Entering the Southeast Asian market and successful negotiations with a Thai client is a significant step for any Ukrainian exporter or IT business. However, in the context of remote work and cross-border digital communication, business trust cannot be based solely on a high-quality corporate website, presentations, or promises in messengers.

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Before sending the first invoice, signing a contract, or starting work, it is critically important to conduct a basic commercial audit, known in international practice as Due Diligence. This preventive check is your main legal shield, protecting the business from fraudsters, fictitious companies, and prolonged problems with bank monitoring.

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Corporate register: does your partner really exist

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In today's digital world, it's easy to create the illusion of a successful, large-scale business: a bright corporate website, active executive profiles on LinkedIn, and polite sales managers can quickly lull any exporter's vigilance. However, a fundamental and inevitable step in structuring a deal is confirming the real legal status of your Thai counterparty.

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In Thailand, the only reliable, state, and indisputable source of such information is the electronic database of the Department of Business Development (abbreviated DBD), which operates under the country's Ministry of Commerce. To access this system, you do not need special permits, complex lawyer requests, or long waits — the DBD DataWarehouse+ portal is completely open for public search. The key to this array of data is the unique 13-digit company registration number (Registration Number / Tax ID), which a potential partner is obliged to provide to you without hesitation upon the very first commercial request, even before exchanging signed documents.

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With this number, you can conduct a deep legal x-ray of the business and dispel any marketing myths. The open register allows you to instantly check a basic but vitally necessary criterion — whether such a legal entity actually exists in nature, and whether it has the official "Active" status. Particular attention during the analysis of the extract should be paid to the date of incorporation. If you are negotiating a large-scale, long-term B2B contract or preparing to ship a large batch of goods, and the register shows that the company was created only a few weeks or months ago, this should raise reasonable suspicions about its reliability. In addition, the system displays the history of corporate changes: if a company regularly changes its name or legal address without obvious business reasons, international practice considers this a classic sign of instability or deliberate attempts to avoid financial responsibility to previous creditors.

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The most important financial indicator revealed by the DBD register is the current size of the authorised capital (Registered Capital) of the Thai company. In local corporate culture, this indicator plays a critical role because it demonstrates the business's real financial capacity, the founders' willingness to risk their own funds, and the legal limits of the company's liability. If during the check it turns out that you are planning to conclude a contract for the provision of IT services worth tens or hundreds of thousands of dollars, and the authorised capital of your Thai client is the legislative minimum or a suspiciously meagre amount, this is the very first and most serious Red Flag. Such a colossal gap between the scale of your future deal and the firm's declared assets indicates high risk and strongly suggests you are dealing with a transit structure.

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Ignoring these registry data inevitably leads to catastrophic commercial consequences for the Ukrainian exporter. If the state database shows that the company is in the process of forced liquidation, its status is suspended for failure to file annual tax returns, or it is a classic "shell company" without any financial history, signing any invoices or contracts with it is a step into the abyss. Cooperation with such toxic counterparties almost always ends with unpaid bills and wasted time. The worst part is that in the event of default, you will be completely deprived of the opportunity to effectively protect your commercial interests: even having won a lengthy and expensive international arbitration, you simply will not be able to collect the debt, since de facto there are no funds or property on the balance sheet of such a legal entity that the Thai enforcement service could legally levy execution upon.

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Director's affidavit: who has the real right to sign

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Even if the state register confirms that the Thai company is real, economically active, and has solid authorised capital, this does not automatically guarantee the commercial security of your transaction. The next, and from a legal point of view the most important stage of deep verification, is the indisputable confirmation of the corporate authority of the specific person with whom you are negotiating. In Thai business culture, which is based on maintaining hierarchy and delegation, it is extremely common for complex commercial negotiations to be conducted by a Senior Manager, operational head, or even a minority partner-cofounder. They can make promises, agree on detailed technical specifications, and discuss financial terms, but they technically and legally have no authority to sign financial obligations or commercial contracts on behalf of the corporation.

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In order not to become a victim of such exceeding of authority or a banal misunderstanding, you as an exporter must indisputably request a special official extract from the register from the Thai counterparty — a Company Affidavit / Certificate of Incorporation. A critical compliance nuance is the "freshness" of this document: in international legal practice, it must be issued by the state regulator (DBD) no later than one to three months before you conclude the deal. Corporate dynamics are very high; directors may resign, and their powers may be limited by the general meeting of shareholders, so last year's extract carries no practical protective value for you. This up-to-date document includes an exhaustive list of all current members of the company's board of directors, giving you a clear understanding of who really runs the business.

