Law "About Foreign Business" in 2019

A company with foreign investors in Thailand shall be registered as a limited liability company and must have the status of a Thai legal entity what means that more than half of the shares of the company should belong to Thai citizens or Thai companies.

This is due to the terms of the Foreign Business Act. If the company has half or more shares owned by a foreign shareholder, the company acquires the status of a foreign legal entity. The list of all types of activities that only Thai legal entities can engage in is attached to the law and is divided into 3 groups:

Group 1 - activities, which are always prohibited for foreign legal entities (press, radio, farming, selling real estate)

Group 2 - activities related to national security or affecting national traditions and art or natural resources (arms industry, antiques, mining)

Group 3 - activities in which Thai citizens are not ready to compete with foreigners (accounting services, legal services, architecture, advertising).

This list contains almost all possible types of business activities.

Group 1 - inaccessible to foreign business. 2 and 3 - foreign companies can be engaged in these types of business, but only after obtaining a foreign business license. The question is that very few companies can obtain such a license. For example, if the company's activities fall under the benefits of the Board of Investment of Thailand - you can get a license, but only after receiving a BOI certificate. Real estate sales, restaurant business, consulting, agency services, guest houses do not fall under such activities.

On June 25, 2019, the Ministry of Commerce issued a decree exempting certain types of activities from the Foreign Business Law, namely, activities related to the company's operations:

- provision of loans to affiliated and subsidiary companies;

- rental of office space to branches and subsidiaries, including utilities;

- the provision of consulting services related to management, marketing, human resources and information technology, branches and subsidiaries.

The decree also defines affiliates and subsidiaries. Such a definition, for example, applies to legal entities that own 25 percent or more of the shares of another company. In this case, the company-shareholder can be 100% owned by foreigners if its business will be exclusively one or more of the types of activities listed above.

For all questions of registration of a 100% foreign company, please contact: + 6687-348-57-03 (WhatsApp, Viber).

Author: Aleksandra Agapitova

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