Thai Company

Holding Company

A holding company is a company whose primary source of income is the ownership of shares in other companies, with no significant business of its own. A holding company invests in local or foreign subsidiaries that operate a core business in the country and/or other countries, and must not have the characteristics of an investment management company (Investment Company).

Why structured as a holding company ?

The Company can grow by increasing its investments in both related and unrelated business lines, both domestically and/or internationally.

Having different structured companies within the group may cause difficulties in selecting a specific company to be listed on the SET.

Merging companies with different business lines may be subject to operational, tax, or legal constraints.

Qualifications for Listing of a Holding Company

1.	A holding company’s operation shall not be in a manner of investment management
2.	The primary goal of a holding company's operations must be to make investments that allow it to participate in the management of the companies in which it has invested
3.	A holding company must choose a company operating core business (Core Company) over which it has management control in proportion to its shareholding
4.	A core company must be a subsidiary company of the holding company
5.	If a core company is subject to limitations prescribed under other laws or conditionsset in the joint investment with the public sector, its holding company must hold not less than 40% of the total number of shares in such company and can prove that it is involved in the management of such company at least in accordance with the proportion of its shareholding in such company
6.	If a core company is subject to limitations prescribed under other laws or conditionsA holding company must be a company with operational performance that meets the criteria for securities listing and must maintain its shareholding in the core company throughout the listing period. It can replace the core company upon the lapse of 3 years from the commencement date of trading on the Exchange

Why is it structured as a holding company?

The Company can grow by increasing its investments in both related and unrelated business lines, both domestically and/or internationally.

Having different structured companies within the group may cause difficulties in selecting a specific company to be listed on the SET.

A merger of companies with different business lines may be subject to operational, tax, or legal constraints.

Qualifications for Listing of a Holding Company

A holding company’s operation shall not be in a manner of investment management

The primary goal of a holding company's operations must be to make investments that allow it to participate in the management of the companies in which it has invested

A holding company must choose a company operating core business (Core Company) over which it has management control in proportion to its shareholding

A core company must be a subsidiary company of the holding company

If a core company is subject to limitations prescribed under other laws or conditions set in the joint investment with the public sector, its holding company must hold not less than 40% of the total number of shares in such company and can prove that it is involved in the management of such company at least in accordance with the proportion of its shareholding in such company

A holding company must be a company with operational performance that meets the criteria for securities listing and must maintain its shareholding in the core company throughout the listing period. It can replace the core company upon the lapse of 3 years from the commencement date of trading on the Exchange

Table comparing the listing of a Holding Company and an Operating Company

	Holding Company	Operating Company
Business nature	It has no significant business of its own and invests primarily by holding shares in other companies	Own a primary business such as manufacturing, distribution, and sales of products and services
Revenues	Dividends	Revenues from sales of products and services
Market	SET / mai	SET / mai
Listing Criteria	Profit Test Market Cap. Test (SET only)	Profit Test Market Cap. Test (SET only)
Applicant	Holding Company	Operating Company
Qualifications (quantity and quality)	Holding Company and subsidiary company operating core business (Core Company)	Operating Company
Qualifications (quantity and quality)	Qualifications of a core company investing in infrastructure projects (Infrastructure Project) will be subjected to other relevant criteria.	Operating Company
Management	Holding Company	Operating Company
Management	A Holding Company must have management control over the core company in proportion to its shareholding	Operating Company
Silent period	Normal criteria	Normal criteria Strategic shareholders are prohibited from selling their shares in the aggregate amount of 55% of their paid-up capital for one year after the completion of the IPO Upon completion of a 6-month period of trading shares on the Exchange, they can gradually sell 25% of the locked-up shares
Silent period	A company whose primary business is to invest in infrastructure projects (Infrastructure Project) will be subjected to additional relevant criteria.
Listing status	Normal criteria	Normal criteria such as maintaining the shareholding of minority shareholders (Free float)
	Holding Company Not having characteristics as an investment company (Investment company) It must have management control over the core company in proportion to its shareholding It must maintain its shareholding in the core company throughout the listing period. It can replace the core company upon the lapse of 3 years from the commencement date of trading on the Exchange
	A core company must have the following qualifications: Not having the status of a listed company Having its own main business operation

