Registered Capital of a Thai Limited Company: What It Is, Whether the Money Must Be Real, the Minimum, and How It Differs from Paid-Up Capital

Last updated 12 November 2026 · Legal status: in force · Statutory texts checked against the legal database of the Office of the Council of State and judgments checked in the Supreme Court’s system

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What is registered capital? Share capital stated in the memorandum of association, divided into shares of equal value

Registered capital is the amount of share capital that the promoters state in the memorandum of association under Section 1098(5), divided into shares of equal value under Section 1096, with each share worth not less than five baht under Section 1117. It is a legal figure that shows how much the shareholders have undertaken to put into the company.

The Civil and Commercial Code defines a limited company by its capital structure. Section 1096 provides that a limited company is a company “formed with its capital divided into shares of equal value, the liability of each shareholder being limited to the amount, if any, remaining unpaid on the shares held by that shareholder.”^[1] The definition has two parts that must be read together. First, the capital must be divided into shares of equal value. Second, each shareholder’s liability is tied to the share money that has not yet been paid. Registered capital is therefore more than a figure on the company certificate; it is the basis of the limited liability that distinguishes a limited company from an ordinary partnership.

The promoters must fix the capital at the very first stage of forming the company. Section 1097 allows two or more persons to promote a company by subscribing their names to a memorandum of association, and Section 1098 lists the particulars the memorandum must contain; item (5) is “the amount of share capital with which the company proposes to be registered, divided into shares of a fixed value of so much each.”^[2] For example, registered capital of THB 1,000,000 may be divided into 10,000 shares of THB 100 each or into 200,000 shares of THB 5 each, because Section 1117 only prohibits the value of a share from being less than five baht.^[3]

Once registered, the capital binds the company as part of the memorandum of association. Section 1145 prohibits any alteration of the memorandum except by a special resolution.^[12] A change in the amount of capital must therefore go through the procedure for increasing or reducing capital under Sections 1220 to 1228, explained in the section on increases and reductions below. Readers preparing to register a company can find the full sequence of steps in Company registration in Thailand: steps, documents, and costs, and the basics of a limited company in the Thai article What is a limited company? (Thai).

How does registered capital differ from paid-up capital? At least twenty-five per cent of each share before registration

Paid-up capital is the part of the share price that shareholders have actually paid to the company. The law requires the first payment to be at least twenty-five per cent of the value of each share under Section 1105, paragraph three, and Section 1110, paragraph two, and the directors may apply to register the company only once that money has been paid under Section 1111.

Section 1105, paragraph three, provides that “the first payment on shares must not be less than twenty-five per cent of the stated value of the shares,”^[3] and Section 1110, paragraph two, sets out the directors’ duty: once they have taken over the business from the promoters, they must “call upon the promoters and subscribers to pay, on shares to be paid in money, not less than twenty-five per cent of each share.”^[4] The twenty-five per cent threshold applies share by share, not to the capital as a whole. Each shareholder must therefore pay at least one-quarter on his or her own shares; one shareholder cannot pay in full on behalf of another who pays nothing.

Section 1111 links payment for shares to registration. It provides that “when the money referred to in Section 1110 has been paid, the directors must apply for registration of the company,” and that the application must state “(3) the amount paid up on each share; (4) the total amount received as payment for shares.”^[4] The paid-up capital shown on the company certificate is therefore a statement that the directors certify to the registrar: that the company has actually received the money.

The table shows that registered capital and paid-up capital are two different figures, and that the difference between them is share money the shareholders still owe the company. If the company’s liabilities exceed its assets, this difference is the money the shareholders may be called upon to pay. A shareholder whose shares are fully paid is not liable for the company’s debts beyond that. This is the practical meaning of limited liability under Section 1096.

