Business Due Diligence in Thailand: Licences, Taxes, Employees and Contracts

Business due diligence is the process of checking whether the opportunity, documents and risks match what has been presented. A buyer should define the scope before paying a non-refundable deposit and use independent Thai legal, accounting, tax and technical advisers where appropriate.

1. Confirm the transaction and due-diligence scope

Start by confirming whether the buyer will acquire company shares, selected assets, a leasehold operation or another interest. Prepare a written information request and identify the review period, access to records, confidentiality terms, responsible advisers and the conditions that must be satisfied before completion.

2. Verify the company and ownership

Review current Department of Business Development records, registered objectives, capital, shareholders, directors and signing authority. Compare these records with the seller’s documents and confirm who owns the shares and assets being offered. Check whether any corporate, lender, partner or third-party approval is required.

3. Test the financial information

Compare financial statements, management accounts, tax filings, bank records, sales systems and supporting invoices across a meaningful period. Separate recurring trading results from owner expenses, exceptional items and unverified adjustments. Test revenue, gross margin, payroll, rent, utilities, commissions, maintenance and working-capital needs rather than relying on headline profit alone.

4. Review tax compliance

Check the relevant corporate-income-tax, VAT, withholding-tax and payroll filings, together with payment evidence and correspondence from the Revenue Department. Identify unpaid tax, late filings, disputed assessments and any transaction taxes that may arise. A Thai tax adviser should confirm the current treatment for the chosen deal structure.

5. Check every important licence and approval

Prepare a list of licences, certificates and operational permissions, including the holder, premises, expiry date and conditions. Confirm directly with the responsible authority whether each approval remains valid after a share sale, can be transferred with assets, or requires a new application. Pay particular attention to regulated activities such as hotels, food, alcohol, factories, schools, clinics and travel services.

6. Verify assets and intellectual property

Inspect major equipment, furniture, vehicles, inventory, websites, domains, telephone numbers, software, social accounts and branding. Confirm ownership and condition, and check for finance, hire-purchase, liens or third-party rights. Search registered trademarks and make sure the sale agreement identifies exactly which intellectual-property rights will be transferred.

7. Review the premises

Check the title or lease, rent, deposit, remaining term, renewal wording, permitted use, assignment rights, landlord consent and registration status where applicable. Inspect the premises and major systems, then identify repair, renovation, insurance and reinstatement obligations. The business purchase and the right to occupy should be coordinated in the completion documents.

8. Examine employees and key contracts

Review employee lists, roles, wages, accrued benefits, social-security records and any disputes or potential severance exposure. Check customer, supplier, franchise, booking-platform, loan, insurance and service agreements for termination, assignment, change-of-control, exclusivity, guarantee and renewal provisions.

9. Search for liabilities and disputes

Request details of loans, unpaid suppliers, customer deposits, personal guarantees, litigation, regulatory notices, insurance claims and related-party transactions. Confirm which liabilities remain with the seller and which may follow the company, assets or operation after completion.

10. Turn findings into written protection

Material findings should be addressed through price adjustments, conditions precedent, warranties, indemnities, retention arrangements or withdrawal rights as appropriate. The final agreement should list the completion documents, assets, approvals, payments and handover steps. Due diligence reduces uncertainty, but it does not replace carefully drafted transaction documents.

Official starting points

Company information can be checked through the Department of Business Development, current tax information through the Revenue Department, registered intellectual property through the Department of Intellectual Property, and land information through the Department of Lands. Verify current requirements against the actual business and documents.