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Foreign Business Act of 1999

Applying for permission to operate a business under the Foreign Business Act BE. 2542 (1999)

According to the Foreign Business Act BE. 2542 (1999), foreigners are prohibited from operating some categories of businesses, and some categories of businesses can be operating by obtaining a license or a certificate according to the Business Lists as a case may be.

Definition of a foreigner
The following person or juristic person is defined as a foreigner:

1. Natural person not of Thai nationality.
2. Juristic person not registered in Thailand.
3. Juristic person registered in Thailand having half or more of its capital shares held by person or juristic person as mentioned in (1) or (2).
4. Juristic person registered in Thailand having half of more of its capital shares held by (1), (2) or (3).
The Business Lists under the Foreign Business Act BE. 2542 (1999)
1. Business List 1: covers Business which foreigners are not allowed to operate.
2. Business List 2: foreigners can operate business if permitted by the Minister of the Ministry of Commerce with the approval of the Cabinet.
3. Business List 3: foreigners can operate business if permitted by the Director – General of the Department of Business Development with the approval of the Committee
Application forms and application fees
1. Complete application forms called Tor.2 , together with supporting documents.
2. License application fee is 2,000 Baht.

Venue for submitting an application

1. Bangkok : Bureau of Foreign Business Administration , the Department of Business Development, Ministry of Commerce, Nonthaburi1 Rd. 11000, Tel (662) 5474425-26, Fax (662) 5474427 -28
2. Other provinces: Provincial Commercial Offices

Procedure of issuing a license

1. Business List 2: the Department of Business Development will propose an application to the Minister of Commerce who will endorse to the Cabinet. After the approval of the Cabinet, the Department of Business Development will notify the applicant and issue the license within 15 days.
2. Business List 3: the Department of Business Development will conclude the application details to the Sub-Committee and Committee of Foreign Business for an approval. After the Director- General’s approval, the Department of Business Development will notify the applicant and issue the license within 15 days.
3. The consideration period for approval of the application must be finished within 60 days. Operating business can be done after obtaining the license.
4. In case of disapproval, written notification will be sent to an applicant within 15 days and the applicant is entitled to appeal to the Minister of Commerce within 30 days (no application form is required). It can be written as a letter by submitting to the Department of Business Development. The appeal consideration period will not exceed 30 days.

License fees

1. Business List 2: 10 Baht for each registered capital of 1,000 Baht with the minimum of 40,000 Baht and the maximum of 500,000 Baht.
2. Business List 3: 5 Baht for each registered capital of 1,000 Baht with the minimum of 20,000 Baht and the maximum of 250,000 Baht.

Certificate for operating a business instead of applying a license

1. Foreigners, who are eligible for the privilege under the Treaty, can request for a certificate for operating a business in List 1, List 2 and List 3.
2. Foreigners, who are promoted under the investment promotion law, can request for a certificate for operating a business in List 2 and List 3.
3. An applicant must complete application forms called Tor.6 , together with supporting documents, by submitting them to the Department of Business Development and the Director-General will issue the certificate within 30 days of the application submission date.
4. Certificate application fee is 2,000 Baht and certificate fee is 20,000 Baht.

Minimum capital and conditions

1. Either licensees or certificate grantees under the Treaty must have the minimum capital as prescribed in the ministerial regulations i.e not less than 25% of the average per year of three year estimated expenditure. For instance, estimated expenditure on the average per year of three year estimated expenditure is 100 million Baht. Hence, the minimum capital is 25 million Baht. Therefore, if the company, which is registered in Thailand, has a registered capital less than 25 million Baht, it has to increase its capital. Meanwhile, in the case where the company not registered in Thailand, 25 million Baht have to be remitted into Thailand.
2. No required minimum capital for certificate grantees under the Investment Promotion Certificate.
3. The followings are the conditions for the foreign licensees to be comply with:
  1. 3.1 the ratio of the capital and loans to be used in the permitted business is 1:3. i.e. while capital is 100 Baht, business loan can not be exceeding 300 Baht.
  2. 3.2 at least one of foreign directors must have domicile in Thailand.
  3. 3.3 the minimum capital must be kept up until stop operating a business in Thailand i.e. the minimum capital can be retained in various forms such as fixed assets or current assets.
4. Certificate grantee under the Treaty must comply with the conditions specified in the Treaty.
5. Certificate grantee under Investment Promotion Certificate must comply with the conditions specified in Investment Promotion Certificate.