Presently, the business structure as a holding company is one of the most popular company structures for several reasons;

A company tends to establish its new subsidiaries in order to expand the business both domestically or overseas, which can be related or unrelated to its current business.
Many companies acquire subsidiaries with various firm structures while some of their subsidiaries also expect to list on the Exchange.
For the conglomerates, listing as a holding company allows them to avoid difficulty in terms of selecting the best representative to submit for listing.

Holding Company : refers to a company, which generate revenue from holding shares in other companies and the company itself does not have a full operating activity. The company may invest in a subsidiary operating main business which conducts business domestically and/or internationally, but it must not be an investment company.

The company being categorized as a company operating main business

The said company must be a subsidiary of Holding Company.
If a subsidiary operating main business is subject to government-joint investment or other laws, the holding company must hold ≥ 40% of the subsidiary operating main business shares and be able to show management control proportionally to its shareholding.

The holding company has to meet the qualification of operating result as listing regulation and maintain its shareholding in the subsidiary operating main business through the listing period. The subsidiary operating main business can be changed after three years from listing date. Holding company which has not reached 3 years of holding its core company has to be complied with specified period.

Investment proportion of Holding Company
The holding company’s proportion of investment in the group of companies that engage in core business comparing to the total assets of the holding company is as follows.

Total size of all investment in subsidiaries and associates being held > 25% operating the core business, not less than 75% of the holding company’s total assets.
The size of its core-business subsidiaries not less than 25% of the holding company’s total assets.

Remark * If the company considers that the requirements is not appropriate to the business, it may use alternative variables e.g. revenue or profits. The company must provide reasons, the needs, and rationale of alternative variables.

Listing Rules and Regulation in the Stock Exchange of Thailand (SET) and Market for Alternative Investment (mai)

The Exchange shall consider both qualification of common share and qualification of both the applicant and its subsidiary operating main business.

Qualifications for common shares

having a par value not less than Baht 0.5 per share and being fully paid-up
bearing holders’ names
having no restrictions on transfer of ordinary shares, unless the restrictions are in accordance with laws and are included in the articles of association of the company

