Foreign Business License Guide for Foreign Companies Operating in Thailand

One of the most important legal considerations for entering the Thai market is the Foreign Business License (FBL). This license determines whether the majority-foreign companies can legally operate certain activities in business sectors that are otherwise restricted to Thai nationals. 

This requirement also applies to Thai companies with at least 50 percent of their capital held by non-Thai persons and foreign juristic entities. This license aims to protect local businesses while also encouraging foreign investment in sectors beneficial to Thailand’s economic development.

Foreign companies or entities with 50 percent or more foreign ownership in restricted sectors need an FBL

Foreign companies that plan to engage in restricted business sectors must apply for and receive a Foreign Business License (FBL) before the start of their operations. The restricted sectors are listed in 3 categories under Thailand’s Foreign Business Act.

Restricted Sectors & Activities Defined by the FBL Act

The Foreign Business Act of 1999 has outlined three lists of activities in which foreign participation may be prohibited or restricted, as follows:

List 1: Business activities that are deemed to affect national interests and security, including

media, rice farming, forestry, and land trading are completely restricted for foreigners.

List 2: Business activities that relate to national safety, culture, and the environment, such as domestic transportation and certain types of manufacturing. Foreign participation in these sectors is not strictly prohibited, but it requires special permission from the Thai Cabinet.

List 3: Sectors where Thai nationals’ competitiveness is currently limited, ranging from service industries, such as accounting and legal services, to retail and hospitality. Foreigners can participate in these sectors by acquiring a Foreign Business License (FBL) approved by the Ministry of Commerce.

Exemptions to the FBL Requirement

In certain cases, foreign-owned companies may operate without an FBL if they qualify under one of the following exemptions: 

1. Board of Investment (BOI) Promotion 

If the companies operate within the promoted sectors such as technology, advanced manufacturing, R&D, or regional headquarters, the Board of Investment (BOI) can grant a Foreign Business Certificate instead of an FBL. The Foreign Business Certificate is granted based on the ability to meet the BOI’s certain development goals.

2. U.S.-Thailand Treaty of Amity

U.S. companies can own 100% of a Thai business in most sectors without an FBL, under the Treaty of Amity and be exempted from the FBL requirement. However, certain sectors remain restricted, including media, land, and natural resources.

3. Group Service Centers & Representative Offices

Foreign companies can operate in Thailand without a Foreign Business License through two structures that do not generate local revenue. These two structures are Intragroup Service Centers that provide support services to related companies within the same group and representative offices that handle non-commercial tasks such as sourcing and quality control. 

Navigating the Licensing Decision Process

To make the right licensing decision and reduce risk, businesses should follow a clear and structured plan before making the decision to invest in an entity in Thailand.

1. Determine ownership status: Companies may start by checking whether they intend to register the company under foreign or Thai ownership.

2. Assess business activities: Review planned business activities and identify if they fall under Thailand’s restricted lists

3. Explore exemptions: Check eligibility for BOI promotion, the Treaty of Amity, capital-based exemptions, or non-commercial structures.

4. If no exemption applies: Prepare to apply for a Foreign Business License. This includes ensuring adequate registered capital, a realistic timeline, and a thorough application procedure.

Contact us for more information on the Foreign Business Licence process or if you want to register for an FBL:

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