Do you want to get the Foreign Business License? Do you know what Foreign Business License is? We are here to help you provide the license. Business laws of Thailand maintain some regulations only for Thai nationals. The foreign investors have to experience many limitations when doing business in Thailand. For protecting the rights of foreign investors, Foreign Business Act of 1999 was introduced. Most of the people think Foreign Business Acts refers to business activities that are carried out by the foreigners. But the truth is that the Foreign Business Act of 1999 highlights the activities that are restricted for the foreigners.
A foreign company in Thailand is a firm that has the majority of non-Thai nationals as shareholders. There is some business that is not allowed to be owned by foreigners. These businesses are listed in the Foreign Business Act. In order to operate a business from the restricted category, you must obtain a Foreign Business License.
The Foreign Business License is often confused with Foreign Business Certificate. Though both of these are a form of approval to conduct restricted activities. The only difference is that they are applicable to different situations. In simple words, Foreign Business License is a permit. It lets foreign nationals to manage and do business in Thailand that is normally restricted to the foreign nationals.
Under the Foreign Business License, permission is granted to the foreigner to run a restricted business. On the condition that the business is beneficial for the economy and society of Thailand.
According to the Foreign Business Act, a foreigner is:
These foreigners cannot operate a business in Thailand without permission from the Thai Government. The foreigners who can do business in Thailand with the approval of Director General are:
However, if any foreigner deported or is staying in Thailand without permission is not allowed to operate any business. There are no exceptions, in this case, they cannot do business with permission as well.
Activities that are prohibited under the Foreign Business Act are divided into 3 categories. These are as follows:
Foreigners are restricted from operating following business in Thailand as these reflects the economic culture:
Categories 2 and 3 are shed a light onto the business that can be operated by foreigners. But permission is required in order to conduct these businesses. The reason is that they are related to national security or security that affects culture, arts, natural resources or local handicrafts.
In order to conduct business from the list, you must get permission from the Ministry of Commerce.
The list includes:
If a foreigner wants to operate a business from the category 2 then 40% of the capital must be invested by Thai national. The Foreign Business Act indicates that if there is a cause then the Minister can reduce the requirement. But this cannot be lower than 25%.
This category is the list of businesses that Thai’s are not yet ready to compete in with foreigners. They include:
When starting a business the initial capital for the business operation must not be less than agreed by the Ministerial rules. It should not be less than 2 million Baht in any case. The guidelines also mention the time period in which the capital must be brought and send into Thailand.
Moreover, these requirements must not be fulfilled if the money is obtained from the business that has been running in Thailand. The Minster with the recommendations from the committee is authorized to provide ministerial rules. These rules must suggest other conditions for the foreign licenses to follow.For instance, these requirements can mention the proportion of the capital and loans can be used in business.
According to Foreign Business Act, the Foreign Business License can be canceled or delayed by the conditions are not met or fulfilled. Following are the requirements for Foreign Business License that must be met:
For the industry of banking, finance, and insurance, 75% of the shareholders must be Thai. A business that is involved in local shipping, they must have 70% of Thai shareholders.
First, of an application should be filed with the Commercial Registration Department. This application will be then viewed by Foreign Business Committee. When they review the application, different criteria is used like whether it will be beneficial for the country or not. When these authorities view the business as beneficial for Thailand, the application has more chances of approval.
The process of getting approval from the Ministry of Commerce or director General is a complex process. Along with this, it is one of the most administrative procedure that must be carefully followed. The application procedure sometimes can be time-consuming and have unpredictable outcomes that increase the chance of rejection. In case any foreigner is caught committing any crime, the penalties are very high. It even includes imprisonment. In order to avoid this, you need the expertise of the best legal counsel. Our legal team has been working in this field for a very long time and is the right option for you.
Therefore, running a business in Thailand is complex and involves numerous rules. Before, investing in Thailand it is better to consult with our legal experts.
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