Intellectual
Property Rights Agreements:
Technical
Assistance and Trademark License provisions are usually contained
in the joint venture agreement. The BOT (Bank of Thailand) must
be provided with copies of these agreements if an application
to remit funds abroad is made pursuant to them. In most cases
agreements such as these allow the foreigner to remit profits
abroad at low total tax rates. Another source of profit to a
parent company are agreements for the supplying of raw and other
materials to the joint venture.
Management
Agreements: The Thai side sometimes requires that a provision
for a management agreement in their favor be stated in the joint
venture agreement. This would give the Thai side allowance to
receive management fees and is thought to offset to some degree,
the advantages foreigners receive from the payments relative
to the above mentioned agreements.
The
Articles of Association details how a company will be managed
and lays out the relationship between shareholders and directors.
This is the second important document which is to be filed with
the Ministry of Commerce. The Articles of Association must be
in good order for there to be effective control by a particular
group of shareholders. The Articles may provide for the division
of shares of a company into one or more classes may be done,
with each class having specific rights. There are a number of
ways to structure different classes of shares and apportion
rights to each class. One factor to be considered when classes
have largely equal rights is the possibility of a deadlock.
In light of this, with careful drafting most class of shares
issues may be resolved.