Subject	The Stock Exchange of Thailand (SET)	Market for Alternative investment (mai)
Status	Must be a public limited company or corporation established under special law.
Paid-up Capital (After IPO)	≥ THB 300 million	≥ THB 50 million
Financial condition and liquidity	Total equity ≥ THB 300 million and total equity > 0 before apply the listing application. Must be in a stable and healthy financial condition and have sufficient working capital.	Total equity ≥ THB 50 million and total shareholder equity > 0 before apply the listing application. Must be in a stable and healthy financial condition and have sufficient working capital.
Track record	Profit Approach (Profit Test) Must have the operating results in accordance with the specified requirements and continuously until the date of approval for being listed securities At least 3 years of operating track record under at least one year of the same management prior to the application date Combined minimum net profits from operations of THB 50 million over the past two or three years, net profits from operations of THB 30 million for the latest full year, and an accumulated net profit in the latest period prior to the filing of an application	Profit Approach (Profit Test) Must have the operating results in accordance with the specified requirements and continuously until the date of approval for being listed securities At least 2 years of operating track record under at least one year of the same management prior to the application date. Minimum net profits from operations of THB 10 million over the latest year, and an accumulated net profit in the latest period prior to the filing of an application
	Market Capitalization Approach^/1 The specification shall be in accordance with the Market Cap Test criteria.
Distribution of minority shareholders or free float ^/2 (After IPO)	Issued shares in hands ≥ 1,000 shareholders Shareholding Ratio Total shareholding ≥ 25% of paid-up capital (or ≥ 20% of paid-up capital if the paid-up capital ≥ THB 3 billion) Each shareholder must hold at least 1 trading unit in accordance with the rule.	Issued shares in hands ≥ 300 shareholders Shareholding Ratio Total shareholding ≥25% of paid-up capital (or ≥20% of paid-up capital if the paid-up capital ≥ THB 3 billion) Each shareholder must hold at least 1 trading unit in accordance with the rule.
Public Offering Approval	Must have been granted approval by the SEC (except for a company established under a special law). Offered through an underwriter
	Number of shares cumulatively offered for sale: Offer for sale ≥ 15% of paid-up capital (If the paid-up capital is ≥ Baht 500 million, the company offer ≥10% or value of the ordinary shares based on par value ≥ Baht 75 million, whichever is higher.)	Number of shares cumulatively offered for sale: ≥ 15% of paid-up capital
Directors and executives	Having the directors and management who are responsible for the management of subsidiary operating main business ≥ 1 years prior to listing application and continuously until the date of approval for being listed securities, except for the following events: (a) the Applicant is a financial institution of which the regulatory agency has otherwise prescribed rules in relation to directors and management; or (b) the Operating Core Business Company has an investment in a project which is a Basic Public Utilities that is beneficial to Thailand;
Nature of Business Operation	No operations are conducted in the manner of an investment management business (Investment Company) as prescribed under the Notifications of the Capital Market Supervisory Board ^/3/4 Holding Company must hold shares in at least 1 Subsidiary Operating Core Business which generates main profit as of the date of the submission of application for at least 3 years from the commencement date of trading on the Exchange, whereby Such Subsidiary Operating Core Business must not be a Listed Company ; and Be able to prove that the Applicant is the Person who has Controlling Power or has the power to manage such Subsidiary Operating Core Business according to its shareholding proportion In case the Subsidiary Operating Core Business is established under foreign laws, such subsidiary shall have directors residing in Thailand pursuant to the rules prescribed in the Notification of the Capital Market Supervisory Board.
Management and control personnel	Board of directors and Management must hold qualifications accordingly ; Not have any characteristics prohibited by The Capital Market Supervisory Board^/3 Board of directors and Management and control personnel must not have any characteristics prohibited by SET regulations that may affect an investor’s rights or decision, or a change of share price. The Board of Director’s duties and responsibilities must be clearly defined as specified by The Capital Market Supervisory Board^/3 The person taking the highest responsibility in finance and accounting (Chief Financial Officer: CFO) and the person supervising accounting (Chief Accountant) have to meet the qualifications specified by SEC^/3 The Chairman and the Chief Executive Officer or equivalent position in other names must not be the same person.
Corporate governance and internal control	The audit committee's duties and responsibilities must be clearly defined as specified by The Capital Market Supervisory Board^/3 Must demonstrate good corporate governance practice as specified by The Capital Market Supervisory Board^/3 and have a qualified audit committee as specified by SET Must maintain effective auditing and internal control systems as specified by The Capital Market Supervisory Board^/3
Conflicts of interest	Must have no existing or potential conflicts of interest as defined by The Capital Market Supervisory Board^/3.
Financial statements and auditors	Must ensure that financial statements have been prepared in accordance with The Capital Market Supervisory Board rules and regulations^/3. Must have an auditor approved by the SEC.
Provident fund	By the date the listing application is filed, the applicant has established a provident fund.
Registrar	Appoint TSD or an approved registrar by SET
Silent Period	Net Profit Approach The silent period extends for one year after listing. Those who meet the criteria for strategic shareholders are not allowed to sell their shares totaling 55% of paid-up capital after the IPO. They are permitted to sell 25% of the locked-up shares after 6 months. Infrastructure Business Approach The silent period extends for three years after the trading date. Those who meet the criteria for strategic shareholders are not allowed to sell their shares totaling 55% of paid-up capital after the IPO. Upon completion of 1 year period, they are permitted to sell 20% of the lock-up shares. Then, after every six months they are permitted to sell 20% of the locked-up shares.
	Market Capitalization Approach^/1 The specification shall be in accordance with the Market Cap Test criteria.
Opportunity Day	Net Profit Approach The company must organize a meeting to present and clarify the information about business and performance to shareholders, investors and related persons at least 1 time within the first year after having been listed in order to allow them access to relevant information and opportunity of raising queries to the management of the listed company. Market Capitalization Approach^/1 The specification shall be in accordance with the Market Cap Test criteria.

