Essential Insights for Starting a Business in Thailand
Thailand places significant restrictions on foreign businesses, requiring careful navigation of legal frameworks. The Foreign Business Act (FBA) prohibits certain activities outright and mandates a license for others. Obtaining this license is often a complex and time-consuming process that involves strict regulatory compliance.
However, there are notable exceptions. Projects approved by the Board of Investment of Thailand (BOI), the Industrial Estate Authority of Thailand (IEAT), or those covered by international treaties and free trade agreements are exempt from FBA restrictions.
Securing BOI privileges is particularly advantageous. The BOI offers a range of tax and non-tax incentives, including corporate income tax exemptions, import duty reductions, and foreign land ownership rights, making it an attractive option for many investors.
For foreign businesses looking to avoid the constraints of the FBA, a common strategy is to participate in a company where Thai individuals or entities hold a majority of the capital (typically at least 51%). Under the FBA, such companies are not classified as foreign, allowing them to bypass restrictions and operate more freely.
Restrictions for Foreigners: The Foreign Business Act
To start a business in Thailand, it’s important to understand the restrictions for foreigners.
The main law governing foreign investments is the Foreign Business Act (FBA), enacted in 2542 in the Buddhist calendar (1999 in the Gregorian calendar). This law limits foreign participation in certain business activities.
You can find unofficial English translations of the Foreign Business Act on:
• The United Nations Conference on Trade and Development (UNCTAD) website
• The Thailand Board of Investment (BOI) website
Definition of “Foreigner” under the Foreign Business Act
In accordance with Section 4 of the Foreign Business Act (FBA), a “Foreigner” is defined as follows:
- A natural person who is not of Thai nationality.
- A juristic person not registered in Thailand.
- A juristic person registered in Thailand with the following characteristics:
- At least half of its capital shares are held by persons under (1) or (2), or a juristic person in which persons under (1) or (2) have invested an amount equivalent to at least half of the total capital.
- A limited partnership or registered ordinary partnership where the managing partner or manager is a person under (1).
- A juristic person registered in Thailand with at least half of its capital shares held by persons under (1), (2), or (3), or a juristic person in which persons under (1), (2), or (3) have invested an amount equivalent to at least half of the total capital.
For the purpose of this definition, shares of a limited company represented by share certificates issued to bearers are deemed to be held by foreigners.
Read here about proposed shifts to “Actual Control” definitions:
Can you own 100% — without Thai shareholders?
Often yes: BOI promotion, the US Amity Treaty, an FBL or the right activity classification can allow full foreign ownership. Tell us what your business does, and our Bangkok lawyers will tell you which route applies to you — before you take on partners you do not need.
Prohibited or Restricted Activities
The types of activities prohibited (or restricted) for foreigners are divided into three categories and are listed in the schedules attached to the Foreign Business Act (FBA).
List 1: This list specifies types of activities strictly prohibited for foreigners for “special reasons.” It is impossible to obtain a license for these types of activities.
List 2: List 2 enumerates activities that may impact national security, arts, culture, traditions, folk crafts, natural resources, or the environment. Foreigners may engage in these activities after obtaining a Foreign Business License (“FBL”) issued by the Minister of Commerce based on a decision of the Cabinet (Council of Ministers) of Thailand. As a general rule, FBLs can be obtained by legal entities in which Thai citizens hold at least 40 percent of the capital, and among the directors of which Thai citizens make up at least two-fifths.
List 3: List 3 specifies types of activities in which Thai citizens are not prepared to compete with foreigners. Foreigners may engage in these activities after obtaining an FBL issued by the Director-General of the Department of Business Development, Ministry of Commerce (DBD), subject to approval by the Foreign Business Board. With an FBL, there are no requirements for Thai citizens’ participation in the capital and management bodies of legal entities. In 2019, some types of intra-group services provided by affiliated or subsidiary companies were excluded from the scope of List 3.
The table below provides a brief description of the lists:
| Category | Restrictions | Description and Examples |
| List 1 | Prohibited from foreign ownership, impossible to obtain a license. | Activities strictly prohibited for foreigners for “special reasons.” Examples: Media, agriculture, livestock farming, land trading. |
| List 2 | Requires permission from the Ministry of Commerce and approval from the Cabinet of Ministers. At least 40% of shares must be owned by Thai individuals, and Thai citizens must constitute at least two-fifths of the directors. | Activities that may impact national security, arts, culture, traditions, folk crafts, natural resources, or the environment. Examples: Weapon production, domestic transportation, mineral mining, antique trading. |
| List 3 | Requires permission from the Director-General of the Department of Business Development, Ministry of Commerce (DBD), and approval from the Foreign Business Board. | Activities in which Thai citizens are not yet ready to compete with foreigners. Examples: Various services, hotel business, construction, trading * There are some exceptions. |
For a full list of the restricted business activities, please see below.
