How to Open a Restaurant in Thailand

Are you considering launching your own restaurant venture in Thailand? While the Thai market offers significant opportunities, successfully opening and operating a restaurant as a foreigner requires careful navigation of specific regulations, licensing procedures, and foreign ownership laws.

In this article, we will walk you through the legal requirements, key considerations regarding foreign ownership, and the step-by-step process involved in opening your restaurant in Thailand the right way.

Understanding Foreign Ownership Rules for Opening a Restaurant in Thailand

Before we discuss the requirements and process of opening a restaurant, the first thing to understand is Thailand’s Foreign Business Act (FBA). 

Under Thailand’s FBA Act, F&B businesses like restaurants are under list 3 and fall under activities where foreign majority ownership is restricted. This means that for most standard restaurant setups, foreigners are not allowed to own 100% or even a majority share in Thailand. The foreign ownership is limited to a maximum of 49% of the company shares. The remaining 51% must be held by Thai nationals or Thai entities.

To implement this structure, the most common vehicle is a Thai Limited Company. For practical operations, particularly for handling specific registrations or license applications, having at least one authorized Thai director is often recommended and highly advantageous.

Essential Licenses and Permits for Opening a Restaurant in Thailand

Mandatory F&B Licenses

Because restaurants handle and serve food and beverages to consumers, it is important to follow regulations in compliance with health and safety regulations. Acquiring these licenses is crucial for operating a restaurant legally according to the Thai FDA standards: 

1. Food & Beverage License – essential for any establishment serving food to the public. It ensures compliance with food safety standards, including proper sanitation, storage, and handling practices. Employees often need food handler permits after completing state-approved courses on hygiene and food safety. Additionally, health inspections are conducted periodically to maintain the license.
2. Restaurant License – allows restaurants to operate legally within their jurisdiction. It is typically issued by local or state authorities and may require an Employer Identification Number (EIN) for tax purposes. Restaurant owners must register their business name and renew the license periodically.
3. Liquor License – if you are serving alcoholic beverages at your establishment, you would need a liquor license. There are different types of liquor licenses, such as on-premise licenses for alcohol consumed on-site (e.g., in a restaurant or bar). Some jurisdictions limit the percentage of revenue that can come from alcohol sales under a restaurant liquor license. 
4. Music License – If a restaurant plays copyrighted music—whether live or recorded—it must secure a music license from organizations like ASCAP or BMI. This ensures compliance with copyright laws and avoids legal penalties.

Building and Safety Permits

To open a restaurant in Thailand, you would also need to obtain required building and safety permits. This ensures that your establishment operates legally and safely according to commercial building codes in Thailand. Here’s an overview of necessary building and permits:

• Construction Permit – essential for any new building or renovation. It ensures that the structure complies with zoning and construction regulations. This permit is obtained from the local district office where your restaurant is located. The process involves submitting detailed building plans and undergoing inspections to verify compliance with building codes.
• Building Registration – involves obtaining a certification of registration for the building where your restaurant is situated. This document is crucial for obtaining other licenses, such as the restaurant license. It confirms that the building is legally constructed and suitable for commercial use.
• Fire Safety Certificate – required to ensure that the restaurant meets all fire safety regulations. This includes having adequate fire exits, fire extinguishers, and smoke alarms. The certificate is issued after an inspection by local authorities, typically the Bangkok Metropolitan Administration (BMA) in Bangkok.
• Other Permits
  • Environmental Permits – required for businesses that impact the environment. Restaurants may need these if they generate significant waste or use resources that affect the environment.
  • Signage Permits – Restaurants must obtain a signage permit from local authorities to display signs outside their premises. This ensures compliance with local regulations concerning size, placement, and content.

Business Operation Permits

To open a restaurant in Thailand, you need additional permits to legally operate your establishment. Here’s what you need to acquire before you operate a restaurant in Thailand

• Business Registration – your restaurant must be registered as a company with the DBD. This includes choosing a company name, obtaining a company address, and preparing incorporation documents
• Income Tax Registration – involves obtaining a tax identification number and filing annual tax returns. The company must also withhold income tax for employees and submit it to the Revenue Department.
• VAT Registration – if your restaurant has an annual turnover exceeding 1.8 million THB must register for Value-Added Tax (VAT) with the Revenue Department. VAT registration is mandatory if the company has foreign employees or reaches the specified revenue threshold.

Step by Step Process of Opening a Restaurant in Thailand

To open a restaurant in Thailand, you must register a company with the DBD under the Ministry of Commerce, secure a location for your business, and acquire the necessary licenses. Failure to comply with registration and licensing requirements can result in severe penalties, including fines and potential imprisonment. 

Here’s an overview of the process to open a restaurant in Thailand: 

1. Secure a location for your restaurant – select the right location with enough foot traffic and sign a lease agreement. For longer-term security, it is advisable to register the lease with the Land Office, allowing leases to extend up to 30 years and protecting the business if the property changes ownership.
2. Company registration – Under the Company Registration Act, you must register your company in Thailand before you can operate your business. This includes reserving a unique company name and submitting all the required documents. This process typically takes about a week to complete. Here’s what you will need:
   • Memorandum of Association – Outlines your company’s objectives, structure, and capital.
   • Articles of Association – Details your restaurant’s internal management and rules.
   • Shareholder and Director Information – Includes ID documents and proof of address for all shareholders and directors.
3. Obtain the necessary licenses – this includes a restaurant license from the local district office, a liquor license if you are serving alcohol, a music license (if applicable), and a food and beverage license. 
4. Open a Company Bank Account – Once your restaurant is registered, open a bank account in your company’s name. This is necessary for financial transactions and tax compliance. You will need the company registration documents to open the account.
5. Register for Taxes – Register your company for Value-Added Tax (VAT) and income tax with the Revenue Department. VAT registration is mandatory if your annual turnover exceeds 1.8 million THB or if you have foreign employees. 
6. Social Fund Registration – Register your Thai employees with the Social Security Office. This is required for all Thai employees and helps in obtaining work permits for foreign staff if needed. 

Emerhub provides comprehensive support in company registration and license procurement to legally establish your business in Thailand. Our local experts handle the end-to-end company incorporation process, ensuring your legal entity is properly established according to Thai regulations. This includes navigating foreign ownership rules. 

Emerhub also manages the complex application procedures for essential licenses such as the restaurant business license, food and beverage permits, alcohol licenses, and health and safety certifications.

Contact our local experts and let us help expedite the importation process. Fill out the form below!