A Beginner’s Guide to Foreign Business License in Thailand

A Beginner’s Guide to Foreign Business License in Thailand

Thailand’s business regulations reserve some rights for Thai nationals only. Hence, foreign entrepreneurs and investors may encounter certain limitations when doing business in the country. The Foreign Business Act or FBA, which was enacted back in 1999, governs business activities operated by foreign nationals and establishments.

A Beginner’s Guide to Foreign Business License in Thailand

A Foreign Business License or FBL is given to foreign investors or foreign companies (where foreigners own the majority of the company’s shares) that wish to open a business in Thailand. Normally, these investors or companies are not permitted to do so under Thai law. This article guides you through the essential things you need to know about Foreign Business License in Thailand.

Who are considered foreigners according to the Thailand Foreign Business Act?

Section four of the Foreign Business Acts describe a foreigner as the following:

  1. A natural person who is not the country’s national
  2. A juristic person who is not registered in the country
  3. A juristic person who registered in the country, and fits the following description
    1. Being a juristic person with half or more of capital shares owned by persons under (I) or (II) or a juristic person wherein the persons under (I) or (II) has placed investment in the amount of at least equivalent to the total capital’s one half;
    2. Registered ordinary or limited partnership having the person under (I) as the manager or managing partner
  4. A juristic person registered in the country with half or more of its capital shares owned by persons under (I), (II) or (III), or a juristic person wherein the persons under (I), (II) or (III) has placed investment in the amount of at least equivalent to the total capital’s one half

Nonetheless, foreigners who intend to apply for an FBL should meet the required criteria and are not prohibited from applying under FBA’s Section 16. Here are the basic requirements:

  • They should not be less than twenty years old
  • They should have a residence in the country and are allowed to enter the country temporarily per the immigration law
  • They are not incompetent or quasi-competent
  • They are not bankrupt
  • They have not been penalized by a court judgment or commanded to pay a fine to settle any offense per this Act or the Notification of the National Executive Council No.281 unless they have been discharged for no less than five years before applying for the FBL
  • A court judgment has not jailed them because of offenses for cheating, cheating creditors, offenses or misappropriation related to trade per Penal Code, offenses related to public loans fraudulent and offenses under the immigration law, unless they have been discharged for no less than five years before applying for the FBL
  • Their licenses, if any, that this Act or the Notification of the National Executive Council No.281 issued, has not been revoked within five years before applying for the FBL

What are the restrictions under the Foreign Business Act?

There are three types of business activities provided for under the FBA, including:

  • List 1, which include businesses not allowed to foreigners
  • List 2, which include businesses allowed to foreigners but under certain conditions
  • List 3, which include businesses not yet allowed to foreigners

All three types of business restrictions are subject to limitations the FBA imposes, which include the following:

  • Business activities which fall under List 1 are not permitted to aliens
  • Business activities under List 2 are not permitted to aliens unless the Cabinet grants permission
  • Business activities under List 3 are not permitted to aliens unless the Commercial Registration Department’s Director-General grants permission.

Therefore, foreigners who wish to start a business in Thailand should only engage in business activities that fall under List 2 and List 3 of the FBA. Also, they need to get an FBL from relevant authorities before running their business.

How to apply for a Foreign Business License in Thailand?

The process of FBL application in Thailand is generally complex and time-consuming. Typically, it will take at least four months to get the license. Foreigners have to apply to the Business Department. The Foreign Business Committee or Cabinet will then review the application, as the case may be.

The impact of the proposed business operation is measured across various criteria, such as its pros and cons to the country’s economic progress, social development, safety and security, and local employment rate. The application is more likely to be approved if the authorities view the business as giving considerably more advantages and promote the country’s interests. 

Seeking advice from competent company registration in Thailand

To ensure streamline and legally compliant company registration in Thailand for foreign entrepreneurs and investors, they should hire professional company registration services provider to register a Thai company. When selecting a company incorporation services agency, consider the agency’s reputation, years of experience, industry expertise, additional services, and pricing model.

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