Foreign Business in Thailand
by Panisa Suwanmatajarn and Anon Chanruang
Foreign Business Act B.E. 2542 (1999) (“FBA”) is a master law which is aimed to restrict foreigners who would like to invest and conduct their business in the country. There are 2 key important provisions of the FBA which are 1. definition of a foreigner and 2. types of business that prohibit foreigners from entering into and conduct such business in a form of lists as annexed to the FBA. Nowadays, the Thai Government are pushing the country to be transformed into Thailand 4.0 model which in that model the policy of Thai Government will include providing privileges in investment promotion for the foreigners who would like to invest and conduct their business in Thailand.
The current FBA which has been in force for a considerable period of time and also contains certain lists of businesses which those are inconsistent with circumstances in regard to the economy, investment and international trade of the present time. Therefore, on 21 May 2019, the Cabinet approved in principle a draft Ministerial Regulation in Regard to Service Businesses Requiring Not to Obtain Permission by Foreigners B.E. …. (“Draft Ministerial Regulation”) proposed by the Ministry of Commerce.
According to Section 9 of FBA, it provides that “the Commission shall consider and review categories of businesses in the lists annexed hereto at least once every duration of one year as from the date of the entry into force of this law…….”
the Foreign Business Commission examined the service businesses listed in category 3 and were of the view that the three services businesses which are
- Service business to provide loan to affiliated companies in the group located in the country
- Service business to provide office for rental with utilities for affiliated companies in the group and
- Service business to provide consulting service for affiliates companies in the group for certain services, i.e. management, human resources, marketing and information technology which the Foreign Business Commission considered as they do not create adverse effect to the Thai entrepreneurs in competition readiness with foreigners as it is limited in providing services to affiliated companies, reducing the costs of operation among the group and increasing the business efficiency of business units in the national economy.
This Draft Ministerial Regulation will be submitted to the Council of State for its consideration and revision and then returned to the Cabinet for its final approval together with the comments from the Ministry of Finance, Bank of Thailand and Ministry of Digital Economy prior to be enforced.