Thailand Law Journal 2013 Fall Issue 1 Volume 16

Section 97 states that the following juristic persons have the same title in land as a foreigner.:-
(1) Corporations that contains the amount of foreign capital more than 49% or contains foreign shareholders more than a half. Additionally, if such corporation issue bearer bonds, that bonds it shall be deemed that foreigners hold that bonds.⁷⁵

Section 98 states that in case that the juristic persons in accordance with section 97 capitalized or become shareholders or partnerships in other juristic persons in the way of section 97, such juristic person shall be deemed as foreigners. Section 86 states that for foreigners, in order to obtain any land for purpose of living, commerce, industry, agriculture, cemetery, donation or religion, it is under condition and rule regulated by ministerial regulation and minister permission.

From the aforementioned rule, foreigners have limited rights in possessing land which are different from natural or juristic persons with Thai nationality. Therefore, somebody may try to circumvent the law by establishing a corporation to possess the land instead of them. Consequently, piercing the veil doctrine will be applied in this situation. This doctrine will deem such corporation as a foreigner which is manipulated by foreign natural persons since they are major shareholders and control the majority of the business that make the corporation become the same entity as foreign shareholders.⁷⁶

5) Commercial Banking Act, B.E. 2505 (A.D. 1962).
This act has applied piercing the corporate veil doctrine in the following:-

Section 5 Bis states that no person shall hold more than five percent ff the total amount of a commercial bank's share sold….

Shares of a commercial bank held by the following persons or partnerships shall be regarded as shares held by the person under the first paragraph:
(1) the spouse of the person under the first paragraph;
(2) a minor child of the person under the first paragraph;
(3) an ordinary partnership in which the person under the first paragraph or the person under (1) or (2) is a partner;
(4) a limited partnership in which the person under the first paragraph of the person under (1) or (2) is a partner with unlimited liability or in which one or more of such person is a partner or are partners with limited liability in a aggregate amount exceeding thirty percent of the total capital of such limited partnership;
(5) a limited company in which the person under the paragraph or the person under (1) or (2) or the partnership under (3) or (4) holds shares, separately or in combination, in an aggregate amount exceeding thirty percent of the total amount of such limited company's shares sold; or
(6) a limited company in which the person under the first paragraph or the person under (1) or (2) or the partnership under (3) or (4) or the limited company under (5) holds shared, separately or in combination, in an aggregate amount exceeding thirty percent of the total amount of such limited company's shares sold.⁷⁷

The above rules illustrate implication of piercing the corporate veil doctrine in the way that they deem the corporation which is settled by natural person in order to hold shares in a commercial bank with purpose to circumvent section 5 Bis by holding more than 30 percent of the shares in such corporation. Therefore, they have major control in the corporation. Consequently, the law defines the shares that are held by such corporation as the shares of natural person who is the shareholder of the commercial bank, then it is against the law to hold more than 5 percent of the commercial bank's shares.

Additionally, section 12 states that no commercial bank shall:
(2) in favor of its director, grant credits, guarantee any debts, or accept, gives aval to, or intervene for honor of any bills which the director is a drawer, a maker or an endorser, Section 12 Bis states that the granting of credits or guaranteeing of any debt in favor of any of the following persons or partnerships, or the accepting of any bill, the giving of aval to or the intervening for honor of any bill which any of the following persons or partnerships is a drawer, maker or an endorser shall be deemed to be the granting of credits or guaranteeing of any debt or the accepting, the giving of aval or the intervening for honor for the benefit of the director under Section 12 (2):
(1) the spouse of the director;
(2) a minor child of the director;
(3) an ordinary partnership in which the director or the person under (1) or (2) is a partner;
(4) a limited partnership in which the director or the person under (1) or (2) is a partner with unlimited liability or in which one or more of such persons in a partner or are partners with limited liability in an aggregate amount exceeding thirty percent of the total capital of such limited partnership;
(5) a limited company in which the director or the person under (1) or (2) or the partnership under (3) or (4) holds shares, separately or in combination, in an aggregate amount exceeding thirty percent of the total amount of such limited company's
share sold; or
(6) a limited company in which the director or the person under (1) or (2) or the partnership under (3) or (4) or the limited company under (5) holds shares, separately or in combination, in an aggregate amount exceeding thirty percent of the total amount of such limited company's shares sold.

According to section 12, there is a feature of enforcing piercing the corporate veil doctrine to define the liability of shareholders or directors and/or family members of shareholders or directors of corporations who hold shares more than 30 percent (can control the corporation) by deeming that the granting of credit to the director of the corporation who is the major shareholder of such corporation is equal to granting the credits to the director of the commercial bank which are prohibited by law.⁷⁸

6) Thai Revenue Code

Thai revenue code have adopted the piercing the corporate veil doctrine to benefit the government in collecting tax, for example,:

75. Id.

76. Id.

77. Id.

78. Id. at 23.