Significant Considerations For A Foreign Investor in Thailand

The firm you are heading has a stable and capable financial backing. It is ambitious and is looking for a promising foreign area for expansion. And you came to consider Thailand as the country of your choice to expand your business.

Since Thailand is continuously opening up for foreign investment, many prospective investors are packing their bags up and seemingly determined to make it even bigger in the Kingdom.

Is it possible to ride along the band wagon?

Apparently, it is all up to you. Well honestly, you have the right to do so, to pack up and head to Thailand to establish your business there provided that you already have an ample knowledge about the restrictions imposed on foreign investors by the Foreign Business Act.

Otherwise, consider going over this article and know whether your firm’s interest is among the activities permitted to foreigners and foreign-owned companies.

The Lists of Promoted Activities

Thailand has been looking forward to strengthen its local economy while looking back at the financial crisis of the 1990s that swept across South East Asia.

The country imposed restrictions on certain businesses and these businesses are grouped accordingly in three separate lists.

  • List A – These are the types of businesses that foreigners are not allowed to undertake.
  • List B – These are businesses that expatriates are allowed to engage in but are still subject to certain conditions.
  • List C – Businesses belong to this list are not yet allowed to foreign business entities.

Foreign Company Ownership Schedule

If your company is majority-owned by expatriates like you, generally speaking, your company is not allowed to engage on business activities that are restricted from you. However, you may still engage to certain businesses provided that your company is a holder of a Foreign Business License.

If you are planning to incorporate your firm as a Thai Limited Company in order to engage on various business types generally not permitted to foreigners, you may do so.

Since a Thai Limited Company involves at least 51% ownership by Thai shareholders, this can be tricky for you. Your Thai shareholders must be able to prove that they are financially capable to buy and own shares of your company and have the voting power reciprocal to their amount of shares or they will be considered as Thai nominees which are not allowed under Thai law.

The Foreign Business License

Even if you are not an American, you can still do business in Thailand legally either by obtaining a Foreign Business License, getting promotion from the Board of Investments or through the Amity Treaty (for Americans). You just have to meet the standards set by the law.

You have to file for an application at the Commercial Registration Department and such application will be subject to a review by either the Foreign Business Committee or the Cabinet.

However, your application alone is not a sure recipe to be granted a license. Your business operation is subject to comply with the criteria set.

Yet, the key battle for a business license to be granted is how your company will be able to benefit Thailand, how its interests are protected and promoted as well as the extent of benefits it can reap in terms of technology and expertise transfer.

While it is alright to be optimistic with the whole application, reality wise, obtaining a Foreign Business License is a tedious, complex and lengthy process in which the outcome is unpredictable.

Thai-registered Lawyers

It is already taken that you have your own lawyers from abroad and there is no question of their capabilities but their capacities in dealing with Thai laws and procedures can pose many problems.

This is so because the whole Thai process and laws can be very markedly different to the laws of your country.

To deal with this potential problem, bring in into your fold some reputable registered Thai lawyers. They have the knowledge and the expertise in dealing with the Thai system which is highly embedded with the country’s culture and history.

Our client service standards affirm our commitment to prioritizing the needs of our clients and to ensure excellence in all that we do.
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