RECENT RELAXATION ON FOREIGN BUSINESS RESTRICTION IN THAILAND

Background
The Ministerial Regulation on prescription of exempted service businesses in doing foreign businesses No.4 B.E. 2562 (2019) has been enacted on 25 June 2019. This Ministerial Regulation facilitates foreign investors in doing business in Thailand and eases the regulatory requirements for certain restricted businesses, considering that the exempted businesses have little impact on Thai business operators competing with foreign investors. Also, it aims to reduce the cost of operation resulting in higher efficiency of business units in the national economy as well as providing flexibility amongst affiliated/group companies in their administration and management.

In light of that, it is possible for any restricted businesses under the Foreign Business Act to be reviewed and get exempted from obtaining the Foreign Business License (“FBL”) once the approval is granted by the Cabinet.

The Foreign Business Act, B.E. 2542 (1999) (“FBA”) is the primary statute in regulating all business activities carried out by foreigners in Thailand. The law defined the scope of foreigner as well as provided the classification of the businesses into three lists. The lists range from List 1 which sets out the businesses which are strictly prohibited and closed to foreigners to List 2 and 3 where foreigners may be permitted to be engaged in certain businesses upon obtaining requisite licenses and approvals from the relevant authority. More specifically, any service businesses which are not listed and deemed as non-restricted business would generally be considered as “other service businesses” under List 3 (21) of the FBA, which requires a foreigner to obtain the FBL to operate businesses.

Generally, the Foreign Business Commission, which is responsible for ensuring compliance with the FBA has the right to determine and review the categories of businesses annexed in the list of the FBA annually and to prepare an opinion for the Minister. Based on the recent Ministerial Regulation, the following relaxation has been granted.

Download Newsletter PDF