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However, the most important section of the affidavit, which you and your lawyers must study under a microscope, is the block in which the conditions regarding the Authorised Signatory are strictly and exhaustively spelt out. Thai corporate law is extremely flexible and allows companies to create complex risk management configurations. For example, the affidavit may clearly and unequivocally state that for any foreign economic contract to become legally valid, not just one signature is required, but the mandatory joint signature of exactly two specific directors (say, Director A and Director B), which must invariably be fastened with a Wet Company Seal. In other cases, authority can be divided by financial limits: one manager's signature may be valid only for transactions up to 10 thousand dollars, and anything above that limit requires a decision by the entire board of directors.

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If you ignore this fundamental nuance, the commercial consequences can become fatal for your project. Imagine a situation where your perfectly drafted software development contract is signed by only one director instead of the required two, or an unauthorised Project Manager with whom you communicated in a messenger affixes their autograph. From a legal standpoint, such a document is considered signed ultra vires (exceeding authority) and does not create any financial obligations for the Thai corporation. Such a contract or invoice will be declared legally void, it is guaranteed not to pass strict financial monitoring in a Ukrainian bank, and in case the client refuses to pay for the performed work, it will be impossible to collect the debt through international commercial arbitration, since de jure the Thai corporation never agreed on anything with you.

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Sanctions and financial compliance: protecting your funds in Ukraine

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The third, and from the point of view of preserving your working capital the most critical dimension of the check, is deep financial and sanctions compliance. This stage is designed to protect your corporate or entrepreneurial accounts in Ukraine from sudden, unexpected blocking. The geo-economic specifics are that the modern Thai market is an extremely dynamic, open, and highly liquid financial hub of Southeast Asia, where capital flows daily literally from all over the world. However, this same investment openness attracts money from high-risk jurisdictions, offshore zones, and states under international embargo.

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That is why the financial monitoring (AML/CTF) departments of Ukrainian banks, as well as their Western correspondent banks through which dollar or euro transactions are routed, study incoming export payments from the Asian region with extreme scrutiny, viewing them through the prism of increased money-laundering risk.

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If your servicing bank, during automated transaction verification or manual audit of a FEA contract, detects the slightest hint of toxicity, the consequences will occur instantly. For example, if the founder of the Thai company is a person or entity under international sanctions, or if the company itself appears on global lists of enterprises suspected of shadow financial operations, your cross-border payment will be automatically and strictly frozen in the transit account. This means you will not only lose your honestly earned fee for services rendered or goods shipped, but you also risk falling under close scrutiny by the domestic State Financial Monitoring Service as an entity cooperating with risky counterparties. Unblocking such funds can take months, will require hundreds of pages of explanatory documents, and often ends with a forced return of the payment to the sender, with a tangible loss of bank commissions.

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To avoid this infrastructural and financial collapse, you must act proactively. Therefore, before signing any commercial agreements and issuing the first invoices, it is necessary to conduct, independently or with the help of qualified lawyers, a thorough check not only of the Thai legal entity itself, but also of its Ultimate Beneficial Owners (UBO) — that is, the real physical persons who actually control the business. These individuals and the corporation itself must be passed through the sieve of key open international sanctions databases, in particular the consolidated lists of the US Office of Foreign Assets Control (OFAC), the consolidated sanctions lists of the European Union, and, obligatorily, the current lists of the National Security and Defense Council of Ukraine (NSDC). Only this level of deep, preventive sanctions compliance will let you be absolutely sure you are starting work with a reliable, legal, and transparent business, and that the funds you earn will pass all strict bank filters unhindered and be credited instantly to your entrepreneurial account.

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Working in the Southeast Asian market opens up colossal financial prospects, but it categorically does not tolerate legal frivolity. Conducting a deep background check of a counterparty is not a sign of personal distrust, but a standard requirement in the global corporate sector. Uncompromising commercial security depends on the timely implementation of comprehensive due diligence on foreign companies. This stage inevitably covers a deep analysis of the corporate structure, confirmation of the legality of the signatories' authority through official Thai state registers, and ensuring strict sanctions and bank compliance for the future transaction. Only a systematic, professional approach to auditing potential clients will allow you to reliably weed out fraudsters and "shell companies" at the negotiation stage, ensuring the construction of a safe legal architecture for the stable receipt of export earnings.

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Connect with TUCC

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Stay updated with the latest market insights, legal guides, and networking opportunities within the Thai-Ukrainian business corridor.

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Website: thaiukraine.org

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Email: info@thaiukraine.org

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LinkedIn: Thai-Ukrainian Chamber of Commerce