Restricted businesses: Lists Attached to the Foreign Business Act B.E. 2542 (1999)
List One: Businesses Strictly Prohibited to Foreigners for Special Reasons
- The press, including radio broadcasting stations or radio and television station businesses
- Rice farming, plantations, or crop growing
- Livestock farming
- Forestry and timber processing from a natural forest
- Fishery, limited to the catchment of aquatic animals in Thai waters and specific economic zones of Thailand
- Extraction of Thai medicinal herbs
- Trading and auctioning of antique objects of Thailand or objects of historical value to the country
- Making or casting Buddha images and monk alms bowls
- Land trading
List Two: Businesses Related to National Safety or Security or Having Impacts on Arts, Culture, Traditions, Customs, Folk Handicrafts, Natural Resources, and the Environment
Chapter 1: Businesses Related to National Safety or Security
- Production, distribution, and maintenance of:
- Firearms, ammunition, gun powders, and explosives
- Components of firearms, ammunition, and explosives
- Armaments, ships, aircraft, or vehicles for military use
- Equipment or components of all types of war materials
- Domestic transportation by land, water, or air, including domestic aviation
Chapter 2: Businesses Having Impacts on Arts, Culture, Traditions, Customs, and Folk Handicrafts
- Trading of antiques or artistic objects that are artistic works or handicrafts of Thailand
- Production of wood carvings
- Silkworm raising, production of Thai silk yarn, weaving of Thai silk, or printing of Thai silk patterns
- Production of Thai musical instruments
- Production of goldware, silverware, nielloware, bronzeware, or lacquerware
- Production of crockery or porcelains representing Thai arts and culture
Chapter 3: Businesses Having Impacts on Natural Resources or the Environment
- Production of sugar from sugarcane
- Salt farming, including non-sea salt farming
- Production of rock salt
- Mining, including rock blasting or rock crushing
- Timber processing for production of furniture and utensils
List Three: Businesses in Respect of Which Thai Nationals Are Not Ready to Compete with Foreigners
- Rice milling and production of flour from rice and economic plants
- Fishery, only in respect of the hatching and raising of aquatic animals
- Forestry from a grown forest
- Production of plywood, veneer wood, chipboards, or hardboards
- Production of lime
- Provision of accounting services
- Provision of legal services
- Provision of architectural services
- Provision of engineering services
- Construction, with the exception of:
- Construction of structures for delivery of infrastructure public services in the sphere of public utilities or transportation requiring the use of special apparatuses, machines, technology, or expertise, with the minimum capital of five hundred million Baht or more from foreigners
- Other types of construction as prescribed in the Ministerial Regulation
- Brokerage or agency businesses, with the exception of:
- Being a broker or agent in the sale or purchase of securities or in services related to futures trading of agricultural commodities, financial instruments, or securities
- Being a broker or agent in the sale, purchase, or procurement of goods or services necessary for production or the provision of services amongst affiliated enterprises
- Being a broker or agent in the sale, purchase, procurement, distribution, or acquisition of domestic and foreign markets for the distribution of domestically manufactured or imported goods, which is in character the operation of international trade, with the minimum capital of one hundred million Baht or more from foreigners
- Other types of brokerage or agency businesses as prescribed in the Ministerial Regulation
- Sale by auction, with the exception of:
- A sale by auction involving international bidding of items other than antiques, objects of antiquity, or artistic objects that are artistic works, handicrafts, or objects of antiquity of Thailand or of historical value to the country
- Other types of sales by auction as prescribed in the Ministerial Regulation
- Internal trade related to traditional agricultural products or produce not yet prohibited by law
- Retail sale of goods of all types with the total minimum capital lower than one hundred million Baht or with the minimum capital of each store lower than twenty million Baht
- Wholesale of all types with the minimum capital of each store lower than one hundred million Baht
- Advertising business
- Hotel business, with the exception of hotel management services
- Guided touring
- Sale of food and beverages
- Cultivation, propagation, or development of plant varieties
- Other service businesses, with the exception of those prescribed in the Ministerial Regulation
Foreign Business License (FBL)
Foreign-majority companies (50% or more foreign shareholding) intending to conduct service activities restricted under List 2 or List 3 of the Foreign Business Act (FBA) must obtain a Foreign Business Licence (FBL) from the Department of Business Development (DBD) prior to commencing operations. Applications are strictly evaluated based on the Section 5 Net-Benefit Test to ensure the project contributes to Thailand’s economic and social development.
Standardized approval is now available for 15 Safe-Harbour categories identified in May 2025, including intra-group support services, intra-group loans, and carbon credit verification. For businesses falling outside these standardized templates, approval is contingent upon the following criteria:
- Technology Transfer: A concrete and documented plan to transfer proprietary know-how, specialized systems, or advanced technology to Thai personnel.
