Foreign Business License (FBL) Thailand

A Foreign Business License (FBL) is the legal permit that allows foreign investors in Thailand to hold a majority or 100% stake in a company operating in sectors that are otherwise restricted by the standard 49% foreign ownership limit.

However, obtaining an FBL is a complex process that requires careful planning and documentation. The application process typically takes 3 to 6 months, with the Foreign Business Committee taking up to 60 days just to review and decide on an application.

This guide will walk you through the FBL application process, outlining the legal framework, eligibility requirements, and alternatives to help you make an informed decision for your business in Thailand.

An Overview of Foreign Business License (FBL) in Thailand

What is the Foreign Business Act (FBA)?

The Foreign Business Act (FBA) is the primary law regulating foreign ownership and participation in Thai businesses. It aims to protect key national industries by generally limiting foreign ownership in a Thai company to a maximum of 49%, with at least 51% of shares held by Thai nationals.

To exceed this 49% limit in a restricted business activity, your company must apply for and be granted a Foreign Business License (FBL) from the Department of Business Development (DBD). 

FBL applications are evaluated by the Foreign Business Committee, which assesses whether your business will benefit Thailand’s economy through job creation, technology transfer, or other contributions. 

Please note that the decision regarding the approval by the committee is discretionary, and the final decision is binding.

What is Considered a ‘Foreign Business’ Under the FBA?

Under the FBA, a business is defined as “foreign” if it meets any of the following criteria:

• It is a company incorporated outside of Thailand.
• It is a Thai-registered company where 50% or more of the shares are held by foreigners.
• It is a partnership where the managing partner or manager is a foreigner.
• It is any business where foreigners have effective management or control, regardless of the official shareholding structure.

If your business fits any of these definitions, it is subject to the FBA’s restrictions and will require an FBL to operate in regulated sectors.

What are Restricted Activities Under the FBA?

The FBA restricts over 50 business activities grouped into these three lists to protect Thai economic interests, culture, and security. While List 1 businesses are completely off-limits to foreigners, Lists 2 and 3 allow foreign participation only under strict licensing and ownership conditions. 

As a foreign investor, your first step is often to identify where your intended business falls, as this defines your market entry options.

Here is an overview of FBA restrictions for foreign businesses in Thailand: 

Levels of Restriction	Details	Examples
List 1: Activities Prohibited to Foreigners	Foreigners are strictly prohibited from engaging in these businesses for “special reasons,” and no approval or license can be granted. These activities are considered critical to national identity, security, and culture.	– Operating press, radio, and television broadcasting stations. – Rice farming, crop growing, livestock farming, and fishing. – Forestry and timber processing. – Extraction of Thai medicinal herbs. – Trading and auctioning objects of historical value. – Land trading. – Making or casting Buddha images and monk alms-bowls.
List 2: Activities Restricted to Thai Nationals (Require Cabinet Approval)	Foreigners may engage in these businesses only if they obtain an FBL and approval from the Minister of Commerce and the Cabinet. Additionally, the company must be at least 40-50% Thai-owned (sometimes reduced to 25% with special approval), and a majority of Thai directors.	– National safety and security (e.g., arms trading, domestic aviation). – Impact on arts, culture, traditions, customs, and folklore handicrafts. – Impact on natural resources and the environment.
List 3: Activities Where Thai Nationals Are Not Ready to Compete (Require FBL)	Foreigners can operate in these sectors after obtaining an FBL. This list covers many service industries where the government aims to give Thai companies a competitive advantage.	– Legal services. – Accounting. – Architecture and engineering. – Advertising. – Other service businesses are broadly defined by ministerial regulations.

Eligibility Criteria for Foreign Business License (FBL) in Thailand

To apply for an FBL in Thailand, your company must meet several core eligibility criteria before you can even begin preparing your documents. The authorities will first assess whether your business is a suitable candidate for operating in a restricted sector.

Key eligibility criteria for FBL includes:

• Your business must be a legally registered entity.
• The intended business activities must fall under List 2 or List 3 of the Foreign Business Act.
• You must meet any specific ownership and management criteria for that business category. For List 2 businesses, this typically means having at least 40% Thai ownership and ensuring two-fifths of the board are Thai nationals, though some exceptions can apply.
• The applicant should have no criminal record or prior business-related legal violations in Thailand.

