Foreign Business License in Thailand — Do You Need One?

Foreign investors in Thailand face one early decision that shapes everything else. They must determine whether their majority-foreign company can operate its intended activity without approval or must secure a Foreign Business License (FBL).

Thailand’s Foreign Business Act defines a “foreigner” to include Thai companies with at least 50 percent of their capital held by non-Thai persons or foreign juristic entities, and then restricts a range of activities for such companies unless licensed. That gatekeeping design means the answer turns on two variables only — who owns the company and what the company does — so clarifying both at the start prevents false starts, delays, and reputational risk.

When a Foreign Business License is required

If non-Thai ownership reaches 50 percent or more, the Thai entity is foreign under the Act. When that foreign entity engages in an activity in the restricted lists, especially List 3 service businesses such as consulting, legal, accounting, engineering, and many forms of trading, an FBL is generally required before operations begin. Manufacturing and pure export activities typically sit outside the restricted lists, so many factory projects do not need an FBL.

A material nuance affects trading models. Retailing by a foreign-owned company is treated as restricted only where total paid-up capital is below THB 100 million (US$2.7 million) or where each shop has less than THB 20 million (US$540,000) in capital. Wholesaling is restricted where each shop has less than THB 100 million (US$2.7 million). At or above those capital floors, a foreign-owned trader may conduct retail or wholesale activities without an FBL for those lines.

Exemptions and practical alternatives

Three routes can displace the need for an FBL entirely. The Board of Investment promotes grants approval to operate restricted activities via a Foreign Business Certificate instead of a discretionary license when the project fits a promoted category. Authorities then evaluate benefits such as employment, technology transfer, and export potential. US investors can rely on the US-Thailand Treaty of Amity for majority ownership in most sectors, subject to specific exclusions.

Thailand has also carved out defined intragroup service lines by ministerial regulation, allowing group service centers to support affiliates without an FBL where criteria are met. For non-revenue platforms, representative offices have been exempted from the FBL requirement since 2017, which is often the right bridgehead when the market goal is sourcing, quality control, or technical liaison rather than sales.

Application, capital, and timeline

Where an FBL is still required, applications are filed with the Department of Business Development. Reviews consider the project’s contribution to Thailand in areas such as employment, technology transfer, and competition. In straightforward cases, investors should plan roughly 3 to 6 months from a complete filing to a decision. Statutorily, once a complete file is accepted, the Foreign Business Committee has 60 days to rule, which sits within that practical window. Thailand is also rolling out an e-foreign system for licensing and certification, alongside the DBD’s broader move to online company registration on the DBD Biz Regist platform, which reduces in-person touchpoints and speeds issuance once approvals are granted.

Capital rules are binding and differ by situation. A foreign-owned company not subject to a license requirement must have at least THB 2 million (US$54,000) in fully paid capital before commencing business.

If the business is a restricted activity that needs permission, the minimum rises to the greater of THB 3 million (US$81,000) or 25 percent of the first 3 years’ average estimated expenses, with payment schedules set by regulation. Minimum capital must be paid in within the time windows prescribed by law, and authorities check compliance during and after licensing.

These floors apply per restricted business line, so multi-line proposals should model capital per scope rather than relying on a single consolidated figure.

From a budgeting perspective, official filing fees sit in the low THB thousands (US$30 to US$100). These are minor compared to the preparation and advisory costs, which vary by scope but typically make up the bulk of spend. Most timelines extend or compress based on the quality of the dossier, the clarity of the activity description against the lists, and how quickly follow-up questions are answered.

Compliance and penalties

Licenses and certificates limit you to the scope approved. Operating a restricted business without an FBL or valid exemption is a criminal offense. The Act provides for imprisonment of up to 3 years, fines between THB 100,000 (US$2,700) and THB 1,000,000 (US$27,000), and court-ordered cessation, with additional daily fines for non-compliance.

Contracts that mask foreign control, often called “nominee” arrangements, are illegal and prosecuted.

Treat licensing as a board-level compliance obligation and maintain prompt notifications to the DBD if shareholding or scope changes later.

Two investor scenarios

A foreign-owned management consulting firm plans to advise Thai third-party clients. Consulting sits squarely in List 3 services. Unless the firm qualifies for an intragroup-services exemption or a treaty route, it should expect to pursue an FBL and meet the minimum capital for that business line. The correct play is to build a complete dossier around benefits to Thailand and allow 3 to 6 months for review.

A global distributor seeks a fully foreign-owned Thailand platform for both wholesale and a handful of branded retail outlets. If the company capitalizes at THB 100 million (US$2.7 million) and each retail shop carries at least THB 20 million (US$540,000), it can operate retail without an FBL.

For wholesale, each shop must also carry at least THB 100 million (US$2.7 million) to be exempt. If those levels are not feasible, the decision tree shifts to an FBL, a Thai-majority joint venture, or BOI routes if other promoted activities are in scope.

Making the right licensing decision

The licensing decision is best handled in a clear sequence. Begin by assessing whether the entity is classified as foreign or Thai based on ownership. Then review the planned activities against the restricted lists and test for exemptions, whether through BOI promotion, the Treaty of Amity, high-capital trading thresholds, or intragroup carve-outs. Where none of these routes apply, the company must move forward with the FBL process supported by sufficient capital, realistic timelines, and a well-prepared dossier.

Deciding in this order avoids re-filings, keeps advisory costs under control, and ensures that the launch date remains credible.

This article first appeared on ASEAN Briefing, our sister platform.