, yes.

Qualified US nationals or US-owned companies may receive protection under the Treaty of Amity and Economic Relations between Thailand and the United States.

Subject to the conditions of the Treaty and excluded businesses, a qualifying US investor may be able to operate certain businesses with majority or 100% US ownership.

However, eligibility requirements should be carefully reviewed before relying on Treaty protection.

03 / 09

Employment and Labour Law

6 questions

Q13What are the main employment laws in Thailand?

Employment relationships in Thailand are mainly governed by the Labour Protection Act and other laws relating to labour relations, social security, workmen’s compensation and employment of foreigners.

Thai labour law provides minimum legal protection to employees.

An employment agreement cannot normally reduce employee rights below the minimum rights provided by law.

Q14Is a written employment agreement required?

No. An employment agreement is not required to be made in writing under Thai law and an employment relationship may also be created by verbal agreement.

However, it is highly recommended to have a written employment agreement in order to clearly specify the rights and obligations of the employer and employee and reduce possible dispute in the future.

The written employment agreement should normally cover matters such as position and duties, salary and benefits, probation, working hours, leave, confidentiality, intellectual property, termination, company rules, and post-employment restriction, if appropriate.

Some employee rights will apply by law even if they are not written in the employment agreement.

Q15What are normal working hours and overtime requirements in Thailand?

For most businesses, normal working hours should generally not exceed eight hours per day and 48 hours per week.

Different requirements may apply to hazardous work.

An employer may request an employee to work additional hours subject to the requirements under the labour law, including employee consent where required.

If an employee works overtime on a normal working day, the employer generally must pay overtime compensation at not less than 1.5 times the employee’s normal hourly wage.

Different rates apply where an employee is required to work on a holiday. Depending on whether the employee is already entitled to wages for the holiday, additional holiday pay may generally be at least one or two times the normal hourly wage. If the employee works overtime on a holiday, the overtime payment is generally at least three times the normal hourly wage.

There are certain categories of employees and work which may be subject to different overtime rules or exclusions.

Q16How much annual leave must an employee receive?

An employee who has worked continuously for one year is generally entitled to at least six working days of paid annual leave per year.

However, this does not mean that an employee cannot take annual leave during his or her first working year.

For an employee who has worked for less than one year, the employer may provide annual leave on a pro rata basis. The employer may also provide such entitlement under the employment agreement or working regulations of the company.

The employer may provide annual leave which is more favourable than the statutory minimum.

Q17Is severance pay required when terminating an employee?

Normally, statutory severance pay may be required when the employer terminates an employee.

The amount depends mainly on the employee’s length of service.

There are some cases where severance payment may not be required, especially where the employee has committed serious misconduct under the law.

Before terminating an employee, the employer should also consider advance notice, payment in lieu of notice, unused annual leave, contractual benefits, and possible unfair termination claim.

Therefore, termination should normally be reviewed before the employer issues the termination letter.

Q18Is there a minimum wage in Thailand?

Yes.

Thailand has statutory minimum wage requirements.

The applicable minimum wage may depend on the province, location and sometimes the type of business.

The minimum wage rate may also be changed from time to time. Therefore, the company should check the applicable rate before hiring employees.

04 / 09

Business Visa and Work Permit

8 questions

Q19Does a foreign investor need a visa to conduct business in Thailand?

Yes. A foreigner who wishes to enter and stay in Thailand for business or employment purposes must have an appropriate visa according to the purpose of entering Thailand.

The most common visa for foreign investors, directors and employees is the Non-Immigrant Visa Category “B”, commonly called a Business Visa or Non-B Visa.

A Non-B Visa may be issued for business or employment purposes depending on the purpose and supporting documents.

However, having a Business Visa does not by itself give the foreigner permission to work in Thailand.

Q20What is the difference between a Business Visa and a Work Permit?

A visa and a work permit are different.

A visa relates mainly to the foreigner’s right to enter and stay in Thailand for the permitted purpose.

A work permit relates to the foreigner’s right to perform work in Thailand.

Therefore, if a foreign director, shareholder or employee actually works in Thailand, having only a Non-B Visa is generally not sufficient. The foreigner must also obtain a work permit or other lawful authorization to work, unless an exemption applies.

Q21Can a foreign shareholder or director work in his or her own Thai company without a Work Permit?

Not automatically.

Being a shareholder or director of a Thai company does not automatically give the foreign person a right to work in Thailand.

If the foreign shareholder or director actually performs work or duties in Thailand, a work permit or other applicable work authorization will normally be required.

For this reason, a foreign investor should consider the visa and work permit structure at the same time when setting up the company.

Q22What are the basic requirements for obtaining a Work Permit?

The requirements depend on the type of company, position of the foreign employee, business activities and applicable investment privileges.

