According to Thailand Foreign Business Act B.E. 2542 (FBA), there are three types of business activities that govern foreign participation in Thai commerce:
List 1: Business Not Permitted to Foreigners
List 2: Business Permitted to Foreigners under Conditions
List 3: Business Not Yet Permitted to Foreigners
Lists 1, 2, or 3 of the Foreign Business Act in Thailand essentially cover nearly all economic sectors with a few exceptions.
However, a recent Ministerial Regulation, issued on 13 June 2019, will open up certain types of services from foreign operators to its affiliates, which means that a Foreign Business License will not be required for a registered Thai company having majority foreign ownership.
Service businesses providing services to affiliates that do not require a Foreign Business License are as follows:
- Providing Domestic Loan Services
- Leasing Office Space with Utilities
- Consulting Services in the following:
- Human Resources; or,
- Information Technology
Juristic persons with the following characteristics are regarded as “affiliates”:
- juristic persons that have shareholder(s)/partner(s) who constitute more than half of the total number of shareholder(s)/partner(s) of each company transacting business together;
- juristic persons that have shareholder(s)/partner(s) who own 25% or more of the share capital of one juristic person (Company A) and also own 25% or more of the share capital of another juristic person (Company B) with which Company B is transacting business with Company A;
- a juristic person that owns 25% or more of the share capital of another juristic person (again, assuming the juristic persons are engaging in a transaction with each other); or
- juristic persons that have the same director(s)/partner(s) (who constitute a majority) with managerial authority. This characteristic would imply such persons have authorized director status under a Company Affidavit (for each company interacting in a transaction).
This article is for information purposes only and should not be relied upon as legal advice. For more information, please get in touch with John P. Formichella at email@example.com
© John P. Formichella