and Legal Guide
The Foreign Business Act (1999)
The Foreign Business Act (1999) restricts business activities for foreigner ownership or “Alien”
(a company where foreigners hold a majority of voting right) into 43 categories. 4 3 categories are divided into 3 Schedules.
The Foreign Business Board must review the businesses listed in the Schedules at least once a year and propose any necessary changes to the Minister of Commerce. The Ministry of Commerce has issued ministerial regulations which exempted certain service businesses from the restricted activities under Schedule Three of the FBA.
Foreigners who have been granted exemptions from the FBA will instead be required to obtain a Foreign Business Certificate as evidence of the exemption.
• foreigners operating a business under the protection of a treaty to which Thailand is a signatory
1. Treaty protection
• foreigners who engage in regulated businesses with the permission of the Thai government for a specified duration
2. Government's permission for a specified duration
• foreigners operating a business under a treaty imposing obligations to which Thailand conforms, even though Thailand is not a signatory
3. Treaty imposing obligations
• foreigners who have been granted investment promotion from the Board of Investment (“BOI”) or permission to operate industrial or export businesses by the Industrial Estate Authority of Thailand (“IEAT”) for businesses in Schedules Two or Three
for Processing Foreign Business License Applications The Cabinet (for businesses in Schedule Two) or the director-general (for businesses in Schedule Three), must complete consideration of an application for a Foreign Business License within 60 days from the date of receipt. If the cabinet, in a case of necessity, is unable to complete its consideration within such period, it may be extended as necessary but shall not exceed a further 60 days
under the Foreign Business Act Thai or foreign nationals who violate the provisions of the FBA, which include nominee structures used to avoid the law, are subject to imprisonment for a term not exceeding three years or to a fine of THB 100,000 up to THB 1,000,000, or both. A Thai court may also order the violating entity to cease its operations. Any violation of a court order in this regard shall be subject to a daily fine of THB 10,000 to THB 50,000.
on Foreign Participation in Specific Sectors In addition to the FBA, several statutes impose conditions of majority ownership and management by Thai nationals for specific business sectors, as described below. Specific regulations for some businesses, such as hotels and pharmaceuticals, require that the holder of the operating license be an individual Thai national.
the Civil and Commercial Code, Book III, Title XXII (the law on partnerships and private limited companies);
the Public Limited Companies Act;
the Trade Associations Act;
the Chambers of Commerce Act;
the Act Prescribing Offences relating Registered Partnerships, Limited Partnerships, Limited Companies, Foundations and Associations (commonly referred to as the Corporate Offences Act);
the Commercial Registration Act;
the Accounting Act;
the Accounting Professions Act; and
the Foreign Business Operations Act (the “FBA”)
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