Remark:
^/1 The Additional regulations of listing ordinary shares in the Stock Exchange of Thailand (SET) by Market Capitalization Test - please visit Common Shares Listing Admission - General Listing for Common Shares

IPO price: the candidate applies for listing within a year from the last date of its IPO.
Fair price determined by financial advisor: the candidate applies for listing after a year from the last date of its IPO.

^/2 Free Floats are non-strategic shareholders. The strategic shareholders are;

Board of director, management, and related person
Shareholders held > 5% of paid-up capital and related persons.
Persons who has controlling power

^/3 Notification of the Capital Market Supervisory Board No. Tor Jor. 39/2559 Applications for Approval and Granting of Approval for Offering of Newly Issued Shares (Codified).
^/4 The definition of an Investment Company in accordance with the Notification of the Capital Market Supervisory Board, means investments in securities, derivatives or digital assets in one or more of the following manners at a collective total exceeding 40 percent of the total assets as per the most recent financial statements or the consolidated financial statements.

(1) Investments in shares in another company which is not, or will not become, a subsidiary or an associate, except for the investment in companies that cooperate or support businesses, or an affiliated company under the same parent company, or a network company that can demonstrate a policy or direction of cooperation or support for mutual operations.
(2) Investments with the objective of generating returns from increases in capital gain or other returns exempted investment in government bonds, debt instruments issued by the Ministry of Finance with an unconditional, full guarantee of principal and interest and units in money market funds or units in general fixed income funds.
The calculation of the proportion of such investments includes the investments in securities, derivatives or digital assets of subsidiary which is a non-financial institution and the investments in shares which are issued by an associate and engaged a non-financial institution.

