Foreign business law has consistently been an issue in Thailand. The laws are continually being revised commiserate with the evolution and steady incremental increase in the overall presence of foreign run and foreign based companies .The Department of Business Development has recently announced the conclusion of its investigation on foreign business law malpractice .It is becoming more and more apparent that “Big Brother” is watching your foreign business endeavours therefore, I strongly recommend you consider this update seriously.
It is no surprise that Thailand like all other countries protects its domestic owned businesses from foreign competition using its right to enact pertinent laws and regulations. The Foreign Business Act limits a foreign owned company’s involvement in various business sectors. The exclusions and limitations of these business sectors are categorised into 3 sections.
Category of Business pertinent to Schedule 1
Off Limits and Excluded from foreign Competition
Category of Business pertinent to Schedule 2
Possible Only Upon Positive Acceptance of Licence Application
Category of Business pertinent to Schedule 3
Possible Only Upon Positive Acceptance of License Application
Prior to further detail it behoves the potential business man in Thailand to note the following;
There are severe penalties for Non-Compliance to Business Restrictions:
Three year prison term and or fine of 100,000 – 1,000,000 Baht
Foreigners cannot engage in the following business:
– Newspaper Publishing ,Radio or television broadcasting
– Rice farming , arable farming or orchard farming
– Rearing livestock
– Forestry and the processing of wood from forests
– Fishery, in relation to marine life in Thailand waters .
– Extraction of medicinal herbs
– Trading and auctioning of Thai antiques which are of historical value to the country
– Manufacturing of Buddha images and alms bowls
– Trade in real property
The Variety of Companies one may Start in Thailand :
A) Registered Ordinary or Limited Partnership
B) Representative Office , Regional Office or a Branch Office
C) Limited Company
*Registered Ordinary or Limited partnership:
One partner’s liability limited the other partner’s is unlimited.
Non-existent in Thai partnership and unlike Thai partnership limited partnership must be registered
*Representative Office has limited activities:
1-Reporting on business movements in Thailand
2-Providing advice related to products that are being sold to distributors or customers
3-Sourcing goods and services in Thailand
4-Inspecting and controlling the quality and quantity of goods purchased or ordered to be manufactured in Thailand
5-Introducing information regarding new products or services
The regional office will conduct its business in Thailand on behalf of its head office based outside of Thailand Kingdom.
Foreign company must have at least one active branch office or affiliate in Asia. Regional offices are restricted from earning income, purchasing, selling, and negotiating while based on Thai soil .
Not limited to the ’non-trading“ activities . They are allowed to earn income
– Private or closely held company that has only a limited number of members.
– Public company
Minimum of 15 promoters
Minimum of 5 members Board of Directors at least half of them Thai