Nuanporn Wechsuwanarux
Chandler MHM, Bangkok
nuanporn.w@mhm-global.com

Kornkitti Sivamoke
Chandler MHM, Bangkok
kornkitti.s@mhm-global.com

Sirawan Fuengfoosin
Chandler MHM, Bangkok
sirawan.f@mhm-global.com

Key mechanisms for the operation of a company are meetings of the board of directors and shareholders because many transactions, whether by law or business practice, require the resolution of such meetings. Because paper resolutions are not allowed under Thai law, directors and/or shareholders are required to attend an actual meeting, which may be burdensome, especially for foreign investors who are not in Thailand. As such, Thailand has recently amended the law to adapt to new technology and innovation, that is, the recognition of the legality of electronic meetings ('E-Meetings') to facilitate the holding of such meetings to attract foreign investors.

Initial attempts to amend the law

There were several attempts to bring Thailand into the digital era for business operations in the past by adding the electronic means as an option for holding a meeting or the submission of documents via an online channel. However, such attempts were not as effective as hoped because government agencies tend to favour physical paper over electronic data. In addition, the government's technological capabilities and readiness to implement electronic systems were still under development. The relevant regulations were also not practical, especially the Notification of the National Council for Peace and Order (the 'NCPO') No 74/2557 Re: Electronic Meetings (the 'NCPO Notice') issued in 2014, which required that at least a third of the quorum of a meeting must be at the same venue and all meeting attendees must be in Thailand, in addition to a requirement that the articles of association must specifically allow an E-Meeting.

Amendments from Covid-19

After an initial attempt to amend the law, there were no significant changes to the law and regulations related to electronic means for business operations until the Covid-19 pandemic disrupted normal business operations. In March 2020, when significant preventive measures were introduced as a result of Covid-19, laws and regulations related to electronic procedures for business operations were urgently revised. Consequently, the NCPO Notice was replaced with the Emergency Decree on Electronic Meetings, BE 2563 (2020) (the 'Emergency Decree'), which became effective on 19 April 2020.

The Emergency Decree was an important step for the transformation of laws and regulations in Thailand, especially relating to corporate governance. This resulted in paperless practices, and more flexibility and certainty in relation to E-Meetings. The Emergency Decree eased legal restrictions, thereby allowing board of directors' and shareholders' meetings to be held via electronic means without undue difficulty. However, such meetings must still comply with requirements under the Notification of the Ministry of Digital Economy and Society Re: Standards for Maintaining Security of Meetings via Electronic Means, B E 2563 (2020) (as amended) (the 'DE Notification').

Transformation of laws and regulations after the Emergency Decree

After the Emergency Decree and DE Notification came into force, other relevant laws and regulations were adopted to facilitate electronic business operations, such as those relating to E-Meetings and the submission of corporate documents online. Although it took some time, the results of such changes have been fruitful. Presently, government agencies that are related to business operations, for example, the Revenue Department; Department of Business Development; and Board of Investment Promotion, encourage applicants to submit documents online, and their electronic systems are now functional and easy to use. For instance, discussions and appointments with officials can be made electronically, allowing applicants to meet with officials easily.

With the introduction of new regulations to facilitate and allow certain business activities to be performed electronically, major bodies of overarching laws in turn are being processed for amendment. The Public Limited Company Act, B E 2535 (1992), which is the law governing the operation of public limited companies, was recently amended to officially recognise the legality of E-Meetings, including sending documents to directors and shareholders electronically. The amendment came into effect on 24 May 2022. In this regard, the amendment of the Civil and Commercial Code (the 'CCC'), which is the governing law of the operation of private limited companies, to officially recognise the legality of E-Meetings is also being considered by the National Assembly. It is worth noting that, during the current gap in which the CCC has not been amended, private companies can rely on the Emergency Decree and DE Notification to hold E-Meetings.

Digital transformation trend

Although it is too early to judge whether Thailand's legal and regulatory framework will continue to develop to facilitate E-Meetings and the digitisation of regulatory requirements on businesses, recent developments have so far been positive. The new regulations that have been introduced have made Thailand more attractive to foreign investors by easing business operations. Amendments to the laws regarding E-Meetings were initially cautious; however, recent trends seem to point to a willingness to continue to develop the legal landscape to increase Thailand's competitiveness globally.