What is the minimum registered capital in Thailand? No general minimum, but minimums under specific laws

The Civil and Commercial Code sets no minimum registered capital for an ordinary limited company. Its only limits are that there must be at least two promoters under Section 1097 and that each share must be worth at least five baht under Section 1117. Minimum capital amounts come from specific laws, such as Section 14 of the Foreign Business Act B.E. 2542 (1999).

In theory, two promoters each holding one share of five baht could register a company with capital of only ten baht. Such a figure does not reflect a real business, because paid-up capital is the starting money the company can spend and is the figure that banks, business partners, and government agencies see on the company certificate. Capital set below the business’s actual funding needs forces the company to borrow from its directors or shareholders from the outset, which can raise accounting and tax issues.

For companies with foreign shareholders, the key specific law is the Foreign Business Act B.E. 2542 (1999). Section 14 provides that the minimum capital a foreigner uses to commence business in Thailand “must be not less than two million baht,” and, for a business that requires a licence under the lists annexed to the Act, “must be not less than three million baht.”^[11] A company with foreign shareholders should therefore check its status under the Act’s definition of a foreigner before fixing its capital. Shareholding limits, licences, and investment promotion privileges are discussed in Foreign investment and BOI privileges. In addition, some regulated businesses may have to meet minimum capital or financial requirements as a condition of their licence, which must be checked under the law governing each business.

Does registered capital have to be real money? Section 1119 bars set-off, and bank evidence is required above THB 5 million

Yes, for the part declared as paid. Section 1119 requires every share to be paid up in full in money, except shares issued for work or property under Section 1108(5) or Section 1221, and a shareholder may not set off debts against the company when paying for shares. Where capital exceeds THB 5 million, bank documents confirming receipt of the money are required under Order of the Central Partnership and Company Registration Office No. 1/2567.

Section 1119 has two paragraphs. The first provides that “every share must be paid up in full in money, except shares issued under Section 1108(5) or Section 1221.” The second provides that “in paying for shares, a shareholder may not set off any debt against the company.”^[5] The first paragraph closes the door to paying for shares with anything other than money unless this is approved at the statutory meeting or by special resolution. The second closes the door to a shareholder claiming that the company owes him or her money, for example expenses a director advanced on the company’s behalf, and deducting it from the share money due. The reason is that share money is an asset on which all the company’s creditors rely. If shareholders could set off their claims, they would be paid ahead of other creditors without going through any order of priority.

The Department of Business Development has added evidentiary checks for companies with large capital. Order of the Central Partnership and Company Registration Office No. 1/2567, dated 23 May 2024, in force from 1 July 2024, which revoked Order No. 1/2566, provides that on the formation of a company with registered capital exceeding THB 5 million paid in money, the application must be accompanied by a document issued by a bank certifying that one of the directors has received the share money paid, together with a confirmation from the applying director that this amount is share money. If those documents cannot be filed with the application because all directors are foreign nationals, or because the business is promoted or licensed by an investment-promotion agency such as the Board of Investment or the Industrial Estate Authority of Thailand, a letter of explanation is filed instead, and a bank document showing that the company has received the share money, with the company’s confirmation, must be submitted within 15 days of the date on which the registrar orders the registration accepted. Where shares are paid in property, the owner confirms in writing that the property will be transferred to the company and describes it, attaching a copy of the title document for registered property; where shares are paid in work, a written confirmation is filed with supporting evidence such as a copy of the employment contract. A capital increase that brings existing and new registered capital together above THB 5 million requires a bank document showing that the company has received the money for the increase, with the company’s confirmation, filed with the application; the order does not allow a letter of explanation in place of those documents for a capital increase. If a company that filed a letter of explanation does not submit the documents within 15 days, the registrar annotates its company certificate with a note that the company has not submitted evidence confirming receipt of payment for shares in line with its registered capital, and removes the note once the documents are submitted or capital is reduced to no more than THB 5 million.^[6]

