The main piece of legislation regulating foreign investment in the Kingdom of Thailand is the FBA. However, certain provisions of the law are only applicable to Thai citizens; hence, foreig investors looking to do business in the Kingdom of Thailand can face certain restrictions.
Please note that foreign individuals seeking to acquire shares of Thai companies are required to obtain a license authorizing provision of financial services in the Kingdom of Thailand.
Thailand: Obtaining a License for Foreign Business Operators
Foreign investors wishing to engage in entrepreneurial activity in the Kingdom of Thailand will have to obtain approval from:
- Minister of Commerce;
- Head of the Business Development Department.
If a foreign national is allowed to register a business in a Thai IEAT, they’ll be required to obtain a permit authorising conduct of FBA-restricted activities in the Kingdom of Thailand.
Obtaining a foreign business license or foreign business сertificate requires foreign investors to submit to the DBD:
- an application (along with the necessary documents);
- an ID of their authorized representative in the Kingdom of Thailand.
A fee for submitting an application is sixty five dollars, while a license fee ranges from one thousand two hundred and fifty dollars to fifteen thousand six hundred and fifty dollars. The fee depends on the type of applicant (i.e. whether they’re physical persons or legal entities), license type & the amount of share capital.
Obtaining a foreign operator license in the Kingdom of Thailand can take from three to twelve months. Obtaining a Thai foreign business certificate may take from two to six months.
Business operators who receive investment support from the BOI or who are licensed to operate a business in an industrial zone of Thailand aren’t required to comply with licensing requirements. Investors from a country with which Thailand signed an investment treaty mustn’t obtain a license if they meet the required qualifications & don’t operate a business covered by the treaty.
Prior to starting business in Thailand, investors can seek prior advice from a government agency or request an assessment from the DBD. In their erequest, they must state the structure of their share capital & all activities their company will be conducting. A request can be made on behalf of an investor’s company or its representative/legal advisor.
After closing a deal, licensed foreign business operators must:
- present their license at the place of doing business;
- make a minimum capital investment within a specified period of time;
- maintain the loan vs equity ratio of seven to one;
- submit a report on the transfer of technology or know-how to the Ministry of Commerce;
- have at least one authorized representative;
- submit financial statements within five months since the end of each fiscal year.
Failure to comply with these requirements may entail stiff penalties and even license revocation.
Considering opening a company in the Kingdom of Thailand? Looking for advice on regulation of investment activities in the Kingdom of Thailand? Why not reach out to IQ Decision UK?