A Foreign Business License (FBL) in Thailand can be awarded to a foreign company (majority of the company's shares are owned by non-Thai nationals) or foreign investors that wish to operate a business that is normally restricted to foreign nationals under Thai Law. If a foreign company would like to apply for a Foreign Business License, it must first check the "Foreign Business Act" to verify if the business type that they wish to operate is permitted by Thai Law.
Some business sectors are wholly reserved for Thai nationals. However, under the Thailand/United States Treaty of Amity and Economic Relations, American citizens and businesses incorporated in the United States or in Thailand, are allowed to engage in such businesses just as would someone of Thai nationality. In other words, under this treaty, American nationals are allowed to maintain the majority of their company's shares.
Foreign investors, foreign shareholders, and foreign-owned businesses can apply for a Foreign Business License at the Foreign Licensing Department of the Thai Ministry of Commerce. The total minimum capital requirement for the formation of such a company in Thailand is THB 2 million. It is worth mentioning that the process of obtaining a Foreign Business License (FBL) is often expedited if a Thai BOI approval has been obtained.
According to the Foreign Business Act B.E. 2542 (FBA), there are 3 types of restricted business activities:
Businesses strictly not permitted to foreigners
Businesses related to national safety or security or having an impact on arts, culture, traditions, customs and folklore, handicrafts, or natural resources and environment
Businesses in respect of which Thai nationals are not yet ready to compete with foreigners
Activities that fall under List 1 are strictly prohibited to foreigners. Businesses specified in List 2 are prohibited to foreigners unless permission is granted by the Cabinet. Businesses that are covered by List 3 are prohibited to foreign nationals unless permission is granted by the Director-General of the Commercial Registration Department ("CRD").
Under Section 16 of the Foreign Business Act:
A foreigner intending to apply for a foreign business license must have the qualifications and must not be under prohibitions as follows:
(1) being of not less than twenty years of age;
(2) having a residence in the Kingdom or having been permitted to enter the Kingdom temporarily under the law on immigration;
(3) not being an incompetent or a quasi‐incompetent person; (4) not being a bankrupt;
(5) not having been punished by a court judgment or ordered to pay a fine in settlement of any offence under this Act or under the Notification of the National Executive Council No. 281, dated 24th November B.E. 2515 (1972), unless having been discharged for a period of not less than five years prior to the date of the application for the licence;
(6) not having been imprisoned by a court judgment for offences of cheating, cheating creditors, misappropriation or offences related to trade under the Penal Code or the offences related to loans fraudulent to the public or the offences under the law on immigration, unless having been discharged for a period of not less than five years prior to the date of the application for the licence;
(7) not having had a licence issued under this Act or under the Notification of the National Executive Council No. 281, dated 24th November B.E. 2515 (1972) revoked within the period of five years prior to the date of the application for the licence.
Generally, application process for a Thai Foreign Business License is very lengthy and complex. It may take a minimum of 4 months merely to receive a decision on the application. For these reasons, Juslaws & Consult strongly suggests that you or your company consult our Law Firm before you apply for such a license.
Juslaws & Consult has been assisting foreigners in applying for the FBL License for many years; we have deep knowledge of the process, required documents, and other prerequisites. Regardless of whatever kind of business operations you have - whether it's hotel management services, accounting services, an advertising business, or a hotel business, even engineering services - we offer valuable legal services to any juristic person wishing to open a business in Thailand, or to establish a Thai limited company.
We advise you to consult with a lawyer if you are interested in applying for the FBL, since some supporting documents and presentations require careful planning. Our FREE first consultation will show you what exactly is involved before you embark on such a process. Moreover, we may be able to offer alternative suggestions which can be an even better fit for you or your Thai company.