- Thai Employment: A credible hiring strategy that aligns with the practical benchmark of a 4:1 Thai-to-foreigner staff ratio.
- Capital Investment: Provision of minimum paid-up capital of THB 3 million per restricted business activity.
- Economic Contribution: Evidence that the business activity supports national infrastructure, energy conservation, or the competitive environment for Thai enterprises without causing a negative impact.
For a detailed analysis of current 2026 application procedures, capital verification rules, and Safe-Harbour alignment, see our separate guide:
When You Don’t Need a Foreign Business License
As a general rule, foreigners are required to obtain a Foreign Business License (FBL) to operate a business in Thailand. The process of obtaining this license can be complex, lengthy, and its outcome often unpredictable.
However, there are certain exceptions that allow foreigners to operate a business without an FBL:
- Activities not restricted under the FBA: If the business activity is not listed in the schedules attached to the Foreign Business Act (FBA), foreigners can engage in such business without an FBL. Examples include manufacturing, exporting, hotel management services, non-food retail with capital exceeding 100 million baht, and other specific types of activities.
- Providing consultancy and support to affiliated or subsidiary companies in areas such as administration, marketing, human resources management, IT, etc.;
- Providing loans to affiliated or subsidiary companies;
- Operating as a representative or regional office.
- Obtaining a Foreign Business Certificate (FBC) from the Thailand Board of Investment (BOI): This certificate allows foreign companies to operate within the framework of projects approved by the BOI.
- Obtaining an FBC from the Industrial Estate Authority of Thailand (IEAT): This certificate allows foreign companies to conduct business in industrial zones approved by the IEAT.
- Obtaining an FBC issued under international treaties: For example, under the Treaty of Amity and Economic Relations between the United States and Thailand.
These exceptions create opportunities for foreign investors to conduct business in Thailand without undergoing the full and challenging process of obtaining an FBL.
Thailand Board of Investment
The Thailand Board of Investment (BOI) offers various tax and non-tax incentives and preferences to Thai and foreign companies in accordance with the Investment Promotion Act.
Foreign investors, whose projects have received BOI incentives, can obtain a certificate instead of an FBL, allowing them to engage in activities specified in Schedules 2 and 3 of the FBA (Foreign Business Act), known as a ‘foreign business certificate’ or ‘FBC’.
Additionally, BOI incentives may include full or partial exemption from corporate income tax for up to eight years, full or partial exemption from customs duties on the import of equipment or raw materials, and the opportunity to own land.
As a general rule, projects with an investment value of at least one million baht, excluding working capital and land cost, are eligible for BOI incentives.
Read details:
Industrial Estate Authority of Thailand
The Industrial Estate Authority of Thailand (IEAT), established and operating in accordance with the Industrial Estate Authority of Thailand Act B.E. 2522 (1979), provides incentives to investment projects located in industrial estates. In addition to infrastructural advantages, investors can receive other benefits and privileges, including land ownership rights, ease in obtaining work permits for foreign experts, currency regulation benefits, as well as other tax and non-tax incentives.
Foreign investors who have received IEAT incentives can obtain an FBC (Foreign Business Certificate), which allows them to engage in activities specified in Schedules 2 and 3 of the FBA (Foreign Business Act).
International Treaties / Free Trade Agreements
Five treaties or free trade agreements that Thailand has concluded with the USA, Australia, Japan, and the countries of the Association of Southeast Asian Nations (ASEAN) allow, in some cases, citizens or legal entities of these countries to engage in activities restricted to foreigners without obtaining an FBL (typically, by holding a majority in Thai companies).
Here are these treaties and agreements:
- The Treaty of Amity and Economic Relations between the USA and Thailand of 1966
- The Free Trade Agreement between Australia and Thailand
- The Economic Partnership Agreement between Japan and Thailand
- The ASEAN Comprehensive Investment Agreement (ACIA)
- The ASEAN Framework Agreement on Services (AFAS)
Thai Company: The Mainstream Business Option
Foreigners whose projects do not meet the BOI or IEAT support criteria commonly opt to not be governed by the Foreign Business Act (FBA). This is typically achieved by investing in a company where at least 51% of the capital is owned by Thai individuals or legal entities. Such a company is not regarded as a foreign company under the terms of the FBA.
Thailand Anti-Nominee Rules 2026: Full Framework — Which Structures Are Affected and How
Navigating Thai Company Ownership: Risks, Strategies, and Compliance
Private Limited Company Formation in Thailand: Step-by-Step Guide
If you need guidance on starting a business, investing, or navigating corporate law in Thailand, feel free to contact us or use the below form for your queries.