Declaring capital as paid when no money has been paid is not merely a paperwork problem. Section 42 of the Act Prescribing Offences Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations, and Foundations B.E. 2499 (1956) punishes a person responsible for the operation of a company who makes a false entry, or omits an essential entry, in the company’s accounts or documents in order to deceive the company or its shareholders so as to deprive them of a benefit to which they are entitled, with imprisonment of up to seven years, a fine of up to THB 140,000, or both. Section 48 makes it a pinai (administrative fine) offence, with a fine of up to THB 50,000, to fix dishonestly the value of work or property contributed in lieu of money for shares at more than its true value.^[7] Directors who certify the paid-up capital should therefore keep evidence of receipt of every payment for shares in the company’s books. Directors’ criminal liability in other situations is explained in Criminal liability of company directors in Thailand.

Unpaid share money: calls, interest, forfeiture, and the liability of a transferor

Share money that has not been paid is a debt the shareholder owes the company. The directors may call for it at any time by registered letter on at least twenty-one days’ notice under Sections 1120 and 1121. A shareholder who does not pay must pay interest and may have the shares forfeited and sold at auction under Sections 1122 to 1125, and the Supreme Court allows the company to sue for any shortfall.

Section 1120 empowers the directors: “The directors may call on the shareholders at any time to pay the amounts still unpaid on their shares, unless the general meeting has decided otherwise.” Section 1121 prescribes how a call is made: notice must be given “at least twenty-one days in advance by registered letter.”^[5] In Supreme Court Judgment No. 5276/2538, the Court held that once the first instalment has been paid, the directors may call the outstanding balance in full or in instalments at any time while the company exists, and that a company suing a shareholder for the THB 75 per share still owed was not exercising its rights in bad faith.^[9] This matters for shareholders who assume that unpaid capital is merely a figure that no one will ever call.

If a shareholder does not pay by the day fixed, Section 1122 requires that shareholder to pay interest from the day fixed for payment until the day of actual payment. Section 1123 then allows the directors to send a further notice by registered letter, fixing a reasonable period, and the notice “may also state that, if the amount called is not paid, the shares may be forfeited.” Once the notice contains a statement about forfeiture, Section 1124 allows the directors to forfeit the shares at any time while the money remains unpaid, and Section 1125 requires forfeited shares to be sold by auction without delay, with the proceeds applied to the amount called and interest and any surplus returned to the former shareholder.^[8]

The Supreme Court has settled two points that make this mechanism work in practice. First, in Supreme Court Judgment No. 4003/2559, the Court held that where a shareholder failed to pay the remaining seventy-five per cent called by the directors, the company could forfeit the shares without waiting for a general meeting to decide, because the law does not give a shareholder the right to demand a meeting before paying. Second, in Supreme Court Judgment No. 2837/2537, the Court held that where the company forfeited the shares and the auction raised less than the amount outstanding, the company could sue the subscriber for the shortfall as an ordinary debt, because a subscription for shares binds the subscriber to pay the company under Section 1106.^[9] Forfeiture is therefore not a way for a shareholder to escape the debt.

Transferring partly paid shares does not immediately release the transferor either. Section 1133 provides that the transferor “remains liable for the amount not yet paid,” but is not liable for debts of the company incurred after the transfer, is not liable to contribute unless the current shareholders are unable to pay, and may not be sued after two years from the entry of the transfer in the register of shareholders.^[10] Supreme Court Judgment No. 2531/2538 explains that liability under Section 1133 is liability towards the creditors of the company in which the transferor held shares, not liability to the company for share money on shares that have been transferred where the transfer can be set up against the company.^[9] A buyer of existing shares should therefore check whether the shares are fully paid, because the transferee becomes the shareholder who owes the unpaid balance.

Increasing and reducing registered capital: special resolutions, existing shareholders’ rights, and creditor protection

Capital is increased by issuing new shares by special resolution under Section 1220, and new shares must be offered to existing shareholders in proportion to their holdings under Section 1222. Capital is reduced by special resolution under Section 1224, but not below one-fourth of the capital, and creditors must be given thirty days to object. In both cases the resolution must be registered within fourteen days under Section 1228.

