Highlights
Share Deal vs. Asset Deal — What’s the Difference? - Share Deal = fastest takeover — the whole company stays intact, from contracts to employees.
- But you inherit everything — past debts, tax issues, disputes… all remain inside the company you now own.
- Asset Deal = take only what you want — profitable assets, key contracts, IP, etc.
- Lower hidden-risk exposure — most legacy liabilities stay with the seller.
- But more admin — each asset, contract, license, and employee must be transferred or approved.
- Tax differs — shares = 0.1% stamp duty; assets may trigger VAT, SBT, and transfer fees.
Choosing the right structure matters. Due diligence is your best protection.
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The acquisitions of the business in Thailand can be carried out through several legal and structural methods, depending on the objectives, business nature, and regulatory requirements of the parties involved. In this regard, 2 of the most common methods are a share acquisition (share deal) and an asset acquisition (asset deal), each with its own key characteristics, legal implications, and procedural requirements under Thai law.
Share Acquisition
The acquisition of rights and control over a company or its business may be achieved through a share acquisition (share deal). Through shareholding, the shareholder is entitled to various rights and powers under the law to influence the company’s direction. This method offers several advantages, as outlined below:
- Ease of ownership transfer – Ownership, power and control in the target company including, but not limited to voting rights, dividend entitlements, and participation in the management of the company through shareholders’ meetings are transferred through the purchase and transfer of shares. In practice, this can be completed by simply executing the share transfer instruments and recording the transfer in the company’s register of shareholders. Filing or registering the transfer with government authorities, such as the Department of Business Development (DBD), is not required for the legal perfection or effectiveness of the transfer. Unlike an asset acquisition, which may require the transfer of individual assets, assignment of contracts, and notification or consent from third parties, a share acquisition allows the purchaser to step into the existing legal entity “as is.” Upon completion of the share transfer, the purchaser automatically acquires all rights attached to the shares, enabling a smoother transition and minimizing operational disruptions. This makes share deals generally faster and less administratively burdensome.
- Liability considerations – In a share acquisition, the purchaser acquires not only the shares of the target company but, indirectly, the entire corporate entity “as a whole.” This means that all existing liabilities whether disclosed, undisclosed, contingent, or arising after closing from pre-closing events, continue to reside within the target company and therefore remain the company’s responsibility which is now under the Purchaser.
These liabilities may include, for example, outstanding debts and contractual obligations, tax liabilities, employment-related claims, severance obligations, regulatory non-compliance or penalties, pending or potential litigation.
- Business continuity – Since the legal status of the target company remains unchanged, all existing contracts, licenses, permits, and employment relationships remain valid and effective, unless otherwise restricted by the agreement or applicable laws which impose specific restrictions triggered by a change in shareholding or control. Customers, suppliers, employees, and regulators can continue dealing with the same legal entity. This ensures smooth business operations during and after the ownership change.
- Tax implication – A transfer of shares in a private limited company in Thailand is generally subject only to stamp duty at the rate of 0.1% of the consideration. No value-added tax (VAT) is imposed on a share transfer.
Asset Acquisition
Apart from acquiring shares, another method of acquiring a business is through an asset acquisition (asset deal), whereby the purchaser acquires only those assets of the target company that are expected to generate value or profit. This method offers several advantages, including the following:
- Selective Acquisition of Assets – The purchaser able to choose only the assets that are commercially desirable, such as equipment, contracts, or intellectual property, while excluding unwanted or underperforming assets, including those that may impose unnecessary financial, operational, or compliance burdens or liabilities.
- Minimized Risk of Unknown Liabilities – Since the purchaser acquires only selected assets rather than shares, any historical contingent, or undisclosed liabilities remain with the target company do not automatically transfer to the purchaser. This includes liabilities such as outstanding debts, pending litigation, tax exposures from prior years, employment claims, regulatory non-compliance penalties, and other obligations arising before the transaction.
Because liabilities do not “attach” to the acquired assets unless the law or specific contracts provide otherwise, the purchaser has greater control over what risks they are willing to assume. This structure helps limit post-closing surprises and reduces the need for extensive warranties and indemnities typically required in a share acquisition. Additionally, buyers often use asset deals to avoid inheriting legacy problems from a distressed or heavily indebted company.
- Higher Complexity and Cost – Despite its advantages, an asset acquisition is generally more complex and costly to implement compared to a share acquisition because the parties must transfer each asset individually. Certain assets, such as land or buildings, require registration with the relevant authorities, while others such as licenses or permits may require new applications or approvals.
Additionally, transferring contracts, suppliers, or employees involves further procedural steps. For example, transferring employees to a new employer is treated as a termination of the existing employment contract under Thai labor protection law, which may require the employee’s consent; if consent is not given, the seller may need to provide severance payments. These procedural requirements increase administrative work, costs, and the overall timeline of the transaction, making asset deals more burdensome than share acquisitions.
- Tax implication – The asset acquisition may trigger VAT, specific business tax, and transfer fees depending on the type of asset being transferred.
Whether to choose a share deal or an asset deal, conducting thorough due diligence is very critical, as it allows the purchaser to gain a comprehensive understanding of the target company’s financial, legal, and operational condition, as well as any potential liabilities or risks. Proper due diligence provides the foundation for informed decision-making, supports accurate valuation, ensures compliance with regulatory requirements, and helps tailor the purchase agreement to protect the purchaser’s interests. By combining careful due diligence with well-drafted agreements, the purchaser can ensure a smooth, secure, and successful acquisition, whether through a share deal or an asset deal.
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For more information or tailored guidance on these matters, please feel free to contact Phatamol Phisitbuntoon at Phatamol.p@wiseequitylegal.com or Benjapa Ratanawaraporn at Benjapa.r@wiseequitylegal.com.
