It is typically regulated by the Foreign Business Act (FBA), 1999 that is enacted by the Chaun Leekpai –controlled National Legislative Assembly of Thailand, which limits foreign ownership of a few Thai industries. A foreigner not adhering to the restrictions may have to pay penalties. In fact, non-compliance could lead to a 3-year prison term or a fine of 100,000 baht – 1, 000,000 baht.
It is the FBA that prescribes a wide range of commercial and industrial activities not meant to be carried out by the ‘foreigners’ unless a respective license has been obtained. This includes a Thai registered company, where half or more of the capital is held by a non-Thai, a Thai registered company or a foreign registered company, which are foreign-owned.
Though, there isn’t any general prohibition against the foreigners doing business in Thailand. The foreigners, however, cannot get involved in the following activities;
- Rearing livestock
- Trade in real property
- Rice farming, arable farming or orchard farming
- Forestry and the processing of wood from forests (naturally grown)
- Fishery, only in relation to marine life in Thai waters and the specific economic zone
- Newspaper publishing, radio or television broadcasting
- Manufacture or casting of Buddha images and alms bowls
- Extraction of Thai medicinal herbs
- Trading and auctioning of Thai antiques or antiques which are of historical value to the country
The Foreign Business Act of 1999 describes a foreigner as;
- “a natural person who is not a Thai national;
- a juristic person1not registered in Thailand;
- a juristic person registered in Thailand, with at least 50 percent of its share capital (or at least 50 percent of the capital invested in it) held by the persons set out in 1 or 2 above and if a limited partnership or a registered ordinary partnership, the managing partner or manager is not a Thai national; or
- a juristic person registered in Thailand, with at least 50 percent of its share capital (or at least 50 percent of the capital invested in it) held by any of the entities.”
Now that you have a basic idea about FBA and its limitations, you must seek legal advice to know if you are eligible to carry out a business in Thailand.