Key Requirements for an FBL Application

Once you’ve confirmed your eligibility, the next step is to prepare the necessary capital and documentation for your application.

1. FBL Capital Requirements

• The minimum registered capital for FBL applicants is generally not less than THB 2 million.
• Be aware that ministerial regulations may impose higher capital thresholds for certain business activities, sometimes up to THB 100 million.
• The capital must generally be fully paid-up and remitted into Thailand within a prescribed timeframe after approval.

2. Documentation Required for FBL in Thailand

You will need to compile a comprehensive set of documents, including:

• A detailed business plan outlining your operations, market analysis, and financial projections.
• Financial statements demonstrating your company’s financial stability.
• Corporate registration documents and proof of your company structure.
• Identification documents for all shareholders and authorized directors.
• Evidence of capital payment and proof of funds remittance into Thailand.

To avoid delays from incomplete paperwork, Emerhub’s experienced experts can help you gather all necessary documents, prepare compliant financial statements, and provide Thai translations where required.

The Foreign Business License Application Process in Thailand

The FBL application process requires detailed documentation and adherence to capital and ownership criteria for foreign businesses. Depending on the complexity of your organization, an FBL application takes roughly 3 to 6 months. Here is an overview of the application process:  

1. Preparation and Documentation: Compile all necessary documents, including company registration and shareholder information, financial statements, paid-up capital, business plan, etc. 
2. Submission of Application: Submit the completed application form and supporting documents to the DBD and pay the required application and registration fees. The Ministry conducts a preliminary review to confirm document completeness. 
3. Review by the Foreign Business Committee: The Foreign Business Committee will evaluate your application. During evaluation, they mainly focus on the economic and social benefits your business brings to Thailand. This includes factors such as local employment and technology transfer. They may request additional information during this stage.
4. Obtaining the License: Once your application is approved and all conditions are met, Thai authorities will issue the Foreign Business License. This means you would be able to legally operate in the restricted sector.

The entire process, from application submission to a final decision from the Minister of Commerce, typically takes around 3-6 months. The review period by the Minister alone is up to 60 days.

What to do if your FBL Application is Rejected?

If your FBL application is rejected, you have the right to submit a written appeal to the Minister of Commerce within 30 days of receiving the rejection notice. The Minister must review and decide on the appeal within 30 days. It’s important to know that the Minister’s decision on the appeal is final and binding.

If the appeal is unsuccessful, you cannot legally operate in Thailand’s restricted sectors. And continuing operations may result in penalties. Therefore, it is advisable to consult Emerhub local experts before submitting your application. Our team will review and prepare necessary documents to streamline the process and reduce the chances of rejection.

Alternatives to a Foreign Business License in Thailand

Given that the FBL process can be lengthy and its approval is discretionary, many foreign investors explore alternative pathways to achieve majority or 100% foreign ownership in Thailand. The two most common alternatives are:

A. Board of Investment (BOI) Promotion

Applying for promotion from Thailand’s Board of Investment (BOI) is a popular alternative for businesses in targeted industries that contribute to economic development, such as high-tech manufacturing, digital industries, and certain service sectors. Instead of going through the standard FBL application, BOI-promoted companies can obtain a Foreign Business Certificate. This certificate legally grants them the right to conduct their restricted business activities with majority or full foreign ownership.

B. US-Thai Treaty of Amity

This treaty provides special privileges to U.S. citizens and American companies, allowing them to establish businesses with up to 100% foreign ownership in most sectors without needing an FBL. It offers American investors preferential treatment, enabling them to bypass many of the FBA restrictions.

To utilize the treaty, the company must register with the Ministry of Commerce and comply with its specific regulations.

It’s important to note that certain sectors, including communications, transportation, and banking, remain restricted even under the treaty.

In addition to these, other business forms such as export companies, manufacturing, and large-capital trading companies also provide legal avenues for 100% foreign ownership without an FBL.

These alternatives often provide more certainty, operational flexibility, and significant tax or administrative benefits compared to the standard FBL route.

Secure your Foreign Business License in Thailand with Emerhub

To assist you in establishing a foreign-owned company in Thailand, Emerhub provides end-to-end support tailored according to your business needs. Our experienced experts will help you explore options to have majority stakes in a Thai company whether through an FBL, BOI Promotion, or through the U.S.-Thai Amity Treaty. 

You can request a complimentary call with our experts by filling out the form below.