April 2026 Update
The policy shift discussed in this 2025 article has now entered a critical implementation phase. As of April 2026, the Department of Business Development (DBD) is moving beyond “intent” and is currently evaluating a formal shift to the “Actual Control” test for foreign status.
A public hearing on these changes is open until 30 April 2026. For our latest analysis on how these new enforcement measures impact existing corporate structures, please refer to our most recent update:
Read the 2026 Analysis
April 2025: Cabinet Approves Urgent Review
Thailand has taken a major step toward reforming its foreign investment regime. The Cabinet has agreed in principle to revise the Foreign Business Act B.E. 2542 (1999) — a key law that governs which business activities are restricted to foreigners, and under what conditions they can invest and operate in Thailand.
April 22, 2025 – The Thai Cabinet has approved in principle the urgent revision of the Foreign Business Act and assigned the Ministry of Commerce to begin drafting proposed amendments.
This development is confirmed in the official records of the Cabinet meeting on 22 April 2025 (Agenda Item 8). You can access the documentation here:
- Official English Summary: PR Thai Government Report
- Official Thai Record (PDF Mirror): Secretariat of the Cabinet Resolution
What Is the Foreign Business Act?
The Foreign Business Act (FBA) is the primary legislation that governs which business activities are restricted to Thai nationals and under what conditions foreigners may participate. In many sectors, the FBA prohibits foreigners from holding a majority ownership stake unless specific exemptions apply — such as privileges granted by the Board of Investment (BOI). In practice, the FBA plays a central role in determining how foreign-owned businesses in Thailand are structured, how they raise capital, and how they can expand.
If you’re unfamiliar with the Foreign Business Act and how it affects foreign investors, start here:
How would FBA reform affect your business?
Tell us briefly about your case and our Bangkok legal team will map out your options.
Why Is the Law Being Revisited?
According to the Cabinet record, the FBA is outdated. It is based on a protectionist model from the 1970s, originally designed to shield domestic entrepreneurs from foreign competition. While effective in its time, this framework no longer reflects Thailand’s economic goals or its ambition to attract innovation, high-value investment, and international partnerships.
What’s the Problem with the Current Act?
The Cabinet noted several key concerns:
- It limits Thailand’s competitiveness on the global stage
- It restricts foreign equity participation in key sectors
- It creates barriers for startups and technology-driven businesses that depend on foreign capital
- It slows down growth in GDP, job creation, and tax collection
One key issue is the strict foreign ownership limit. It makes it difficult for companies to raise investment from foreign partners without exceeding the 49% cap — often leading to nominee structures and associated legal risks.
Learn more:
The Direction of Reform
The Cabinet has proposed a shift in policy: from “protection” to “enhancing competitiveness.”
The Ministry of Commerce has been assigned to lead the amendment process with this new direction in mind. The goal is to modernize the law so it aligns with today’s investment environment and supports the long-term competitiveness of Thai businesses.
Which Agencies Support the Review?
The initiative has received support or no objection from:
- Ministry of Finance (MOF)
- Ministry of Interior (MOI)
- Ministry of Labour (MOL)
- National Economic and Social Development Council (NESDC)
- Board of Investment (BOI)
The Ministry of Finance emphasized that any revisions should consider the development stage of each sector and maintain consistency with other legal frameworks.
What Should Businesses Expect?
This is a Cabinet policy directive, not a legislative amendment. No draft law has been published yet. The next stages involve internal drafting, consultation, and eventual parliamentary review.
Whether the final amendment will reduce legal barriers in practice remains to be seen.
Key questions include:
- Will the changes allow greater flexibility for foreign shareholding?
- Will they reduce dependence on nominee structures?
- Will Thailand become more competitive as a regional investment hub?
What Happens Next?
- The Ministry of Commerce will begin drafting the amendment
- Consultations and regulatory reviews are expected
- No timeline has been announced, but the Cabinet emphasized urgency
We will monitor developments and provide updates as new information becomes available.
How We Can Help
We assist international clients with:
- Setting up Thai companies and investment structures
- Navigating the Foreign Business Act and BOI incentives
- Assessing legal risks and planning for long-term compliance
If you’re currently operating in Thailand or exploring market entry, this is a good time to review your structure and assess future scenarios.
Contact us for tailored advice or assistance.
