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Please note: The Ministry of Commerce has
proposed a Foreign Investment Law (FIL) that has been
approved by the Cabinet and that is currently in the
parliamentary process. When approved, it will replace the
Alien Business Law.
A. Introduction
Aliens in Thailand derive their legal rights primarily
from the domestic laws of Thailand. In general, aliens
enjoy the same basic rights as Thai nationals.
Restrictions
on alien ownership in commercial banks, insurance
companies, commercial fishing, aviation business,
commercial transportation, commodity export, mining and
other enterprises exist under various laws. In addition,
Thai participation will frequently be required in those
activities seeking promotion from the BOI.
B. The Alien Business Law
The Alien Business Law of 1972 primarily serves to define
and narrow the scope of foreign participation in Thai
business activities.
An alien is
defined as a natural or juristic person without
Thai nationality and includes: |
 |
A juristic person with at least
one-half of shares in its registered capital
being held by aliens or juristic persons in which
the capital contribution by aliens is valued at
least one-half of its total capital |
 |
A juristic person with more than
half of the number of its shareholders, partners
or members being aliens, regardless of the amount
of capital invested by aliens |
 |
A limited partnership, or a
registered ordinary partnership of which the
managing partner is an alien |
C. Businesses Subject to Regulation
Businesses that initiate activities that fall under
categories A, B and C (listed below) of the Alien
Business Law are subject to the limitations imposed by
law. Activities outside of the apparent scope of the
Alien Business Law include many manufacturing industries,
leasing and lending activities. Some of these businesses
may be subject to restrictions under other Thai laws,
regulations and practices.
Businesses in
Categories A and B are closed to aliens. Alien
enterprises granted promotional privileges by the Board
of Investment are permitted to engage in a Category B
business.
While
businesses in Category C remain open, Thai authorities
grant permits to foreigners for work in these categories
only when they are convinced that such new businesses
could not be competently conducted by an organization in
which the majority ownership is Thai.
Category
A - Closed to Aliens |
Agricultural
Businesses |
 |
Rice farming |
 |
Salt farming, including manufacture
but excluding rock salt mining |
Commercial
Businesses |
 |
Internal trade in local agricultural
products |
 |
Land trade |
Brokerage or Agency |
 |
Auctioneering |
Service Businesses |
 |
Accounting |
 |
Architecture |
 |
Advertising |
 |
Law |
 |
Barber, hairdressing, and
beautification |
Other Businesses |
 |
Building construction |
|
Category
B - Closed to Aliens unless promoted by the Board
of Investment |
|
Agricultural Businesses |
 |
Cultivation |
 |
Orchard farming |
 |
Animal husbandry, including silk
worm raising |
 |
Timbering |
 |
Fishing |
|
Industrial and Handicraft
Businesses |
 |
Rice milling |
 |
Manufacture of flour from rice field
crops |
 |
Manufacture of sugar |
 |
Manufacture of beverage, with and
without alcoholic blending |
 |
Manufacture of ice |
 |
Manufacture of drugs |
 |
Cold storage |
 |
Wood processing |
 |
Manufacture of product from gold,
silver, niello, or bronze |
 |
Manufacture of casting of images of
Buddha and manufacture of alms bowls |
 |
Manufacture of wood carvings |
 |
Manufacture of lacquerware |
 |
Manufacture of all types of
matches |
 |
Manufacture of lime, cement, or
cement by-products |
 |
Stone blasting or crushing |
 |
Manufacture of plywood, wood veneer,
chip board or hard board |
 |
Manufacture of garment or shoes
except for export |
 |
Printing press |
 |
Newspaper publication |
 |
Silk combing, silk weaving or
printing of pattern or silk pattern |
 |
Manufacture of products from silk,
silk treads, silk cocoon or silk material |
|
Commercial Businesses |
 |
Retailing of all products except
those specified in Category C (Below) |
 |
Sale of mining products except those
specified in Category C |
 |
Sale of all types of food and
beverage except those specified in Category C |
 |
Sale of antiques, period antiques or
works of art |
|
Service Businesses |
 |
Tour agencies |
 |
Hotel business except hotel
management |
 |
Business under the law on
service-providing establishments |
 |
Photography, photographic developing
and printing |
 |
Laundry |
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Tailoring and dressmaking |
|
Other Businesses |
 |
Internal transport by land, water,
or air |
Category
C Open to Aliens |
Industrial and
Handicraft Businesses |
 |
Manufacture of animal feeds |
 |
Extraction of vegetable oil |
 |
Manufacture of embroidering and
knitting products including weaving, dyeing, and
pattern printing |
 |
Manufacture of glass containers
including light bulbs |
 |
Manufacture of crockery |
 |
Manufacture of writing and printing
paper |
 |
Rock salt mining |
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Mining |
Commercial
Businesses |
 |
Wholesales of all types of products
within the country except those specified in
Category A (Above) |
 |
Export of all types of
products |
 |
Retailing machinery, equipment and
tools |
 |
Sale of food and beverage for the
promotion of tourism |
Brokerage or agency |
 |
Auctioneering |
Service Businesses |
 |
Except for those specified in
Category A and Category B |
Other Businesses |
 |
Other constructions except those
specified in Category A |
Many
American-owned enterprises have invoked the provisions of
the Treaty of Amity and Economic Relations between
Thailand and the United States to claim exemption from
the law. The treaty requires national treatment be
granted to persons of each country by the other country.
To receive protection, Americans must register under the
treaty. Although on paper the treaty appears
self-executing, the Thai Government will not recognize
the American applicant until such applicant proves its
American nationality.
D. Permits
An alien desiring to engage in any business specified in
Category C as listed above must submit an application to
the Department of Commercial Registration and must
receive a permit - an Alien Business License - prior to
beginning business activities. Permits will be valid for
a fixed period and will be subject to conditions therein
stated.
Ministerial Regulations
under Section 8 of the Law and recent
announcements of the Department established the
following standard conditions for companies
applying for Alien Business permits: |
 |
The total debt financing used in the
business shall not exceed seven times the capital
owned by the shareholders, partners and
proprietors of the business |
 |
Money remitted from abroad shall not
be less than the amount declared as capital
investment to be made in Thailand |
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The number of Thai and alien
directors shall be in proportion to capital held |
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At least one person responsible for
operating the business must have his domicile in
the Kingdom |
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Upon expiration of the permit, the
portion of the capital of the shareholders,
partners or business proprietors owned by Thai
nationals shall not be less than that owned by
aliens. |
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