A special resolution is one passed by a majority of not less than three-fourths of the total votes of the shareholders present and entitled to vote, under Section 1194. An increase of capital under Section 1220 requires a resolution of this kind. Issuing new shares to be paid otherwise than in money requires a further special resolution under Section 1221, and Section 1222 requires new shares to be offered to existing shareholders “in proportion to the shares they hold” by written notice stating the number of shares and the date on which the offer expires. Only after that date has passed, or a shareholder has declined, may the directors sell the shares to other shareholders or buy them themselves.^[12] This pre-emption right prevents a majority from using a capital increase to dilute the minority. The procedure for calling meetings and passing resolutions is explained in Extraordinary general meetings and board resolutions.

A reduction of capital affects creditors directly because it reduces the money on which they rely, so the law imposes more conditions. Section 1224 permits a reduction by lowering the value of each share or reducing the number of shares by special resolution. Section 1225 prohibits reducing capital “below one-fourth of the total capital.” Section 1226 requires the company to advertise at least once in a local newspaper and to send written notice to every creditor known to it, asking for any objection within thirty days; if a creditor objects, the company may not reduce its capital until it has paid the debt or given security for it. Under Section 1227, shareholders who received money back on the reduction remain liable, up to the amount returned, to a creditor who did not know of the reduction through no fault of his or her own, for two years from the registration of the reduction.^[13]

Supreme Court Judgment No. 1509/2566 shows that a reduction must also be fair to all shareholders. In that case the company reduced its capital by reducing the number of shares in order to write off accumulated losses, which the Court accepted as permissible. However, some shares had been paid up in full at THB 25 while the shares of one shareholder had been paid up only to THB 6.25, so reducing the number of shares released that shareholder from paying the unpaid balance on the cancelled shares. The Supreme Court held that the shareholder had a special interest and was barred from voting under Section 1185. Without that shareholder’s votes the resolution did not reach three-fourths, so the Court revoked the reduction resolution and the related increase resolution, and indicated that before reducing capital by reducing the number of shares, the company must first require shareholders whose shares are not fully paid to pay them up in full.^[9]

Comparative law: minimum capital and payment for shares in England and Germany

England sets a minimum capital only for public companies and requires shares in such companies to be paid up at least as to one-quarter of their nominal value. Germany sets a minimum capital of EUR 25,000 for a GmbH and requires one-quarter of the nominal value of each share to be paid before registration is applied for. Thailand applies the same one-quarter rule but sets no general minimum capital.

In England, section 586(1) of the Companies Act 2006 provides that a public company must not allot a share except as paid up at least as to one-quarter of its nominal value and the whole of any premium, and section 763(1) sets the authorised minimum of a public company’s allotted share capital at £50,000. Both provisions apply to public companies.^[14] A Thai limited company under the Civil and Commercial Code resembles an English private company in that it may not offer shares to the public (Section 1102 of the Code; section 755 of the Companies Act 2006),^[1] yet Thailand applies the one-quarter payment rule to every limited company.

In Germany, § 5(1) of the Act on Limited Liability Companies (GmbHG) provides that the share capital (Stammkapital) must be at least EUR 25,000, and § 7(2) prohibits an application for registration until one-quarter of the nominal value of each share (Geschäftsanteil) not agreed to be paid in kind has been paid, with an additional minimum for the total paid in.^[15] Thailand therefore uses the same share-by-share twenty-five per cent rule as Germany but sets no minimum capital. Thai creditor protection relies on other mechanisms instead of an amount of capital: the bar on set-off under Section 1119, the reduction procedure under Sections 1224 to 1227, and the bank evidence required by Order of the Central Partnership and Company Registration Office No. 1/2567.