For a normal Thai company, the authorities will normally consider documents and information relating to matters such as legal status of the employing company, registered and paid-up capital, business activities of the company, number of Thai and foreign employees, position and duties of the foreign employee, qualifications and experience of the foreign employee, employment agreement and salary, and tax and other company documents.

The exact requirements should be checked for each applicant because they may be different depending on the circumstances.

Q23Is THB 2 million registered capital always required for one foreign Work Permit?

The THB 2 million capital per foreign employee is commonly used as one of the requirements in a normal work permit and immigration structure.

However, it should not be understood as an absolute company-law rule applying to every foreign employee.

The requirements may be different depending on several factors, such as BOI promotion, nationality of the foreign employee, type of employer, nature of business, applicable treaty or special law, and other exemptions or privileges.

Therefore, the capital and employment structure should be checked before applying for the visa and work permit.

Q24Is there a requirement to employ Thai employees for a foreign Work Permit?

For a normal non-BOI company, the number of Thai employees is an important factor for visa extension and work permit arrangements.

A commonly applied requirement is a ratio of Thai employees to foreign employees. However, the applicable requirements may be different depending on the type of company, circumstances and any special privileges.

BOI-promoted companies may be subject to different requirements for foreign specialists and executives.

Therefore, the investor should not assume that the same employee ratio applies to every company.

Q25How long can a foreign employee stay in Thailand under a Non-B Visa?

A Non-Immigrant B Visa and the permission to stay in Thailand are not exactly the same matter.

A foreigner may initially receive permission to stay for a limited period after entering Thailand. If the foreigner will continue employment in Thailand, an extension of stay may normally be applied for subject to the applicable immigration requirements.

The company and foreign employee should therefore monitor both the validity of the visa or permission to stay and the validity of the work permit or work authorization.

Q26Are the visa and Work Permit requirements different for BOI companies?

Yes.

BOI-promoted companies may receive privileges concerning the entry and employment of foreign specialists, technicians and executives.

The procedures and requirements may be different from those applying to an ordinary non-BOI company.

For a business which expects to employ several foreign specialists or executives, this can be one of the important factors to consider when deciding whether BOI promotion is suitable for the investment project.

05 / 09

Tax

6 questions

Q27What is the corporate income tax rate in Thailand?

The standard corporate income tax rate in Thailand is generally 20% of net taxable profit.

Certain SMEs may be entitled to reduced rates.

BOI-promoted companies may also receive corporate income tax exemption or reduction for certain periods depending on the promoted project.

Q28What is the VAT rate in Thailand?

The current general VAT rate is 7%.

A business which provides taxable goods or services in Thailand is generally required to register for VAT if its annual taxable turnover exceeds THB 1.8 million, subject to certain exemptions.

Some transactions may be zero-rated or exempt from VAT.

Q29What other taxes should a foreign investor consider?

Depending on the business, the investor may need to consider withholding tax, personal income tax, Specific Business Tax, stamp duty, customs duties, land and building tax, and taxes on dividends, interest, royalties and overseas payments.

Tax structure should be reviewed especially where the Thai company will make payments to an overseas parent company or affiliated companies.

Q30Are payments from Thailand to overseas companies subject to withholding tax?

Some payments may be subject to Thai withholding tax.

Examples include dividends, interest, royalties, service fees and some other types of income.

The withholding tax rate will depend on the type of payment, Thai tax law and whether a Double Taxation Agreement applies.

Q31Does Thailand have Double Taxation Agreements?

Yes.

Thailand has entered into Double Taxation Agreements with many countries.

A treaty may reduce certain withholding taxes or affect how income is taxed between Thailand and another country.

However, treaty benefit should be reviewed based on each transaction.

Q32Does Thailand have transfer pricing rules?

Yes.

Transactions between related companies should generally be made on an arm’s-length basis.

This may be relevant to management fees, royalties, intercompany loans, purchase and sale of goods, service fees and other transactions between related companies.

Transfer pricing documentation and disclosure requirements may also apply.

06 / 09

Business Licenses and Regulatory Approvals

4 questions

Q33Is company registration enough to start business in Thailand?

Not always.

Registration of a company with the Department of Business Development only establishes the legal entity.

It does not mean that the company can automatically operate every type of business.

Some businesses require additional licenses, approvals or registrations before starting operation.

Q34What businesses may require additional licenses?

Examples include businesses relating to factories, food and beverage, pharmaceuticals, medical devices, cosmetics, hotels, tourism, transportation, telecommunications, finance, insurance, education, recruitment, import and export of controlled goods, hazardous substances, energy, and certain professional services.

Some businesses may require approvals from more than one government authority.

Q35Does a manufacturing company need a factory license?

It depends on the type and scale of manufacturing activity.

The company should consider machinery, production capacity, factory size and nature of the operation under the applicable factory law.

Some factories may require a factory license, while other factories may only require notification or may be subject to other requirements.

The investor should also check environmental requirements, building permit, zoning, health and safety, industrial estate regulations and other local requirements.

