Cabinet Preliminarily Approves Amendments to the Foreign Business Act Aiming to Simplify Thai Market Access for Foreigners

The Thai government aims to reform its foreign business laws to create a more welcoming and competitive environment for international investors. On April 22, 2024, the Thai Cabinet preliminarily approved major changes to the Foreign Business Act B.E. 2542 (1999). This move reflects the government’s intent to attract more investment by removing some of the high barriers to access that Thailand traditionally had towards foreigners. The main goal is to reduce restrictions on foreign ownership and make it easier for international companies to do business in Thailand.

The Ministry of Commerce has been assigned to draft the amendments to the Foreign Business Act (FBA). The new text will then be resubmitted to the Cabinet before it is sent to the legislative process. Once the text has been voted on by the House of Representatives and the Senate (which is likely given that the government coalition has the majority), it will be sent for Royal Assent and implemented into law. 

The Government Recognises the Current Limitations of the FBA

The current law limits foreign ownership to 49 percent in most sectors unless a special exemption is granted. It also restricts foreign participation in certain industries such as culture, natural resources, and national security. In addition, foreigners also require specific licences to engage in various service industries such as legal, accounting, and consulting.  The FBA has not received a major reform to its core principle in nearly 25 years and is now seen as outdated in a fast-changing global economy where foreign investment is crucial to the country´s growth.

The Ministry of Finance has recommended lifting restrictions both on the types of business activities allowed for foreigners and on the minimum shareholding required for Thai nationals. By allowing greater foreign participation, the government hopes to encourage innovation and accelerate the competitiveness of Thai firms on the global stage.

The Amendments are Expected to Simplify Business Access

The Cabinet’s proposed reforms target several key areas.

1. Relaxation of Foreign Equity Caps

The Ministry of Commerce is reviewing the current foreign ownership limits in restricted sectors. The proposed changes may allow foreign investors to hold larger and possibly majority stakes in industries that were previously restricted. This is expected to reduce reliance on nominee arrangements and improve legal clarity.

2. Simplification of the Licensing Process

Second is the simplification of the Foreign Business Licence (FBL) process. The current procedure is widely seen as bureaucratic and opaque. The proposed revisions aim to define clearer approval criteria, cut down delays, and create a more efficient and predictable system. This would lower entry barriers and support a more rules-based business environment.

3.  Review of Restricted Business Sectors 

Officials are reassessing the list of restricted business activities. The government plans to remove certain service industries from the restricted list, opening them up to greater foreign participation and modernising the regulatory framework.

What’s Next?

The details of the amendments are still being finalised, but the Cabinet has publicly shown support for these reforms. The legislative process for the amended text still has not started, but it is expected to progress quickly once submitted. 

BizWings Thailand will continue to monitor the latest updates regarding this regulatory dossier and will update all our relevant stakeholders. Our team of experts helps international companies enter the Thai market with ease. We can assist with services such as setting up a Foreign Business Licence and Representative Office, paperwork, licensing, visas, and ongoing compliance. With years of experience and proven success with international clients, we are here to support your expansion in Thailand. 

Contact us at contact@bizwings.co to get started.