A promotion protects the company. It does not protect you from each other.
Most guidance on investment promotion is written for a single foreign parent establishing a subsidiary. That is not what most manufacturing and technology ventures entering Thailand actually look like.
They look like two, three or four foreign founders — often from different countries, often with one contributing technology and the others contributing capital — who have agreed the business and not yet agreed the cap table.
This guide covers only that: the shareholding and governance decisions that a multi-founder promoted venture has to settle, and which of them become irreversible.
For incentive tiers, eligible activities and the filing steps themselves, see our foreign investor guide, which covers them in full — this page does not restate them.
General information only, not advice on a specific matter. Eligibility, capital requirements and incentive terms are set by policy and change — confirm the current position for your project.
1. What a promotion covers, and what it leaves entirely to you
It concerns: the promoted entity and the activity it carries on, who may own it, and the benefits attaching to that activity.
It says nothing about:
- How founders divide control between themselves
- What happens if one founder stops funding
- Who keeps the technology if the venture ends
- Whether a founder can sell to a competitor
- How a deadlock between two equal founders is broken
- What a departing founder is owed, and how it is valued
If you have not written these down, the default position applies. It is almost never what any of you assumed, and it is the position you will be arguing from at the worst possible moment.
2. The questions the timetable forces you to answer
The process itself will extract decisions from you, whether or not the founders have discussed them. Better to decide these deliberately, three weeks earlier, than under filing pressure:
Shareholding. Who holds what, and does it reflect cash, technology, or future work? A founder contributing know-how and a founder contributing cash are contributing different things on different timelines, and equal shares often stop feeling fair to somebody within eighteen months.
Deadlock. Two founders at 50/50 is not a governance structure; it is a coin flip you have not yet had to make. Decide the mechanism now — casting vote, an independent director, a buy-sell provision, or an agreed escalation.
Capital calls. What happens when a founder cannot fund? Whether the others may fund and dilute, on what valuation, with what cure period, and whether the defaulter loses rights beyond economics.
Transfer and exit. Pre-emption rights, tag and drag provisions, what happens on death or incapacity, and whether a founder may sell to a competitor.
Who signs. Directors take on real personal exposure. Decide who carries it, which decisions need the others' consent, how a director is replaced, and what indemnity the company gives.
Technology. Dealt with separately below, because it is where the most money is lost.
3. Technology and know-how: two questions, not one
Founders routinely conflate these, and they are entirely distinct:
- What does the technology contributor get in the cap table?
- Who legally owns the technology?
It is common to assume that contributing know-how to a venture transfers it to the venture. It does not, by itself.
- If the company should own it, that requires an assignment, on defined terms
- If the founder retains it and the company uses it, that requires a licence, with terms covering scope, exclusivity, territory and — critically — what happens on exit
- If neither document exists, you have a venture whose core asset has undefined ownership
For advanced-materials, additive-manufacturing and process-technology projects, this matters twice over. Evidence of the technology and process being brought to Thailand tends to be examined, and it matters who owns what is being evidenced. A venture describing technology in its dossier that its founder personally owns, with no licence in place, is describing something it does not have.
Improvements made in Thailand raise the same question again: work done by Thai employees and contractors needs assignment provisions, or the venture's own developments end up outside it. Our trademark and IP ownership guide covers that mechanism.
4. What genuinely cannot be undone
| Decision | Why it locks |
|---|---|
| The activity description | Constrains what the company may do for years; not easily amended |
| Shareholding presented in the application | Difficult to alter without affecting the promotion |
| Ownership of contributed technology | Once the venture has built on it, practically impossible to unwind cleanly |
| Absence of exit and transfer provisions | Cannot be fixed retrospectively — the party who must agree has every reason not to |
| Who was named director | Personal exposure already incurred cannot be reassigned backwards |
5. What we do with a founding team
- Map the commercial deal the founders think they have — usually there are three versions of it in the room
- Identify what the filing will force and by when
- Draft the shareholders' agreement and constitutional documents together, so they do not contradict each other
- Settle the technology position with an assignment or licence before filing
- Allocate the director role and the protections around it
- Then proceed with the application, with the cap table already agreed
Founders sometimes want to reverse steps 3 and 6 to save time. It saves about two weeks and costs considerably more later.
Summary
| Situation | Do this before filing |
|---|---|
| Several foreign founders | Agree the cap table and write it down |
| One founder brings the technology | Decide separately what they get and who owns it |
| 50/50 between two founders | Choose a deadlock mechanism |
| Different funding capacities | Agree what happens on a missed capital call |
| A founder resident abroad | Decide consciously who takes the director exposure |
Promotion is granted to the company. Every dispute we see in these ventures is between the founders, and every one of them was avoidable at the cap-table stage.
We advise foreign founding teams on shareholding, shareholders' agreements and technology contribution alongside the promotion process. Initial consultation is free — call +66 92 254 2045 or send us the details.
This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.