Thailand Startup Funding: Checks Before the First Round

Model ownership after the first round

Model the cap table immediately after the proposed first round, including any later conversion or employee equity you intend to promise. A cap table records who holds how many shares; it is an investment planning document, not a substitute for the company’s legal records. Ask who will own the Thai operating company, who will contract with customers, and which entity will receive the investment.

Under section 4 of the Foreign Business Act, a Thai-incorporated juristic person falls within the foreigner definition when at least half its capital is held by the relevant foreign persons; the definition also addresses qualifying corporate ownership chains. Sections 8 and 13 require attention to restricted activities and other applicable laws. The Thai statutory text therefore makes the shareholder composition and actual business activity central to the analysis, rather than the founder’s description of the venture as a technology startup.

Recheck the ownership route before a financing changes the shareholder structure. For an illustrative company with 100 equal-value shares, genuine Thai investors hold 51 and foreign investors hold 49. Issuing 20 additional equal-value shares to a foreign investor produces 69 foreign-held shares out of 120: 57.5%. This arithmetic flags a changed legal analysis; it does not establish that a licence will be available or determine how an actual share issue should be executed.

Review each revenue line, including implementation services, subscriptions, commissions and sales of goods. A product may generate more than one legally relevant activity. The activity limits after foreign investment help separate those revenue lines before you commit to a cap table. Where the Foreign Business Act restricts an activity, assess the applicable Foreign Business License (FBL), Foreign Business Certificate (FBC) or another lawful basis; do not assume that a certificate covering one promoted project covers all revenue.

A genuine Thai cofounder can be part of a commercial venture, but a nominal shareholder arrangement is not a substitute for lawful access. Preserve evidence of who contributes funds, bears investment risk and holds the shares. When an investor proposes an offshore holding company, draw both ownership charts and identify how the Thai subsidiary will receive its money; an offshore signature does not resolve the subsidiary’s Thai activity permissions.

Check the issuer and the financing promises

Choose the instrument according to what the company needs to receive and what the investor expects in return. Cash for shares changes ownership. A documented loan creates a repayment obligation. An instrument promising later conversion needs a workable conversion mechanism and a fresh ownership analysis at conversion. These are materially different commitments even when the investor calls every payment “seed funding.”

Registered capital is not your valuation or your remaining cash. Keep separate schedules for registered and paid-up share capital, any share premium, shareholder or third-party loans, and available operating funds. Ask the accountant to reconcile receipts and accounting entries to the executed documents. Capital recorded at formation may already have financed legitimate business expenditure; counting it again as fresh runway overstates the cash cushion.

The Securities and Exchange Commission, Thailand (SEC) explains a private-placement framework for shares and convertible debentures in its November 2022 PP-SME amendment . The amendment extended the framework to larger limited companies and describes shareholder approval of sufficient supporting shares before a convertible-debenture issue. That source establishes a conditional financing route, not blanket acceptance of a downloadable convertible-note or SAFE template.

Have the issuer, investor category, offer method, applicable current rules, approvals and disclosures checked before circulating investment documents. For a proposed SAFE—a simple agreement for future equity—or another foreign-law instrument, settle enforceability, conversion mechanics, corporate actions and the ownership outcome. Record any unresolved tax treatment in the review brief. Familiar commercial terminology does not establish that the promised rights can be implemented in Thailand.

Connect the financing to a specific legal issuer. Record its name, registered office, business objectives, share allocation, directors and signing authority, and compare those records with the investment documents. The company registration process in Thailand establishes the entity and recorded particulars; the investor’s closing conditions must identify the additional approvals and records required for the round.

For a company still being formed, DBD’s July 1, 2026 notice directs new partnership and limited-company registrations through DBD Biz Regist. The Department of Business Development (DBD) registration output is a separate milestone from investment closing. Assign someone to confirm that registration is complete and the final particulars match the intended issuer before the parties rely on that milestone.

Build the base cash forecast from money received or contractually available on conditions the company can satisfy. Keep unawarded grants, uncommitted investor interest and projected tax savings outside that base. A grant can be assessed separately when a current programme and its applicant conditions are identified. Likewise, a tax incentive may improve a future outcome, but it cannot pay this month’s salaries when no corresponding cash is available.

Put the company records, proposed ownership and financing terms beside the staffing forecast. A deal can be commercially attractive while still requiring a different approval sequence or earlier cash availability. BOI project conditions are the next check because they can affect both the lawful operating scope and the team the round must finance.

Match BOI conditions to product and payroll

BOI is worth assessing when an eligible project’s requirements fit the product, investment and team you actually intend to build. It should not be selected merely because a pitch deck says “innovative.” List the work performed in Thailand, the revenue attributable to that work, the assets and staff required, and the evidence you could maintain after approval. Compare the commercial plan with the activity conditions before making the incentive essential to the investment case.

BOI’s general criteria ordinarily set a THB 1,000,000 project investment minimum, excluding land and working capital, with activity-specific alternatives for knowledge-based businesses. Newly established projects ordinarily face a debt-to-equity limit of 3:1. The 2026 promotion guide also distinguishes application, approval acceptance and promotion-certificate issuance. These conditions make the equity/loan mix and the timing of capital evidence part of the financing design; the generic investment minimum is not a universal startup share-capital figure.

