The Foreign Business Act in Thailand: What Foreigners May and May Not Do

Reviewed by ThaiLawOnline, a licensed Thai law firm practising in Thailand since 2006. Thai lawyer of record: Wichuda Atthamethakon, LL.M., Thai Bar Licence 3149/2556.

Last updated on August 22, 2026

The Foreign Business Act decides which businesses a foreigner may run in Thailand, and the 2026 registration rules decide whether the company you set up will survive scrutiny. Both changed this year.

Last reviewed: 22 August 2026. Every section number below was read from the official English translation of the Foreign Business Act B.E. 2542 prepared for the Department of Business Development. The registration orders were read from the Department of Business Development and Ministry of Commerce.

What the Act actually does

The Foreign Business Act B.E. 2542 (1999) does two things. It defines who counts as a foreigner, and it lists the businesses that a foreigner may not operate without permission. Everything else in the statute follows from those two points.

Most of the trouble foreigners get into in Thailand comes from misreading the first one. The Act does not ask about your passport. It asks about the company.

Who is a “foreigner” under section 4

Section 4 defines a foreigner as any of the following:

• a natural person who is not of Thai nationality;
• a juristic person not registered in Thailand;
• a juristic person registered in Thailand where at least one half of the capital shares are held by the two categories above, or where investment by them is at least equivalent to one half of the total capital;
• a limited partnership or registered ordinary partnership whose managing partner or manager is a non-Thai natural person;
• a juristic person registered in Thailand at least one half of whose shares are held by any of the above.

Two consequences are worth stating plainly. A Thai-registered company is a foreigner under this Act if half or more of its capital is foreign held, so the familiar 49 percent figure is not a tax rule or a convention, it is the point at which section 4 stops applying to you. And a partnership can be a foreigner purely because of who manages it, regardless of the capital split.

Section 4 also provides that shares represented by bearer share certificates are deemed held by foreigners unless a Ministerial Regulation says otherwise. If your structure relies on bearer instruments, assume they count against you.

The three Lists, under section 8

Section 8 is the operative prohibition, and it distinguishes three categories:

• List One. Businesses not permissible to foreigners at all, by special reason. There is no licence route. Newspaper and broadcasting businesses, farming of several kinds, land trading and similar activities sit here.
• List Two. Businesses affecting national safety or security, arts, culture, traditions, folk handicrafts, natural resources or the environment. A foreigner may operate these only with permission from the Minister with the approval of the Cabinet.
• List Three. Businesses in which Thai nationals are “not yet ready to compete with foreigners”. This is where most service businesses sit, including a great deal of ordinary consulting, brokerage and retail activity. Permission comes from the Director-General with the approval of the Commission.

Section 8 opens with the words “Subject to section 6, section 7, section 10 and section 12”, and those cross references are the whole game. They are the lawful ways around the prohibition.

The three routes that make a restricted business lawful

1. A Foreign Business Licence, under section 17

The application goes to the Minister or to the Director-General depending on the List. Section 17 sets the timetable, and it is more generous to the applicant than the practice sometimes feels:

• the Cabinet (List Two) or the Director-General (List Three) must complete consideration within sixty days of filing;
• for Cabinet consideration, that period may be extended where there is an inevitable cause, but by no more than a further sixty days;
• once approval or permission is given, the licence must be issued within fifteen days.

Section 5 sets out what the decision is supposed to weigh: effects on national safety and security, economic and social development, public order and good morals, national values in arts and culture, conservation, energy, the environment, consumer protection, the size of the undertaking, employment, technology transfer, and research and development. If you are preparing an application, those are the headings to answer.

2. A Foreign Business Certificate under a treaty, sections 10 and 11

Section 10 disapplies sections 5, 8, 15, 17 and 18 for foreigners operating under a treaty to which Thailand is a party. Section 11 is the mechanism: you notify the Director-General, and the certificate must be issued without delay and no later than thirty days from receipt of the written notification. If the notification does not comply, the Director-General must tell you inside the same thirty days.

The best known example is the Treaty of Amity between Thailand and the United States. It is not the only one. Section 10 is drafted for any qualifying treaty, which is why Australians reach the same certificate route under TAFTA. What the Treaty of Amity gives that others do not is the breadth of its national treatment, not exclusive access to section 10.

3. BOI promotion

A promoted company obtains its certificate through the same section 11 route, on the strength of the promotion. This is the route that permits full foreign ownership in eligible activities. See our guide to the Board of Investment in Thailand.

