Convertible Note Drafting
ร่าง Convertible Note (หุ้นกู้แปลงสภาพ) · § Instrument
What to know before you act
A convertible note is a loan that can turn into equity; unlike a SAFE it carries interest and a maturity date. Under Thai law watch the interest cap, withholding tax when the lender is abroad, and the debt-to-equity conversion steps that require registration. We draft conversion terms, discounts, caps and maturity rights consistent with civil and company law.
Timing and external dependencies: Drafting and negotiation usually take a few weeks; debt-to-equity conversion follows registration steps.
Official fee: Loan stamp duty, capital registration fees and interest withholding — confirm with the Revenue Department and DBD.
Timing is not a promise of an outcome or hearing date. Check the notice, limitation period and current authority rules for your matter.
What to send for the first review
Send every relevant page, a dated sequence of events, any hearing or filing deadline, and the outcome you need. This lets counsel identify urgent steps, missing evidence and a precise scope of work.
- Latest financials + 18-month cash-flow forecast
- Term sheet with interest, discount, cap, maturity
- Board + shareholders' resolutions
Legal Basis
Public Company Act §65 · SEC Notification TorJor. 32/2565 on convertible debentures. For Ltd. companies we combine CCC §1229 with a loan + option agreement.
📚 Official sources — check the current law and procedure before acting
- กรมพัฒนาธุรกิจการค้า — จดทะเบียนนิติบุคคล / ธุรกิจคนต่างด้าว— Department of Business Development
- ธนาคารแห่งประเทศไทย— Bank of Thailand
- สำนักงานคณะกรรมการกฤษฎีกา — ตัวบทกฎหมายฉบับทางการ— Office of the Council of State
Who Needs This
Startups preferring debt-first with conversion at a clear valuation, and family offices needing downside protection.
Required Documents
- Latest financials + 18-month cash-flow forecast
- Term sheet with interest, discount, cap, maturity
- Board + shareholders' resolutions
- Investor KYC/AML (source of funds)
- Existing debt schedule (for subordination)
Common Pitfalls
- Interest above the legal cap
- Missing withholding on interest to foreign lenders
- Maturity arriving with no cash and no extension clause
Typical Use-cases
- Fintech raising a bridge round from a CVC ahead of Series A
- Revenue-generating ecommerce needing a 6-month bridge
- Hard-to-value deep-tech using note + valuation cap
FAQ
- SAFE or convertible note?
- Notes protect investors more; SAFEs are simpler and more flexible — it depends on negotiation and plans.
- Must foreign loans be reported to a bank?
- Bank of Thailand exchange-control rules may apply; check with the receiving bank.
- Does conversion require new cash?
- No, but share payment by debt set-off must follow legal steps.
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Official sources — legal services
The information on this page follows the official sources below. Always check the latest version before you file.
- Office of the Judiciary— Office of the Judiciary
- Ministry of Justice— Ministry of Justice
- Lawyers Council of Thailand — Notarial Services Attorneys— Lawyers Council of Thailand
- Office of the Council of State — Thai law database— Office of the Council of State
- Royal Thai Government Gazette— Royal Thai Government Gazette
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Frequently asked questions
- Can a foreigner own 100% of a Thai company?
- Full foreign ownership is possible for some activities, but there is no blanket permission. Check the Foreign Business Act definition, actual activities, sector-specific restrictions and any required licence or certificate. BOI promotion and treaty rights apply only within their approved scope; they do not automatically confer land rights, visas or work permits. Do not use nominee shareholders. Verify the proposed structure with DBD.
- What is the minimum registered capital for a Thai company?
- Do not apply one capital figure to every incorporation, foreign-business licence, visa or work-permit application. Registered capital and paid-up capital are different, and the applicable requirements depend on actual activities, ownership, permit category and any BOI or treaty conditions. Capital is a company funding requirement, not our service fee. Confirm the relevant criteria with DBD, the Department of Employment and Immigration before choosing the structure. Ask our team for a quotation for the agreed work.
- How long does company registration take?
- Separate document preparation, name reservation, signatures and DBD review from VAT registration, Social Security and bank onboarding. Timing depends on the filing channel, complete documents and any requests for corrections or additional evidence; no completion date is guaranteed. Ask our team for a quotation and a planning estimate after the proposed structure and documents have been reviewed.
- What ongoing accounting obligations does a Thai company have?
- A Thai limited company keeps statutory books and prepares audited annual statements even without trading. Tax returns depend on its payments, VAT status, accounting period and taxpayer category: PND1, PND3 and PND53 are not universal monthly returns for every company, and PP30 applies to VAT-registered businesses, including nil-return months while registration remains active. Check PND50, PND51 and each filing deadline with RD; check annual statements and shareholder filings separately with DBD.