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Why Do You Need Foreign Business License in Thailand: Beginner’s Guide

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Interloop
Why Do You Need Foreign Business License in Thailand: Beginner’s Guide

Coming across a country like Thailand can leave any entrepreneur eager to set up a business there. The enriched natural resources and colorful culture surely have a lot to offer. However, the country has its regulations and restrictions to preserve employment for Thai nationals. This is why specific law prevails regarding businesses that every foreigner needs to comply with before starting a business in Thailand.


If you are one such businessman who wants to learn about Thailand's legal limitations before jumping straight into your business establishment plans. You will need to begin by understanding Foreign Business Act, established in 1999. It compiles all the lawful restrictions and requirements for foreign entrepreneurs and investors.


Under this law, Foreign Business License is given to non-Thai nationals who want to have the majority share in an organization established in Thailand. This blog will discuss why foreigners need FBL to set up a company in Thailand.


What Are The Restrictions Under the Foreign Business Act of Thailand?


All the business limitations provided under the act are divided into three lists, which are:


List 1

This list consists of several businesses that foreigners cannot opt for. It includes:


  • Radio broadcasting, television station, and newspaper business
  • Animal farming
  • Rice farming, other farming or gardening
  • Fisheries
  • Forestry and wood fabrication
  • Extracting Thai herbs, etc.


List 2

This list states that mentioned businesses are available to foreigners but only with an approved Foreign Business License. Some of the businesses restricted under this list are further divided into three groups, which are as follows:


  • Group1 prohibits business related to the security and safety of the nation.
  • Group2 prohibits business that can affect the traditional art and culture of the country.
  • Group3 prohibits any business that affects the natural resources or environment.


List 3

It includes business that foreigners should not practice unless the Director-General grants permission. However, the permissions may be granted under certain conditions that one must comply with strictly. The businesses in this list are long and include:


  • Rice milling
  • Fishery
  • Forestry
  • Accounting services
  • Legal services, etc. 


This regulation only allows foreigners to participate in the businesses under lists number 2 and 3. However, starting a legally approved business also means that foreigners will need a Foreign Business License and FDA registration to aware cabinet officers of the manufacturer and the devices.


How Can You Apply For Foreign Business License in Thailand?

The Foreign Business License (FBL) benefits international entrepreneurs and investors by getting 100% ownership of their business share in Thailand. But getting an FBL is not as easy as many may think, as some of the resistance that one may face in the process are as follows:


  • The FBL can take up to 4 to 6 as a whole. Given this, there is no guarantee that the officials will approve your FBL form at once.


  • Throughout your FBL form to get approval, the information about businesses in the form is measured within different criteria. These help the officials determine if your business can serve the nation's interest.


  • The Foreign Business License requires minimum Capital of three million Baht for each business. If all the FBL process gets approval from the ministers, non-Thai entrepreneurs or investors can get 100% ownership of the business shares.


Every country has its restrictions and regulations in allowing foreign business, which may risk-taking up opportunities for its people. Therefore, Foreign Business License bridges that gap for foreigners who want to grow their business in Thailand. But the entire process of FBL can be a little complicated for first-time entrepreneurs. This is why with the help of professional business advisory services, you can get an expert’s guide on where to start and what to do for adequate legal compliance while filing for FBL.

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