Minimum capital, section 14

Section 14 sets the floor. The minimum capital a foreigner uses to start a business in Thailand must not be less than the amount prescribed by Ministerial Regulation, and in any case not less than two million baht. Where the business is one requiring permission under the Lists, the prescribed minimum must be not less than three million baht. The Ministerial Regulation may also fix the time within which that capital must be brought into Thailand.

There is a carve-out that is regularly missed: section 14 does not apply where the foreigner uses money or property derived as revenue from a business already operating in Thailand to start another business, subscribe for shares, or invest in another undertaking.

The 2026 registration crackdown, in the order it happened

The Act itself did not change in 2026. What changed is how hard it is to register a company that has a foreigner anywhere near it. The Department of Business Development issued four orders and two notifications, and most published summaries carry only one or two of them.

The Department’s own Legal Office summary, dated 16 December 2568, sets out the first package:

• Order 2/2568, in force 1 January 2026. Applies to formation of a partnership or limited company where a foreigner co-invests below 50 percent of registered capital, and also where no foreigner is a shareholder at all but a foreigner is a director with authority to bind the company. Each Thai partner or shareholder must file three months of bank statements showing a withdrawal or transfer matching their capital contribution.
• Order 3/2568. Applies to people connected with predicate offences or mule accounts on the Anti-Money Laundering Office list. Those partners, shareholders or directors must appear in person before the registrar before registration is accepted, with unexpired identification.
• Order 4/2568. Applies to the registered head office address where it is shared with entities already registered there. The registrar must check the address against civil registration records every time, and the applicant must produce a consent letter and proof of the right to use the premises.
• Order 5/2568. Applies where a partner, shareholder or director holds a State Welfare Card. That person must appear in person before the registrar, with the same document set.
• Two notifications fix who may witness a signature on a registration application, namely licensed auditors, accountants registered with the Federation of Accounting Professions, the head, managing partner or director of a quality accounting office, and licensed security enforcers. Those witnesses must register and verify their identity through the DBD Biz Regist digital system.

Two further orders followed in 2026:

• Order 1/2569, issued 16 March 2026 and in force 1 April 2026. It reaches amendments that admit a foreigner as a partner, or as a director with signing power. The signing partner or director must give a letter confirming that every partner or shareholder actually paid in their capital and is not assisting, supporting or fronting for a foreigner. A false statement carries criminal exposure.
• Order 2/2569, in force 1 August 2026. Where a foreigner co-invests or holds signing authority, an Investment Explanation Letter must be filed, together with three months of bank statements for the Thai investors paying in capital and for the representative or juristic person receiving it. Its significance is the reach: it extends scrutiny beyond formation to changes in shareholder and director structure after registration.

Read together, the practical position since 1 August 2026 is that a foreigner cannot be quietly added to an existing Thai company later. That was the ordinary workaround, and it is now the transaction the Department is looking hardest at. Our page on the 2026 nominee crackdown covers the enforcement side, and regulatory reform for companies covers the wider reform programme.

What the Cabinet approved on 12 May 2026, and why it is not law

On 12 May 2026 the Cabinet approved in principle a draft Royal Decree amending the categories of business in the Lists annexed to the Foreign Business Act, together with a draft Ministerial Regulation prescribing businesses that a foreigner may operate without a licence. The reporting described it as removing a number of service categories from the annexed Lists.

Three things follow, and they matter more than the headline:

• Cabinet approval in principle of a draft is not law. The Lists change when the Royal Decree is published in the Royal Gazette, and not before.
• No gazettal date has been published. Treat any article that describes these categories in the present tense with suspicion, because there is no commencement date to name.
• Published accounts do not even agree on how many categories are affected, splitting between eight and nine. We are not repeating a figure we cannot verify against the decree itself.

If your plan depends on a category leaving List Three, the plan is not yet available to you. Apply under the law as it stands, or wait for the Gazette.

Offences and penalties, and who actually gets charged

The penalty sections are widely misquoted, including on Thai law websites. These are the four that matter, read from the official translation.

Note what section 37 is not. It is not the nominee provision. Section 36 is. We have seen section 37 described as the provision that targets foreign principals in nominee arrangements, including in material published by law firms, and it is wrong: section 37 is the general offence of operating in violation of sections 6, 7 or 8. If you are reading advice that gets this backwards, be careful with the rest of it.

Note also what the court may order. Sections 35, 36 and 37 give the court power to order cessation, with a daily fine for defying that order. They do not give the court power to dissolve the company.

