Everything You Need to Know about the Foreign Business Act Thailand

Have you been told that you are not eligible to do a particular kind of business? Annoyed? Don’t be because clearly you may not be eligible under the Foreign Business Act in Thailand.  The FBA lists a range of business or industrial activities that foreigners cannot do without obtaining relevant license(s).

FBA describes foreigners as the following;

• a natural person who is not a Thai national;
• an unregistered juristic person in Thailand;
• registered juristic person in Thailand, with at least 50% of its share capital (or at least 50 per cent of the capital invested in it) held by the persons set out in 1 or 2 above and if a limited partnership or a registered ordinary partnership, the managing partner or manager is not a Thai national; or
• a juristic person registered in Thailand, with at least 50 per cent of its share capital (or at least 50 per cent of the capital invested in it) held by any of the entities set out in 1, 2 or 3 above.”

Additionally, following are the annexes explained about the business restriction for foreigners:

Annex 1

1. Newspaper publishing, radio or television broadcasting
2. Rice farming, arable farming or orchard farming
3. Rearing livestock
4. Forestry and the processing of wood from forests (naturally grown)
5. Fishery, only in relation to marine life in Thai waters and the specific economic zone
6. Extraction of Thai medicinal herbs
7. Trading and auctioning of Thai antiques or antiques which are of historical value to the country
8. Manufacture or casting of Buddha images and alms bowls
9. Trade in real property

Annex 2

Businesses that concern national safety and security or have an effect on arts, customs, culture and local handicrafts or natural resources 

1. Manufacture, distribution and maintenance of:

• firearms, ammunition, gunpowder and explosives
• components of firearms, ammunition and explosives
• weapons of war, ships, aircrafts or military vehicles
• accessories or components of all types of weapons of war

2. Domestic transportation by land, water or air, including aviation businesses

Business having an impact on the Thai art, culture, customs, local handicrafts

1. Trading of old objects or artifacts. Additionally, Thai works of art or handicrafts.
2. Manufacture of wood carvings.
3. Breeding silkworms. Additionally, manufacture of Thai silk thread, Thai silk weaving or printing.
4. Manufacture of Thai musical instruments.
5. Manufacturing products from gold, silver, bronze or lacquer.
6. Manufacture of crockery. Generally, it can be porcelain relating to Thai art and culture.

Businesses having an impact on the natural resources or the environment

1. Production of cane sugar.
2. Salt farming. Additionally, it can include the production of efflorescent salt.
3. Production of rock salt.
4. Mining. Additionally, it can include stone quarrying and crushing.
5. Wood processing for the manufacture of household furnishings. Additionally, it can manufacture utensils.

Annex 3

Importantly, businesses wherein Thais are not ready for competition with the Foreigners:

1. Rice milling and the manufacture of flour from rice and field crops.
2. Fishery, only in relation to the cultivation of marine life.
3. Forestry. Generally it refers to plantations.
4. Manufacture of plywood. Additionally, it can be manufacture of wood veneer, chip-board or hard-board.
5. Manufacture of lime.
6. Accounting services.
7. Legal services.
8. Architectural services.
9. Engineering services.

Obtaining Foreign Business License in Thailand

To do overseas business, an investor must first ask for authorisation. Moreover, the company can obtain a licence to run this business in one of three ways:
1. Firstly, submit an application for licence to conduct overseas business under LIST 3 articles (14) and (15) of the Foreign Business Act B.E. 2542. (1999).
2. Secondly, the company can conduct a business without a licence if it has a minimum capital (paid-up capital) of 100 million baht for each of its businesses. However, before beginning business, the corporation must notify the Foreign Business Department.
3. Thirdly, the Thai company must submit a letter of principle permission. Importantly, it must go to the foreign business department’s committee.

Finally, after all is complete, the committee will decide whether or not you can operate as a foreign company. Moreover, the corporation can transfer shares to a foreign stakeholder after receiving authorisation. However, the company must obtain licence to operate the business. Generally, the principle authorisation letter mentions that. However, a Foreign Business Department officer advises an investor to contact the Foreign Business Department’s headquarters (Sanam Bin Nam) to discuss the matter.

Subsequently, you may know all the regulations of the Foreign Business Act in Thailand. But, it can be difficult to find the right authorities for the relevant activities. Therefore, it is always wise to have proper legal counsel like Konrad Legal for obtaining a foreign business license in Thailand.