It is recommended to check these matters before signing a long-term factory lease or purchasing land.

Q36Does an importer or exporter need a license?

Ordinary import and export activities are generally subject to customs registration and procedures.

However, some products require specific licenses or approvals.

Examples include food, pharmaceuticals, medical devices, cosmetics, chemicals, agricultural products and other controlled products.

Therefore, the product should be reviewed before the company starts importation into Thailand.

07 / 09

Industrial Estate Authority of Thailand (IEAT)

3 questions

Q37What is IEAT and why is it relevant to foreign investors?

The Industrial Estate Authority of Thailand, or IEAT, is a government authority responsible for development and supervision of industrial estates in Thailand.

For manufacturing and certain industrial businesses, locating a factory or business inside an industrial estate under IEAT may provide practical and legal benefits.

Depending on the type of industrial estate, business and applicable conditions, benefits may include developed infrastructure and utility systems, assistance with certain licenses and regulatory approvals, permission for a foreign-owned business to own land inside an industrial estate for its approved business operation, facilities relating to bringing foreign experts, technicians and their dependents into Thailand, permission concerning remittance of foreign currency abroad, and certain customs and tax privileges for businesses operating in an IEAT Free Zone.

A foreign investor should distinguish between IEAT privileges and BOI privileges. They are separate investment regimes, although a company located in an industrial estate may, where qualified, receive benefits from both IEAT and BOI.

Q38Can a foreign-owned company own land in an industrial estate?

Potentially, yes.

One important IEAT privilege is that an industrial or commercial operator may be permitted to own land in an industrial estate for its approved business even where the operator is a foreign-owned company.

This is an important exception to the general restrictions on land ownership by foreigners in Thailand.

However, the land must be used in accordance with the approved business and IEAT requirements. The investor should therefore confirm the land ownership privilege and applicable conditions before acquiring the land.

Q39What is an IEAT Free Zone?

An IEAT Free Zone is an area within an industrial estate where qualifying businesses may receive customs and tax privileges relating principally to imported machinery, raw materials and goods used for production or export, subject to applicable law and IEAT conditions.

A Free Zone may be particularly useful for manufacturing businesses which import raw materials or components and manufacture products for export.

However, the tax and customs benefits depend on the particular business, movement of goods and applicable conditions and should be reviewed before the investment structure is finalized.

08 / 09

BOI Promotion

2 questions

Q40What is BOI promotion?

The Thailand Board of Investment, or BOI, provides investment promotion to eligible projects.

Depending on the type of project, BOI incentives may include both tax and non-tax benefits.

Possible tax benefits include corporate income tax exemption or reduction, import duty exemption or reduction on machinery, exemption relating to raw materials used for export, and other tax incentives.

Possible non-tax benefits may include permission for 100% foreign ownership in some promoted businesses, permission to own land for approved activities subject to conditions, easier procedures for foreign specialists and executives, and other investment privileges.

However, BOI promotion is granted to a specific project and the company must comply with BOI conditions.

Q41Does every foreign investor need BOI promotion?

No.

Many companies can operate business in Thailand without BOI promotion.

Whether BOI promotion is useful depends on the business activity, investment amount, technology, location, foreign ownership, number of employees, project structure and available incentives.

The investor should normally compare BOI structure with ordinary company structure, Foreign Business License structure and, where relevant, IEAT privileges before making a decision.

09 / 09

Before Making Investment in Thailand

1 questions

Q42What should a foreign investor check before establishing business in Thailand?

Before making investment, the investor should review at least the following matters:

1. Business activities – clearly identify what the Thai company will actually do. 2. Foreign ownership restriction – check whether the business is restricted under the Foreign Business Act or another specific law. 3. Company structure – consider shareholders, directors, registered capital and decision-making structure. 4. BOI and IEAT – check whether the project may qualify for BOI promotion or whether locating the business in an industrial estate may provide benefits. 5. Business licenses – identify all licenses and approvals which are required before starting operation. 6. Employment – consider Thai employees, employment agreements and labour law requirements. 7. Visa and Work Permit – consider visa, work authorization and requirements for foreign directors, executives and employees. 8. Tax – review corporate tax, VAT, withholding tax, transfer pricing and cross-border payments. 9. Office, factory and land – check lease, land ownership, zoning, factory and building requirements. 10. Intellectual property – consider registration and protection of trademarks, patents, copyright and technology. 11. Commercial agreements – review shareholders’ agreements, customer contracts, supplier agreements, distribution agreements and other important contracts.

Many legal problems happen because the investor establishes the company first and only later checks whether the proposed business can legally be operated by that company.

For this reason, it is normally better to review the legal structure before the investment is made.

Disclaimer

This FAQ is prepared for general information only. It is not legal or tax advice. The applicable law, regulation and government practice may change and the requirements may be different depending on the facts and circumstances of each investment.