Section 41: the directors are personally liable

This is the provision that changes how a director should behave, and almost nobody puts it on the page.

Where a juristic person commits an offence under section 34, 35, 36 or 37, section 41 makes directors, partners and persons with authority to represent the juristic person personally liable if they connived at the offence or failed to take reasonable action to prevent it. The penalty is the same as the company’s: up to three years imprisonment, or a fine of 100,000 to 1,000,000 baht, or both.

“Failed to take reasonable action to prevent it” is not a high bar for a prosecutor. Put it next to Order 2/2569, which now requires a named director to sign an Investment Explanation Letter about the very shareholding that would be at issue, and the exposure is obvious. A director who signs that letter without checking where the Thai shareholders’ money actually came from is signing the evidence.

What to do about it

1. Check what List your activity is actually in before you assume you need a licence, and before you assume you do not.
2. Decide the route deliberately: licence, treaty certificate, or BOI. They have different timetables, different decision makers and different ongoing conditions.
3. Fund the Thai shareholders properly and document it. Since 1 January 2026 the bank statements are part of the file, and since 1 August 2026 so is an explanation letter.
4. Look at existing structures too. Order 2/2569 reaches later changes of shareholders and directors, so a structure that was registered without scrutiny can still meet it on the next amendment.
5. If you are a director, read section 41 and satisfy yourself before you sign anything.

Frequently asked questions

Does the Foreign Business Act stop a foreigner owning 100 percent of a Thai company?

Not by itself. The Act restricts the business activities in the three annexed Lists, not ownership as such. A foreigner may own a company outright where the activity is not restricted, or where a Foreign Business Licence, a treaty certificate under sections 10 and 11, or BOI promotion covers it. Where the activity is restricted and none of those applies, section 4 means a company with 50 percent or more foreign capital is itself a foreigner and cannot lawfully carry it on.

Is section 37 the nominee provision?

No, and this is the most common error in English-language material on the Act. Section 36 is the nominee provision, and it catches both the Thai nominee and the foreigner who allows the arrangement. Section 37 is the general offence of a foreigner operating in violation of sections 6, 7 or 8, which in practice means operating without the licence or certificate required.

Can a Thai court dissolve my company under the Foreign Business Act?

Sections 34 to 41 do not give the court power to dissolve a company. What sections 35, 36 and 37 give is an order to cease the operation, the joint operation or the shareholding, backed by a fine of 10,000 to 50,000 baht for every day the order is defied. That is severe enough in practice, because the business has to stop.

What is the minimum capital for a foreigner under the Act?

Section 14 sets a floor of not less than two million baht generally, and not less than three million baht where the business requires permission under the Lists, with the exact figure fixed by Ministerial Regulation. The floor does not apply where the money comes from revenue of a business the foreigner already operates in Thailand.

How long should a Foreign Business Licence take?

Section 17 requires the decision within sixty days of filing, extendable by up to a further sixty days only where the Cabinet faces an inevitable cause, and the licence must then be issued within fifteen days. A treaty certificate under section 11 runs on a shorter clock: the Director-General must issue it without delay and no later than thirty days from the written notification.

Did Thailand remove service categories from the restricted Lists in 2026?

Not yet. On 12 May 2026 the Cabinet approved in principle a draft Royal Decree amending the annexed Lists and a draft Ministerial Regulation on businesses not requiring a licence. Until that decree is published in the Royal Gazette the Lists are unchanged, and no gazettal date has been published.

I already have a Thai company. Do the 2026 orders affect me?

They can. Order 2/2569, in force since 1 August 2026, extends the checks beyond formation to changes in shareholder and director structure after registration. Adding a foreign shareholder or a foreign authorised director to an existing company now triggers the Investment Explanation Letter and the bank statement requirements.

Talk to a Thai lawyer before you file

Serving foreigners in Thailand since 2006, ThaiLawOnline.com advises on Foreign Business Licences, treaty certificates, BOI structures and company formation, and reviews existing structures against the 2026 registration rules. We will tell you plainly whether a structure will hold.

Schedule a consultation, or read our guides to registering a company in Thailand, setting up a company as a foreigner and company registration costs.

This article is general information, not legal advice for your situation. It states the law as read on 22 August 2026 from the official translation of the Foreign Business Act B.E. 2542 and from the Department of Business Development and Ministry of Commerce. Proposals described as approved in principle are not law and may change or lapse.