Subject	The Stock Exchange of Thailand (SET)	Market for Alternative investment (mai)
Status	Must be a public limited company or corporation established under special law.
Paid-up Capital (After IPO)	≥ THB 100 million	≥ THB 50 million
Financial condition and liquidity	Total equity ≥ THB 800 million and total equity > 0 before apply the listing application. Must be in a stable and healthy financial condition and have sufficient working capital.	Total equity ≥ THB 100 million and total shareholder equity > 0 before apply the listing application. Must be in a stable and healthy financial condition and have sufficient working capital.
Track record	Profit Approach (Profit Test) Must have the operating results in accordance with the specified requirements and continuously until the date of approval for being listed securities At least 3 years of operating track record under at least one year of the same management prior to the application date Combined minimum net profits from operations of THB 125 million over the past two or three years, net profits from operations of THB 75 million for the latest full year, and an accumulated net profit in the latest period prior to the filing of an application	Profit Approach (Profit Test) Must have the operating results in accordance with the specified requirements and continuously until the date of approval for being listed securities At least 2 years of operating track record under at least one year of the same management prior to the application date. Combined minimum net profits from operations of THB 40 million over the past two or three years, net profits from operations of THB 25 million for the latest full year, and an accumulated net profit in the latest period prior to the filing of an application
	Market Capitalization Approach^/1
Distribution of minority shareholders or free float ^/2 (After IPO)	Issued shares in hands ≥ 1,000 shareholders	Issued shares in hands ≥ 300 shareholders
	Shareholding Ratio - Total shareholding ≥ 30% of paid-up capital, in case the paid-up capital is < Baht 300 million - Total shareholding ≥ 25% of paid-up capital, in case the paid-up capital is ≥ Baht 300 million but < Baht 3,000 million - Total shareholding ≥ 20% of paid-up capital, in case the paid-up capital is ≥ Baht 3,000 million - Each shareholder must hold at least 1 trading unit in accordance with the rule
Public Offering Approval	Must have been granted approval by the SEC (except for a company established under a special law). Offered through an underwriter Number of shares cumulatively offered for sale: - Offer for sale ≥ 20% of paid-up capital, in case the paid-up capital is < Baht 300 million - Offer for sale ≥ 15% of paid-up capital or value of the shares based on par value ≥ Baht 60 million, whichever is higher, in case the paid-up capital is ≥ Baht 300 million but < Baht 500 million. - Offer for sale ≥ 10% of paid-up capital or value of the shares based on par value ≥ Baht 75 million, whichever is higher, in case the paid-up capital is ≥ Baht 500 million
Directors and executives	Having the directors and management who are responsible for the management of subsidiary operating main business ≥ 1 years prior to listing application and continuously until the date of approval for being listed securities, except for the following events: (a) the Applicant is a financial institution of which the regulatory agency has otherwise prescribed rules in relation to directors and management; or (b) the Operating Core Business Company has an investment in a project which is a Basic Public Utilities that is beneficial to Thailand;
Nature of Business Operation	No operations are conducted in the manner of an investment management business (Investment Company) as prescribed under the Notifications of the Capital Market Supervisory Board ^/3/4. Holding Company must hold shares in at least 1 Subsidiary Operating Core Business which generates main profit as of the date of the submission of application for at least 3 years from the commencement date of trading on the Exchange, whereby Such Subsidiary Operating Core Business must not be a Listed Company ; and Be able to prove that the Applicant is the Person who has Controlling Power or has the power to manage such Subsidiary Operating Core Business according to its shareholding proportion In case the Subsidiary Operating Core Business is established under foreign laws, such subsidiary shall have directors residing in Thailand pursuant to the rules prescribed in the Notification of the Capital Market Supervisory Board.
Management and control personnel	Board of directors and Management must hold qualifications accordingly ; Not have any characteristics prohibited by The Capital Market Supervisory Board^/3 Board of directors and Management and control personnel must not have any characteristics prohibited by SET regulations that may affect an investor’s rights or decision, or a change of share price. The Board of Director’s duties and responsibilities must be clearly defined as specified by The Capital Market Supervisory Board^/3 The person taking the highest responsibility in finance and accounting (Chief Financial Officer: CFO) and the person supervising accounting (Chief Accountant) have to meet the qualifications specified by SEC^/3 The Chairman and the Chief Executive Officer or equivalent position in other names must not be the same person.
Corporate governance and internal control	The audit committee's duties and responsibilities must be clearly defined as specified by The Capital Market Supervisory Board^/3 Must demonstrate good corporate governance practice as specified by The Capital Market Supervisory Board^/3 and have a qualified audit committee as specified by SET Must maintain effective auditing and internal control systems as specified by The Capital Market Supervisory Board^/3
Conflicts of interest	Must have no existing or potential conflicts of interest as defined by The Capital Market Supervisory Board^/3.
Financial statements and auditors	Must ensure that financial statements have been prepared in accordance with The Capital Market Supervisory Board rules and regulations^/3. Must have an auditor approved by the SEC.
Provident fund	By the date the listing application is filed, the applicant has established a provident fund.
Registrar	Appoint TSD or an approved registrar by SET
Silent Period	Net Profit Approach The silent period extends for one year after listing. Those who meet the criteria for strategic shareholders are not allowed to sell their shares totaling 55% of paid-up capital after the IPO. They are permitted to sell 25% of the locked-up shares after 6 months. Infrastructure Business Approach The silent period extends for three years after the trading date. Those who meet the criteria for strategic shareholders are not allowed to sell their shares totaling 55% of paid-up capital after the IPO. Upon completion of 1 year period, they are permitted to sell 20% of the lock-up shares. Then, after every six months they are permitted to sell 20% of the locked-up shares.
	Market Capitalization Approach^/1 The specification shall be in accordance with the Market Cap Test criteria.
Opportunity Day	Net Profit Approach The company must organize a meeting to present and clarify the information about business and performance to shareholders, investors and related persons at least 1 time within the first year after having been listed in order to allow them access to relevant information and opportunity of raising queries to the management of the listed company. Market Capitalization Approach^/1 The specification shall be in accordance with the Market Cap Test criteria.