Registered capital in law and economics and related disciplines

In law and economics, registered capital is a tool for allocating risk between shareholders and creditors. Limited liability shifts part of the risk of the business to creditors, and legal capital rules try to ensure that shareholders have actually put money in first. Scholars have questioned how far fixed minimum capital in fact protects creditors.

Frank Easterbrook and Daniel Fischel explain that limited liability reduces the cost of monitoring managers and other shareholders and promotes the free transfer of shares, while shifting some risk to creditors; voluntary creditors receive compensation in advance for that risk, for example through interest rates or security.^[16] Michael Jensen and William Meckling analyse the agency costs of debt: when the owner-manager of a heavily indebted firm has little of his own money in it, he has an incentive to choose high-risk projects, because if they turn out well he captures most of the gains, and if they turn out badly the creditors bear most of the costs.^[16] In this framework, paid-up capital is the shareholders’ own stake that reduces that incentive. The Thai twenty-five per cent rule and the bar on set-off in Section 1119 serve to ensure that the stake actually exists, rather than existing only on paper.

John Armour, however, asks whether legal capital is an outdated concept and concludes that it is no longer an appropriate means of safeguarding creditors’ interests, most clearly where the rules are mandatory: creditors able to bargain, such as banks, protect themselves through contract terms tailored to each borrower’s risk, while creditors who cannot bargain, such as tort victims, call for targeted protective rules. Peter Mülbert and Max Birke, approaching the question from the other side, examine whether there is a case against the European legal capital rules, which have long been among the cornerstones of company law in the European Union.^[16] This debate helps explain Thailand’s choice. Thailand sets no general minimum capital, which is consistent with Armour’s critique, but keeps the rules on the reality of capital: payment in money, the bar on set-off, bank evidence, and a reduction procedure that allows creditors to object.

From a finance and accounting perspective, registered capital is also a signal to business partners. High paid-up capital shows that the shareholders bear risk first, but the signal means something only if it can be verified. High registered capital of which only twenty-five per cent has been paid says little about the company’s financial position. Anyone assessing a business partner should therefore read the paid-up capital together with the financial statements filed with the Department of Business Development, not the registered capital alone.

How much registered capital should a Thai company have? Points to consider before fixing capital in the memorandum

The right amount of registered capital depends on any minimum capital required by specific laws or by contracting parties, the money the shareholders are actually ready to pay, the liability the shareholders can accept, and the documentary requirements that apply once capital exceeds THB 5 million. Capital set higher than the money actually available leaves the shareholders owing unpaid share money; it does not necessarily make the company more credible.

1. Minimum capital under specific laws. If there are foreign shareholders, check Section 14 of the Foreign Business Act and the licensing law for the business before fixing the figure.
2. The business’s actual funding needs. Estimate the costs before revenue starts, such as rent, salaries, and stock, and set enough paid-up capital to cover them instead of relying on loans from directors.
3. Shareholders’ liability. The unpaid part is a debt that the shareholders may be called on to pay under Section 1120, with the risk of forfeiture under Section 1124. Shareholders who do not intend to pay in full should not set high capital for appearances.
4. Shareholding proportions and voting power. The number of shares determines voting power on special resolutions requiring three-fourths. A shareholder who wants to be able to block a special resolution must hold more than one-fourth of the votes present at the meeting.
5. Documents and bank evidence. Capital above THB 5 million requires bank documents filed with the application under Order of the Central Partnership and Company Registration Office No. 1/2567; the 15-day period after registration applies only to a formation, or an amalgamation into a new company, in which a letter of explanation is filed instead. If a later capital increase is planned, prepare the bank documents before filing.
6. Plans for future increases. An increase requires a special resolution, a pro rata offer, and registration within fourteen days. Starting with adequate capital and increasing it when needed is usually simpler than reducing capital later, which requires notice to creditors and a waiting period for objections.

Tax issues relating to capital, such as borrowing from directors instead of increasing capital or tax on dividends, are outside the scope of this article; further reading is available on eksiamtax.com (Thai). Dissolving a company and returning capital to shareholders when the business closes are covered in Closing a company in Thailand: dissolution and liquidation.

