Registering a business in Thailand is governed by Thailand Foreign Business Act B.E. 2542 (FBA) which restricts foreigners to a maximum of 49% of the issued capital in most business operations (other than manufacturing).
According to the Foreign Business Act, business activities are generally divided into 3 types:
List 1: Business Not Permitted to Foreigners
List 2: Business Permitted to Foreigners under Conditions
List 3: Business Not Yet Permitted to Foreigners
List 1 is strictly prohibited to aliens. In order to be authorized to exercise a business under List 2 and List 3, wherein the company’s majority of shares are held by foreigners (it means that a foreigner owned more that 50% of the share equity of the business), you have to apply for a Foreign Business License (FBL).
Foreign Business License (FBL)
This license will allow a foreigner to set up business in Thailand where majority of the owners are foreigners.
To be granted a Foreign Business License, the official of the Ministry of Commerce will review if:
Your proposed business could not be competently carried out by a majority Thai-owned company;
It is not contrary to Thailand’s safety, security and stability, good morals or public order;
It is beneficial to Thai economy (which will be depend on how the business affects the natural resources, social development, conservation, energy and environment, consumer protection, size of the enterprises, employment);
It is beneficial in terms of technology transfer, research, and development;
It provides significantly more benefits and protect and promote Thai interest.
The initial minimum capital requirement has been satisfied. Under foreign business license it shall be either THB 3 million or 25% of the annual expenditure projection of the business for a period of 3 years, whichever is greater;
The number of foreign directors who shall have domicile in the country;
The ratio between capital and loan to be used to finance the business.
1. Get the Foreign Business License application form from Commercial Registration Department.
2. Prepare your company corporate documents.
Your company corporate document needs to be notarized, all foreign document (such as power of attorney; affidavits) needs to be certified by the Thai Embassy before filing to the local foreign ministry. You can get assistance from a reputable law firm such as Siam Legal International, this could help you assure that your documents are in order.
3. File the foreign license application under the proposed name of your company. This will be reviewed by Cabinet or Foreign Business Committee.