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Obtaining Foreign Business License in Thailand

Obtaining foreign business license in Thailand with ease and efficiency.

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Thai Foreign Business License Act (FBA)

Foreign companies seeking to operate in Thailand must navigate the legal framework outlined in the Thai Foreign Business License Act (FBA) B.E. 2542. This legislation is crucial for foreign entities as it dictates the types of businesses they can engage in within the country. Before applying for a thailand foreign business license, companies need to examine the FBA to ensure compliance with Thai law carefully.

What is the Process of Obtaining a Thai Foreign Business License (FBL)?

Foreign investors looking to operate a business, under foreign ownership in Thailand must obtain a foreign business license prior to commencing business activities. The application for the license must be submitted to the Department of Business Development, with all necessary documents. Once approved, the license issued is valid for up to five years.

Foreign companies must apply for a Foreign Business License under the Foreign Business Act in Thailand. The license issued under this act is restricted to foreign nationals and foreign shareholders. Any foreign business found operating a business in Thailand without the proper license can be punished by a court.

Foreign nationals under Thai law are prohibited to foreigners from engaging in business activities that are restricted to foreign nationals. A juristic person registered in Thailand must have a foreign business license prior to the commencement of a business operation.

Foreign companies seeking to operate in Thailand must navigate the legal framework outlined in the Thai Foreign Business License Act (FBA) B.E. 2542. This legislation is crucial for foreign entities as it dictates the types of businesses they can engage in within the country. Before applying for a thailand foreign business license, companies need to examine the FBA to ensure compliance with Thai law carefully.

The FBA categorizes foreign business activities into three lists, each with its own set of restrictions:

List 1: Restricted Businesses / Businesses Strictly Not Permitted to Foreigners

This list comprises businesses that are strictly off-limits to foreign entities. Any attempts by foreigners to engage in these activities without proper authorization are prohibited.

These List 1 business activities include:

  • news business,
  • radio/television business, farming,
  • forestry and timber conversion,
  • extracting Thai herbs, fisheries,
  • trading in Thai antiques,
  • Buddha images/castings,
  • and trading in land.

List 2: Businesses Related to National Safety or Security, Arts, Culture, Traditions, Customs, Folklore, Handicrafts, or Natural Resources and the Environment

Businesses falling under this category have a direct impact on national safety or security, as well as cultural and environmental aspects. Permission from the Cabinet is required for foreign companies to operate in these sectors.

These List 2 business activities are divided into three broad groups, as follows:

  • Group 1 – Businesses concerning national security or safety;
  • Group 2 – Businesses that could have an adverse effect on arts and culture, customs, and native manufacturing/handicrafts; and,
  • Group 3 – Businesses that could have an adverse effect on natural resources or the environment.

List 3: Businesses in Which Thai Nationals Are Not Ready to Compete with Foreigners

This list includes businesses where the Thai government believes local competition may be adversely affected by foreign involvement. Permission from the Director-General of the Commercial Registration Department (CRD) is necessary for foreign entities to engage in these activities.  These business activities are only allowed to be performed by a foreign majority owned company once they have obtained a Thailand Foreign Business License from the CRD, which typically takes approx. 4 to 6 months to process.

These List 3 business activities consist of the following:

  • Rice milling and flour production from rice and plants.
  • Fisheries, specifically breeding of aquatic creatures.
  • Forestry from re-planting.
  • Production of plywood, veneer, chipboard or hardboard.
  • Production of lime.
  • Legal services.
  • Construction, except:
  • Construction of infrastructure in public utilities or communications requiring tools, technology or special expertise in such construction, except where the minimum foreign capital is 500 million baht or more.
  • Other construction, as prescribed in regulations.
  • Agency or brokerage, except:
  • Brokerage or agency of securities or service related to future agricultural commodities futures or financial instruments or securities.
  • Brokerage or agency for the purchase/sale or procurement of goods or services necessary to production or providing services to affiliated enterprises.
  • Brokerage or agency for the purchase or sale, distribution or procurement of markets, both domestic and overseas for the distribution of products made in Thailand, or imported from overseas in the category of international business, with minimum foreign capital of not less than 100 million baht or more.
  • Other brokerage or agency activities, as stipulated in ministerial regulations.
  • Auctioneering, except:
  • Auctioneering in the manner of international bidding, not being auctions of antiques, ancient objects or artifacts that are Thai works of art, Thai handicrafts or antique objects, or with Thai historical value.
  • Other types of auctioneering, as stipulated in ministerial regulations.
  • Domestic trade in local agricultural products not prohibited by law.
  • Retailing all categories of goods having of less than 100 million baht capital in total or having the minimum capital of each shop of less than 20 million baht.
  • Wholesaling, all categories of goods having minimum capital of each shop less than 100 million baht.
  • Hotel operation, excluding hotel management.
  • Sale of food and beverages.
  • Planting and culture of plants.
  • Other services, except those prescribed in the ministerial regulations.

 

What are the Benefits of Obtaining a Foreign Business License (FBL)?

The benefits of obtaining a Foreign Business License (FBL) for a Thai company are numerous. This license allows foreign companies to engage in business activities under a list of restricted business activities in both domestic and foreign markets.

The majority of foreign shareholders and foreign directors can operate the business in Thailand unless discharged for a period of five years prior to the date of the application.

In Thailand, the foreign business license process involves applying for the Foreign Business Certificate through the Foreign Licensing Department.

The license can be revoked within the period of not less than five years if the company is ordered to pay a fine or imprisoned by a court due to an offence under the Thai Foreign Business Act or under the notification of the National Executive Council.

Foreign Business License Application Process, How AO Can Help.

If you’re considering establishing a new company in Thailand, AO team can guide you through the process. We ensure that your company is set up promptly and in full compliance with the applicable legal requirements.

And with a thorough understanding of the Foreign Business Act and related regulations, our experts at AO can provide the necessary support to streamline your company’s establishment in Thailand, making the journey more transparent and less challenging for foreign businesses.

Want to consult about Your Corporate Services? Contact us

We have specialist team ready To get started for you. 

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Chuanpit Ngamsanga

Senior Legal Director

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Khun Chuanpit is a Certified Lawyer and Notary Public who heads our legal services team that assists our clients in ensuring proper corporate set-ups and legal compliance. She joined AO in 2012 and holds her law degree from Ramkhamhaeng University. She also has an MBA from the University of Waikato in New Zealand and an Accounting Bachelor’s degree from Srinakarinwirot University.‍

Khun Chuanpit plays a key role in assisting clients with company formation and registration of business licenses and BOI applications. She also handles our clients’ corporate secretarial, visas and work permits, ongoing BOI compliance and other regulatory reporting.

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The Most Frequent Questions

 The Thai Foreign Business Act regulates specific business activities that are either prohibited to foreigners or require a foreign business license to operate in Thailand.

The process of obtaining a foreign business license in Thailand involves submitting an application to the Foreign Business Committee, which is the authority responsible for granting such licenses.

Foreign ownership is restricted in certain business sectors in Thailand, and it is important to comply with the regulations to avoid any offences under the Thai Foreign Business Act.

If you have more questions?

Certain business activities are strictly prohibited to foreigners unless they have been granted permission by the Thai authorities through specific announcements or regulations.

No, foreigners are prohibited from operating certain business activities in Thailand without obtaining the necessary foreign business licenses or permissions.

Yes, there are certain business sectors in Thailand where foreigners are allowed to operate without facing restrictions under the Thai Foreign Business Act.

Engaging in business activities that are prohibited to foreigners can result in severe penalties, including legal actions taken against the individuals or entities involved.