Key takeaways
- The Foreign Business Act excludes foreign ownership of certain types of business.
- Companies can apply for Board of Investment Thailand privileges that will allow for 100% foreign ownership.
- The Treaty of Amity permits 100% company ownership by US citizens in most sectors.
Thailand as a place for doing business
Strategically located in South-East Asia, Thailand is a key hub for foreigners looking to establish a business. With developing infrastructure and a strong pro-business sentiment, Thailand has experienced an abundance of foreign businesses opening in the country.
When establishing a business in Thailand, foreign business owners are keen to understand how they can structure their business to ensure full ownership.
This article will provide a succinct overview of how some foreigners can achieve 100% full ownership of their business in Thailand.
Thailand’s Foreign Business Act
The Foreign Business Act, B.E. 2542 (1999) (FBA) divides types of business activities into three categories.
- List One: Businesses not permitted for foreigners to operate due to special reasons.
- List Two: Businesses related to the national safety or security or affecting arts and culture, tradition, folk handicraft or natural resources and environment.
- List Three: Businesses which Thai nationals are not yet ready to compete with foreigners.
Each category has different limitations with regards to foreign ownership. The regulations govern the level of foreign ownership (if any) and operations of the business.
According to Section 4 of the FBA, a foreigner is defined as follows:
A foreigner is a natural person who is not or not anymore of Thai nationality and a juristic person not incorporated in Thailand.
Types of business that are included on List One of the FBA cannot be owned by foreigners. List Two related businesses can be owned by foreigners if Thailand’s Minster of Commerce and the Cabinet have granted approval. Businesses on List Three can be owned by foreigners if various approvals from related agencies have been granted.
For a full overview of the Lists, please see a link to the FBA. The relevant Lists can be found on pages 18–21.
If a foreigner would like to own a business listed in the FBA, they must obtain a Foreign Business Licence (FBL). To apply for an FBL, the company must submit an application and all necessary documents to the Foreign Business Committee.
Board of Investment Thailand promotion
Established in 1966, the Thailand Board of Investment’s (BOI) core mission is to promote investment in Thailand by offering both tax-based and non-tax-based incentives to foreign investors.
The BOI provides various tax and non-tax-based incentives to foreign businesses, including:
- The ability of foreign companies to own land.
- The potential for 100% foreign ownership.
- A reduction in the requirements for work permits and visas.
- Tax-based incentives to encourage further investment.
The Treaty of Amity
For those holding US citizenship, the Treaty of Amity is a potential avenue for 100% foreign ownership.
Companies with US-majority ownership are eligible to conduct business in Thailand without needing to seek an FBL or privileges granted by the Thailand BOI.
It should be noted that there are some restrictions in place prohibiting ownership in some sectors, including:
- Transport
- Communications
- Fiduciary functions
- Banking concerning depository functions
- Trade in agricultural products indigenous to Thailand
- Exploitation of land or other natural resources
How can WSR international help your business?
Are you ready to take that first step to obtaining 100% foreign ownership of your business in Thailand? If so, contact WSR International who can you help you every step of the way.
With business and legal experts located in both Bangkok และ Phuket, WSR International are perfectly situated to assist you.
If you would like to discuss the contents of this article in further detail, please do not hesitate to reach out to the business and legal experts at WSR International.
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WSR International Co., Ltd.
Chartered Square Unit 16-05, 152 North Sathorn, Khwaeng Silom, Khet Bang Rak, Bangkok 10500 VAT Registration no: 0905565001881
Phone: 6692 616 4423
Email: info@wsrlawgroup.com
