Open for Business: Thailand Allows Foreigners to Operate More Businesses

An amendment to Thailand’s Foreign Business Act permits foreigners to operate certain types of “service businesses” that were previously prohibited to non-Thais without formal endorsements and foreign business licenses.

The Thai business attorneys at Chinant and Leeds have been helping international clients with setting up business in Thailand since 1997.

Thailand’s Foreign Business Law expressly bars non-Thai nationals and non-Thai majority-owned companies from operating a broad range of protected business activities that are reserved for Thai nationals only. The Foreign Business Law Amendment, issued in March 2013, removed protections from specific segments of service business activities, allowing foreigners to pursue those business activities specified in the amendment without first needing to obtain a foreign business license.

This year, Thailand’s Ministry of Commerce will propose further amendments to the FBA that would remove the protected status of even more business activities listed in the FBA, according The Nation.

Read the full Thai Foreign Business Laws Amendment overview.

Read the Thailand Foreign Business Act Amendment English translation.

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The Foreign Business Act 1999  regulates the business activities of foreigners in Thailand. The act classifies business activity into three categories and places restrictions of various degrees of severity on foreign ownership and operation of these businesses.

Thailand Business Lawyer 

Chaninat and Leeds specialize in Thailand Business Law 

Although it is possible to obtain an alien business license or American firms have the benefit of setting up an amity company, many foreigners choose to form a Thai majority company, that is a company where more than 50% of the shareholders are Thai, so that they are able to operate a business in a category that is restricted to foreigners. The formation of a Thai majority company generally requires less registered capital and less paperwork than the formation of a foreign company.  Until recently, these companies were also under less scrutiny than foreign companies.  A Thai majority company can also buy land.

A Thai nominee shareholder is a shareholder in name only; in actuality, nominee shareholders lack a real financial stake or interest in the company.  The practice of nominee shareholders is illegal.  The prohibition is found in the Foreign Business Act, the Land Act and other laws.  It is a criminal offense often with significant penalties including fines and imprisonment . 

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