Frequently asked questions about registered capital in Thailand

The answers below summarize Sections 1096 to 1125 and 1220 to 1228 of the Civil and Commercial Code, Section 14 of the Foreign Business Act, Order of the Central Partnership and Company Registration Office No. 1/2567, and the Supreme Court judgments cited in this article.

What is registered capital?

Registered capital is the amount of share capital that a company states in its memorandum of association under Section 1098(5) of the Civil and Commercial Code, divided into shares of equal value under Section 1096, with each share worth not less than five baht under Section 1117. It is the ceiling that the shareholders undertake to pay to the company and it defines the extent of their liability for the company’s debts. It is not an amount the company must keep in its bank account at all times.

Does registered capital have to be real money?

Yes, for the part declared as paid. Section 1119 requires shares to be paid up in full in money, except shares issued for work or property under Section 1108(5) or Section 1221, and prohibits shareholders from setting off debts against the company. The unpaid part remains a debt the shareholders owe the company. Where capital exceeds THB 5 million, Central Partnership and Company Registration Office Order No. 1/2567 requires bank documents confirming receipt of the money to be filed with the registration application. The 15-day period after registration applies only to a formation, or an amalgamation into a new company, in which a letter of explanation is filed instead because all directors are foreign nationals or the business is promoted or licensed by an investment-promotion agency such as the BOI or the IEAT. Making false entries in company documents to deceive shareholders is punishable under Section 42 of the Act Prescribing Offences Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations, and Foundations B.E. 2499.

What is the minimum registered capital for a company in Thailand?

The Civil and Commercial Code sets no minimum registered capital for an ordinary limited company. It requires only at least two promoters under Section 1097 and a value of not less than five baht per share under Section 1117. Minimum capital comes from specific laws, such as Section 14 of the Foreign Business Act B.E. 2542, which sets a minimum of not less than THB 2 million for foreigners and not less than THB 3 million for businesses that require a licence, and from regulatory laws for certain businesses, which must be checked case by case.

What is paid-up capital, and how does it differ from registered capital?

Paid-up capital is the share money that shareholders have actually paid to the company, which Section 1111(3) and (4) require to be stated in the registration particulars. The first payment must be at least twenty-five per cent of the value of each share under Section 1105, paragraph three, and Section 1110, paragraph two. For example, a company with registered capital of THB 1 million may have paid-up capital of THB 250,000; the directors may call the remaining THB 750,000 later under Sections 1120 and 1121.

What happens if the rest of the share money is not paid?

The directors may call for payment at any time by registered letter on at least 21 days’ notice under Sections 1120 and 1121. A shareholder who does not pay must pay interest under Section 1122 and may have the shares forfeited and sold at auction under Sections 1123 to 1125. In Supreme Court Judgment No. 2837/2537, the Court held that if the auction raises less than the amount outstanding, the company may sue for the shortfall as an ordinary debt.

Can registered capital be reduced?

Yes, by a special resolution of the shareholders’ meeting under Section 1224, either by reducing the value of the shares or by reducing their number, but not below one-fourth of the total capital under Section 1225. The company must advertise in a newspaper and give written notice to creditors, who may object within thirty days under Section 1226, and must register the reduction within fourteen days under Section 1228. Supreme Court Judgment No. 1509/2566 revoked a reduction resolution in which a shareholder with a special interest had voted.

How much registered capital should a company have?

There is no single figure that suits every company. The main considerations are any minimum capital required by specific laws or by contracting parties, the money the shareholders are actually ready to pay, the liability the shareholders can accept, since they are liable up to the unpaid amount under Section 1096, and the documentary requirements once capital exceeds THB 5 million. Capital set higher than the money actually available does not make a company more credible; it leaves the shareholders owing unpaid share money that the company’s creditors may ultimately reach.