It is very common knowledge in the international business fraternity that foreign investors cannot start an agriculture business in Thailand. But, this is not always true. There are certain protocols abiding which foreign investors can invest in the agriculture business in Thailand. Additionally, they can do so by owning agricultural land in Thailand. This article will guide you through the norms and protocols that permit foreign investors to start an agriculture business in Thailand.
Normal Schedules for Foreigners on Starting Agriculture Business in Thailand
While schedule 1 of the restricted business for foreigners strictly prohibited agricultural activities like a plantation, rice farming, etc, schedules 2 and 3 may be an exception.
Schedule 2 includes businesses that are limited for foreigners can operate if obtain permission from the Cabinet. You (foreigner) may operate these businesses if Thai nationals or any legal person not considered foreigners under the FBA has shares of a minimum of 40% in the company. However, if there is a proper cause, the Minister of Commerce along with the approval of the Cabinet may lessen this proportion requirement. Then again, it must not be anything lesser than 25% plus the number of Thai directors must be at least two-fifths of the total number of directors. Almost 13 types of activities are there on this list.
On the other hand, schedule 3 includes businesses that are restricted to non-Thais, unless permission is obtained by the Director-General of the Department of Business Development. Business activities included on this list are;
- Cultivation, propagation of plant varieties; or
- Internal trade that is related to traditional agricultural products;
Schedules Permitting Foreigners to Start Agriculture Business in Thailand
According to the Land Code B.E. 2497 1954, foreigners, whether they be natural or legal persons, are not permitted to own any kind of land in Thailand, including agricultural land, unless they first obtain permission from government agencies (such as the Thai Board of Investment (BOI) or the Industrial Estate Authorities) in accordance with specific laws.
The Industrial Estate Authority of Thailand (IEAT) will often give authorization to industrial business operators who operate in an industrial estate region under IEAT control, including foreign majority-controlled enterprises.
Foreigners who want to perform Schedule 2 or 3 activities must apply to the Director-General asset in the Ministerial Regulations. However, whether the foreign business license will be granted depends on the impact the intended business will have on;
- National safety and security,
- Environmental preservation,
- Economic and social development,
- Public order or good morals,
- Conservation of natural resources,
- Technology transfer,
- Energy,
- Consumer protection,
- National values in art, culture, traditions, and customs,
- Sizes of undertakings,
- Employment,
- Research and development,
Once you apply, the result will be out in 60 days from the submission date. In case the application is approved by the Cabinet or the Director-General, then a foreign business license will be issued within 15 days.