IPO price: the candidate applies for listing within a year from the last date of its IPO.
Fair price determined by financial advisor: the candidate applies for listing after a year from the last date of its IPO.

^/2 Free Floats are non-strategic shareholders. The strategic shareholders are;

Board of director, management, and related person
Shareholders held > 5% of paid-up capital and related persons.
Persons who has controlling power

^/3 Notification of the Capital Market Supervisory Board No. Tor Jor. 39/2559 : Applications for Approval and Granting of Approval for Offering of Newly Issued Shares (Codified).

^/4 The definition of an Investment Company in accordance with the Notification of the Capital Market Supervisory Board, means investments in securities, derivatives or digital assets in one or more of the following manners at a collective total exceeding 40 percent of the total assets as per the most recent financial statements or the consolidated financial statements.

(1) Investments in shares in another company which is not, or will not become, a subsidiary or an associate, except for the investment in companies that cooperate or support businesses, or an affiliated company under the same parent company, or a network company that can demonstrate a policy or direction of cooperation or support for mutual operations.
(2) Investments with the objective of generating returns from increases in capital gain or other returns exempted investment in government bonds, debt instruments issued by the Ministry of Finance with an unconditional, full guarantee of principal and interest and units in money market funds or units in general fixed income funds.
The calculation of the proportion of such investments includes the investments in securities, derivatives or digital assets of subsidiary which is a non-financial institution and the investments in shares which are issued by an associate and engaged a non-financial institution.

Listing procedure in the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (mai)

Related Regulations

SET’s regulations

Bor.Jor./Ror.01-00 Regulation of the Stock Exchange of Thailand: Listing of Ordinary Shares or Preferred Shares as Listed Securities B.E. 2558 (2015)

Tor.Mor./Ror.01-00 Regulation of the Stock Exchange of Thailand: Listing of Securities, Disclosure of Information and Delisting of Securities in the “Market for Alternative Investment (mai)” B.E. 2563 (2020)

Bor.Jor./Por.11-00 Regulation of the Stock Exchange of Thailand Re: Rules, Conditions and Procedures Governing the Disclosure of Information and Other Acts of a Listed Company B.E. 2560 (2017)

Notification of the Board of Governors of the Stock Exchange of Thailand Re: The regulations of listing ordinary shares in the Stock Exchange of Thailand (SET) by Market Capitalization Test for Target group of industries B.E 2566

Bor.Jor (Wor) 2/2024 Re: Revision to the rules of the Stock Exchange of Thailand to enhance supervision of listed companies and disclosure of information

Bor.Jor (Wor) 5/2024 Re: Revision to the Rules of Investment Company

Notification of the Capital Market Supervisory Board No. Tor Jor. 39/2559 : Application for Approval and Granting of Approval for Offering of Newly Issued Shares (Codified)

Notification of the Securities and Exchange Commission Kor Jor.17/2551: Determination of Definitions in Notifications relating to Issuance and Offer for Sale of Securities

Notification of the Securities and Exchange Commission Board No. Sor Jor. 33/2566: Consideration of the size of the company in respect of allowing a holding company (a company engaged in holding shares in other companies) for newly issued shares.

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User Manual of DIPO : Preparation for top 10 and minority shareholders

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The preparation of self-assessment documents for specified industries (Self-Assessment)

Manual providing guidance for the consideration of companies dealing in specified industries - New Economy

Manual covering applicants’ qualification – New Economy

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