Complete know-how about foreign business license in Thailand
Since Thailand is a fast growing economy and offers valuable advantages to its investors, it is obvious that foreigners from all over the world are looking forward to investing and set up different business projects in Thailand to make a good profit. But as every country has their rules and regulations when it comes to international investments, Thailand too, has laid down certain standards for acquiring a Thailand foreign business license.
What is a foreign business license?
The Foreign business license is an authorization (official document) issued by the government that allows foreign investors or companies to conduct business within their geographical control.
In Thailand, if you wish to own more than 49% of foreign ownership when you start up a business venture and if it falls under list 2 and 3 of the Foreign Business Act (FBA), 1999, then it is mandatory for you to apply for and obtain a license from the Foreign Licensing Department.
The process is often facilitated when the approval of Thai Board of Investment is obtained.
Though Thailand has a warm and welcoming attitude towards its investors, but they have also safeguarded the very essence and primary occupations of the Thai economic culture. Hence, there are three lists of activities in which foreign participation is either restricted or partially allowed.
It is strongly advised that all investors must go through the rules before planning and be investing in any business in Thailand. The following list will give you a brief idea about the FBA and its allowance and restrictions:
Business activities completely prohibited:
- Publication houses and broadcasting stations
- Trading of Thai land
- Trading and auctioning of Thai antiques
- Farming and fishing
List 2: Business activities that are restricted but can be allowed under special conditions:
- Any business that can disturb/alter the national safety or security- like manufacturing and trading any kinds of explosives, firearms, military vehicles, etc.
- Any business that affects the traditional art, cultures and folk handicrafts- like manufacturing and trading of Thai antiques, instruments, metal wares, etc.
- Business that can upset the natural resources or environment- like mining, manufacturing, and trading of agriculture production, household properties, etc.
List 3 consists of all sorts of businesses activities in which Thai nationals are not yet ready to compete like- forestry, accounting/legal services, etc; unless permitted by the Director-General and other committee members.
Generally, the procedure to apply for and obtain an FBL is complex and time-consuming, so it is best to take guidance and advice from a reputed legal firm.
- – A foreign business license is not required to be obtained if the company or investor wants to set up a venture which is not listed in FBA List 1, 2 or 3.