The Foreign Business Act (FBA) came into force in 1999. One would think this Act regulates business activities conducted by foreigners but this, however, is not the case. The FBA mainly aims at defining the term “foreigner and sets out what activities cannot be conducted by foreigners or have to remain controlled in a certain way.
Definition of a Foreigner
A foreigner under the FBA is a natural person that does not have Thai nationality or a juristic person that is not registered in Thailand. However, also a juristic person that is registered in Thailand but of whom more than half of the capital shares are held by non-Thai natural and/or juristic persons is considered foreign. The same goes for a limited partnership or registered ordinary partnership having a foreign individual as the managing partner or manager.
Foreigners as defined here above cannot conduct any business in Thailand without prior approval from the relevant authority. Two types of “special” foreigners may operate (certain) businesses upon obtaining a License from the Director-General
What We Can Do for You
The process of receiving the permission from the Minister of Commerce (with the approval of the Cabinet) or the Director-General (with the approval of the Committee) is – as are most administrative procedures in Thailand – not self-evident. The FBA foresees oppressive penalties (fines up to 1M THB and even imprisonment) for any foreigner committing an infringement upon the act. Having a reliable partner that keeps an eye on the continuous fulfilment of the conditions is thus an absolute must.
