Foreign Business Act of Thailand

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The Foreign Business Act has created much upheavel in 2008 when changes had been made. Lets look at what defines an Alien in Thailand, the limitation of business ventures by foreigners and capital requirements under the FBA. Speak to a lawyer in Thailand for more changes to the laws of Thailand.

Under the FBA a foreigner is classified as an Alien and the definition of an Alien has been setup as follows:

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1. A natural person who is not of Thai nationality;
2. A juristic entity which is not registered in Thailand;
3. A juristic entity incorporated in Thailand with foreign shareholding accounting
4. A partnership or ordinary partnership whose managing partner is a foreigner.

 

In terms of capital requirements the FBA lists the minimum capital requirement for an alien business as follows:

The minimum capital is three million baht for business listed in the Act, and two million baht for businesses not listed in the Act. However, the minimum capital requirement shall not be imposed in case of reinvestment.

The FBA also lists in which catergories an Alien is not allowed to do business in. These are listed into 3 lists which the government has released and are as follows:

(List One) The Businesses not permitted for foreigners to operate in due to special reasons:

(1) Newspaper business, radio broadcasting or television station businesses.
(2) Rice farming, farming or gardening.
(3) Animal farming.
(4) Forestry and wood fabrication from natural forest.
(5) Fishery for marine animals in Thai waters and within Thailand specific economic zones.
(6) Extraction of Thai herbs.
(7) Trading and auctioning Thai antiques or national historical objects.
(8) Making or casting Buddha images and monk alms bowls.
(9) Land trading.

You will note in the above ‘land trading’ would be viewed as very possibly an estate agent. Speak to one of our attorneys if you are considering property trading in Thailand as a business venture.

(List Two) The Businesses related to the national safety or security or affecting arts and culture, tradition, folk handicraft or natural resource and environment.

Group 1 The businesses related to the national safety or security

(1) Production, selling, repairing and maintenance of:
(a) Firearms, ammunition, gun powder, explosives.
(b) Accessories of firearms, ammunition and explosives.
(c) Armaments, ships, air-crafts or military vehicles.
(d) Equipment of components, all categories of war materials.
(2) Domestic land, waterway or air transportation, including domestic airline business.

Group 2 The businesses affecting arts and culture, traditional and folk handicraft

(1) Trading antiques or art objects being Thai arts and handicraft.
(2) Production of carved wood.
(3) Silkworm farming, production of Thai silk yarn, weaving Thai silk or Thai silk pattern printing.
(4) Production of Thai musical instruments.
(5) Production of goldware, silverware, nielloware, bronzeware or lacquerware.
(6) Production of crockery of Thai arts and culture.

Group 3 The businesses affecting natural resources or environment

(1) Manufacturing sugar from sugarcane.
(2) Salt farming, including underground salt.
(3) Rock salt mining.
(4) Mining, including rock blasting or crushing.
(5) Wood fabrication for furniture and utensil production.

(List Three) The businesses which Thai national are not yet ready to compete with foreigners

(1) Rice milling and flour production from rice and farm produce.
(2) Fishery, specifically marine animal culture.
(3) Forestry from forestation.
(4) Production of plywood, veneer board, chipboard or hardboard.
(5) Production of lime.
(6) Accounting service business.
(7) Legal service business.
(8) Architecture service business.
(9) Engineering service business.
(10) Consturction, except for:
(a) Construction rendering basic services to the public in public utilities
(b) Other categories of consturction as prescribed by the ministerial regulations.
(11) Broker or agent business, except:
(a) Being broker or agent for underwriting securities or services connected with future trading
(b) Being broker or agent for trading or procuring goods or services necessary for production
(c) Being broker or agent for trading, purchaseing or distributing or seeking both domestic and foreign markets.

(12) Auction, except:
(a) Auction in the manner of international bidding not being the auction of antiques
(b) Other categories of auctionas prescribed by the ministerial regulations.

(13) Internal trade connected with native agricultural products or produce not yet prohibited
(14) Retailing all of goods having the total minimum capital less than 100 million Baht
(15) Wholesaling all categories of goods having minimum capital of each shop
(16) Advertising business.
(17) Hotel business, except for hotel management service.
(18) Guided tour.
(19) Selling food or beverages.
(20) Plant cultivation and propagation business.
(21) Other categories of service business except that prescribed

List One businesses are closed to foreigners for special reasons. They may operate a business in List Two only when they have acquired permission from the Minister of Commerce, with the approval of the Cabinet. Foreigners may operate businesses in List Three only after obtaining permission from the Director-General of the Commercial Registration Department, with the approval of the Committee.

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