Foreign Business Legislation in Thailand

Updated on Saturday 06th August 2016

Foreign Business Legislation in Thailand Image
Foreign businesses are mainly governed by the Foreign Business Act (FBA) in Thailand, which regulates a wide variety of businesses, as well as commercial and industrial activities which cannot be undertaken by foreign investors, except if an applicable license has been issued or an exemption is applied. 

Categories of foreign companies in Thailand

The FBA in Thailand sets three categories for businesses. These categories are as follows:

•    Category One: these are businesses which are not available to foreign investors unless a specific exception is stated in a certain law or treaty;
•    Category Two: businesses owned by foreign investors which were opened before the enactment of the FBA. These types of businesses are allowed to continue their activities. Foreign investors, though, cannot open a company under this category unless a special permission is issued by the Minister with the agreement of the Cabinet;
•    Category Three: This type of businesses have similar characteristics with those from the Category Two, with the exception that the Alien Business License for new businesses opened by foreign investors is conferred with the Director General and a committee. Often times it has been registered that the authorities have issued licenses for such businesses only when they were convinced that their activities could not be entirely run by companies with the majority of shares owned by Thai citizens. Our lawyers in Thailand can offer more details on this matter. 

Application procedure for the Alien Business License in Thailand

Foreign investors who want to open businesses in Category 2 or 3 of the FBA in Thailand have to be issued an Alien Business License from the responsible governmental bodies before beginning their activities.

In order to obtain the Alien Business License, an application form has to be filed with the Commercial Registration Department, which will be evaluated by the Cabinet of Foreign Business Committee. The authorities are more likely to approve the Alien Business License when the business is considered to bring considerable benefits and when its activities are proven to protect and promote the interests of Thailand.

Our law firm in Thailand specializes in the Thai foreign business laws. If you are interested to open a foreign business in this country, please contact us for legal assistance. 

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