As businesses pursue growth through market final to published


As businesses pursue growth through market expansion, restructuring or new investments, attention is often directed toward commercial opportunities, financial projections and speed to execution. However, many organisations underestimate one critical success factor — legal readiness.  

In this article, Khun Threenuch Bunruangthaworn, Legal Partner at BDO in Thailand, shares insights drawn from extensive experience advising both local and international companies. She highlights the legal considerations that businesses frequently overlook during expansion and explains why addressing these issues early is essential to managing risk, protecting value and enabling sustainable growth.  

Outlined below are some of the critical legal pillars often overlooked during business expansion initiatives. 

1. Corporate structuring and compliance  

Choosing the right legal entity is more than just a paperwork exercise; it dictates your tax liability, personal exposure and ability to raise capital.  

  • Localisation gap: A common mistake is "copy-pasting" a domestic corporate structure into a foreign market. Jurisdictions vary wildly on requirements for resident directors, minimum share capital, and public disclosure of ownership. Getting the local set-up wrong can lead to severe consequences / expensive rectification works down the track.  

  • Subsidiary vs. branch: . A branch is an extension of the parent company and is typically quicker to establish, however it can expose the parent entity to increased risk, eg local lawsuits. A subsidiary will trigger more local compliance / regulatory matters; however, it offers better liability protection. . Understanding the difference is vital in order to determine which is the appropriate approach 

  • Maintenance "housekeeping": As entities multiply, many companies lose track of "housekeeping"—annual filings, board resolutions, statutory audits and annual general meetings (AGMs). Failure to maintain these can lead to penalty fines / regulatory breaches for non-compliance.   

2. Contract management and governance  

As you scale, the volume of contracts grows exponentially. Without a centralised system, companies can lose track of "evergreen" clauses and liability caps.  

  • Standardisation vs. agility: Sales teams in new markets often sign vendor-provided contracts to move quickly. Without a Contract Playbook, they may inadvertently agree to uncapped liabilities, litigation in a foreign court or loss of intellectual property (IP) rights. 

  • Entity governance: Companies frequently overlook who has the legal right to bind the company in a new region. This lack of governance can lead to internal fraud or "ghost contracts" that head office has no visibility into. 

  • Post-signature management: Legal readiness is not just about signing; it’s about tracking. Knowing when a contract auto-renews or when a price-escalation clause kicks in is critical for maintaining margins during expansion.  

3. Employment and compliance risks  

Employment law is arguably the area where companies face the most immediate litigation risk during expansion and is often the most significant source of "culture shock" for expanding businesses.  

  • At-will vs. statutory protection: Thailand does not recognise “at-will” employment. Terminations should be handled carefully as mishandled dismissals may expose an employer to unfair termination claims/additional compensation claims.  

  • Misclassification of contractors: To move quickly, many firms hire "independent contractors." However, Thailand applies a "substance over form" test.  If the worker looks and acts like an employee (i.e. direct supervision to contractors, obligation to follow work rules and regulations) then there is a risk they may be classified as an employee, which may trigger additional liabilities including   retroactive personal income tax , social security contributions, mandatory benefit payouts or penalties. 

  • HR documents localisation: A global handbook or HR documents that ignores local cultural and legal norms can create compliance gaps. To mitigate non-compliance risk, HR documents should be localized, especially for workplace conduct, benefits, welfare, grievance procedures, leave entitlements, disciplinary actions and termination protocols in order to meet local labour requirements and market practice.  

4. Cross-border considerations  

Operating across borders introduces a layer of complexity that transcends traditional commercial law.  

  • Foreign restriction: Foreign investment regulation is anchored by a protectionist mindset that distinguishes between "restricted" and "promoted" activities. For example, Thailand uses the Foreign Business Act (FBA) to actively manage the level of foreign competition in the local economy, especially for foreign ownership. Requirements for foreign business licenses/certificate must take into consideration as failing to secure the correct licence or certificate before commencing operations triggers severe legal consequences (i.e. criminal penalties, financial fines and forced dissolution).  

  • Regulatory licensing: Beyond general business permits, industry-specific regulations (FinTech, Health, Energy) are often moving targets. Companies frequently overlook the time-lag required to obtain local data-hosting permits or professional licenses.  

  • Exchange Control: . These laws are used by governments to stabilise their national currency and manage balance of payments by restricting the inflow and outflow of foreign currency.  Overlooking these rules can lead to the total freezing of corporate funds, or the inability to pay global vendors and staff.  

“During business expansion, legal requirements are frequently perceived as a secondary administrative task rather than as a strategic foundation. This approach often results in significant oversights, which can lead to complex issues that become exponentially more costly to remediate over time” said Khun Threenuch Bunruangthaworn, Legal Partner, BDO Thailand.” 

Expanding into new markets is exciting—but it comes with hidden legal complexities that can stall growth or create costly risks. At BDO Thailand, we help businesses navigate these challenges with confidence. From corporate structuring and compliance to cross-border tax, employment law and regulatory licensing, our team ensures your expansion is built on a solid legal foundation.  

Leading this effort is Khun Threenuch Bunruangthaworn, our experienced Legal Partner BDO in Thailand, who brings deep expertise in corporate law, governance and international business regulations. Whether you’re scaling regionally or globally, we provide practical, strategic advice to keep your growth seamless and compliant.  

About BDO in Thailand  

BDO in Thailand is a member firm of BDO International, one of the world’s leading accounting and advisory networks. The firm provides audit and assurance, advisory, tax and legal, and business services and outsourcing to local and international organisations. With offices in Bangkok and Phuket, BDO in Thailand combines strong local expertise with global insight to support sustainable business growth. 

Read on Bangkok Post