A software venture must fund the qualifying work

Activity 8.1.1 covers development of software, digital platforms or digital content. The current Thai BOI activity conditions specify at least THB 1,500,000 per year calculated from qualifying Thai IT personnel costs, including additional employment after application and/or qualifying temporary Thai IT employment. Development must take place in Thailand under BOI requirements; retail and wholesale of goods are excluded. The activity also requires full operation within 12 months of certificate issuance, without an extension of that deadline.

For a simple planning illustration, three qualifying Thai developers employed for a full twelve months at THB 50,000 monthly would produce THB 1,800,000 in salary expense: 3 × 50,000 × 12. This is arithmetic using assumed salaries, not a market wage estimate, an approval decision or the total employment budget. Hiring later reduces the actual period’s expenditure; contractors, founders and job titles should not be assumed to qualify without checking the specific employment and project conditions.

Qualifying payroll and total cash burn need separate columns. A venture may meet an activity’s expenditure condition while still lacking cash for its office, equipment, foreign specialists and customer delivery. Conversely, a large general payroll may not contain the required qualifying work. Assign each planned role to the proposed BOI activity and retain job descriptions, employment dates, contracts and payment records so that the projection can be tested against actual spending.

Where a promoted foreign business falls within List Two or List Three, section 12 of the Foreign Business Act provides the certificate route linked to that promotion. Record the covered activity and the certificate status before contracting on that basis. If your product pivots toward an uncovered revenue line, reopen the scope assessment before treating the new line as part of the promoted business.

Release offers against cash and permission

Release offers against a staffing plan that identifies the employer, work location, responsibilities, start date, cash cost and any permission required. The company’s registration date and the date an investor expects to fund are poor substitutes for those details. Make the person managing the recruitment process aware of unresolved financing conditions before they promise a start date that payroll cannot support.

For promoted projects using sections 25 and 26, BOI Announcement Por.8/2568 sets criteria for approving foreign positions, placing individuals into those positions and extending them. Business need and the role’s qualifications matter. Promotion should not be described as an unconditional staffing waiver: the company must have the relevant privileges, and a founder’s shareholding or director title does not itself complete the employment-permission process.

Keep foreign hires on a separate readiness line for the relevant position, individual and immigration/work-permission steps. A Thai development role counted toward a BOI project condition and a foreign specialist position are different entries. If the company is not using the promoted-project route, assess the ordinary employment and immigration requirements on their own facts; do not borrow BOI treatment for an unpromoted venture.

For employees entering the social security system, the Social Security Office’s employer notice requires notification within 30 days, using form SSO 1-03 or the e-service channel. Put employee registration into onboarding and retain the submission evidence. Set up the employer’s payroll and statutory-payment responsibilities with the accountant before the first pay run, rather than leaving them to the investor-closing team.

Budget gross pay together with employer obligations, recruitment, equipment and any permission-related spending; obtain the current applicable rates for the actual workplace and workforce. Do not count an employee-equity promise as spendable salary cash. Decide who approves headcount changes and who updates the forecast when a hire starts late, leaves early or needs a different authorization route.

Use the financing-to-hiring commitment matrix

Use this matrix to decide which first-round commitments can be accepted and which must change. It translates the ownership, financing and BOI conditions above into evidence that should exist before a commitment becomes irreversible. It is a proposed deal-planning tool, not an official approval checklist. Add a named owner and a due date in your working copy, and attach the underlying document to each completed entry.

Look especially for a circular dependency. In a hypothetical round, the investor releases money only after a BOI certificate is issued, while the certificate process needs evidence of foreign investment funds. The BOI certificate-document requirements include foreign-fund transfer evidence stating the investment purpose where foreign shareholding is involved. Assigning both events the same date does not solve that conflict. Agree how the required evidence will be funded earlier, or change the closing condition and allocate the approval risk.

Run a delayed-funding version of the same forecast. Start with cash actually available, subtract committed payments and the planned monthly outflows, and identify the first month when cash becomes inadequate. Model the start dates individually instead of dividing one annual budget by twelve. A delayed hire can affect the project evidence while a delayed investor payment can affect salary affordability; the fixes are different. For example, assuming THB 900,000 of available cash, THB 150,000 of immediate commitments and THB 250,000 of monthly outflows, the remaining THB 750,000 supports three months before any additional receipts. This hypothetical cash calculation is separate from whether particular payroll qualifies for BOI. A four-month funding delay would require a change before the fourth month’s commitments fall due.

Before closing, reconcile the cap table, executed investment documents, bank receipts, corporate records and any applicable certificates. Mark each item received, pending or inapplicable, with the reason. If a document disagrees with another, correct the source record and then update the dependent documents. Do not quietly change the spreadsheet and leave the signed agreement or registered particulars inconsistent.

Fix the dependency before accepting the round

Accept the first-round commitments when the founders can explain who will own the operating company after the round, which activities it may perform, which financing terms can be implemented and which hires the available cash supports. If BOI is part of that answer, the project scope and personnel assumptions must be credible without treating the anticipated incentives as cash already received.

The dependency that changes the other commitments should be settled first: a post-round ownership change, an instrument that cannot be implemented as proposed, a BOI condition the team cannot meet, or a funding milestone that leaves payroll uncovered. Settle that issue first, then align the formation file, financing documents and hiring schedule around the agreed solution.