Starting a Business in Thailand as a Foreigner — 2025 Guide

THE FOREIGN BUSINESS ACT (FBA) The Foreign Business Act B.E. 2542 (1999) restricts or prohibits foreigners from owning or operating most Thai businesses. It divides restricted activities into three lists: List 1 (Prohibited): businesses foreigners can NEVER own — newspaper, radio/TV, farming, land trading, Thai antiques dealing, and several others. No exceptions. List 2 (Require Cabinet approval): businesses involving national security, environmental impact, or significant cultural concern. Practically: very hard to obtain approval. List 3 (Require Foreign Business Licence): most retail and wholesale, agricultural product trading, internal land transport, hotel operations, accounting, legal services, advertising, auctioning, and most service businesses. A foreigner CAN own these with a Foreign Business Licence (FBL) — but FBLs are rarely granted and the application process is lengthy and uncertain. WHAT FOREIGNERS CAN LEGALLY DO IN THAILAND OPTION 1: BOI PROMOTION The Board of Investment promotes investment in specific industries and grants BOI-promoted companies the right to have majority foreign ownership (up to 100%) within the promoted activity. Qualifying industries: manufacturing, high-tech, R&D, medical services, logistics, digital infrastructure, clean energy. BOI promotion is only for genuine investment, not for small service businesses or freelancers. OPTION 2: TREATY OF AMITY (US CITIZENS ONLY) The US-Thailand Treaty of Amity allows US citizens (or US-registered companies) to own up to 100% of a Thai company in most business categories (excluding those in FBA List 1 and some List 2 activities). This is a significant advantage for Americans that other nationalities do not have. OPTION 3: FOREIGN BUSINESS LICENCE (FBL) Applicable to List 3 activities. Application is to the Department of Business Development (DBD). Processing: up to 12 months. Requires showing that the business brings benefits to Thailand (employment, technology transfer, etc.). Rarely granted to small operations. OPTION 4: THAI PARTNER / MINORITY STAKE For businesses not qualifying for the above: a Thai national holds 51%+ of the company. The foreigner holds up to 49%. This is legal — but creates genuine dependency on the Thai partner and is subject to Thai nominee scrutiny (see below). THE THAI COMPANY / NOMINEE STRUCTURE — THE RISK A common informal practice: a foreigner nominates Thai individuals to hold shares as "nominees" while the foreigner effectively controls the company. This structure is used to circumvent the FBA 51% Thai requirement. This practice is ILLEGAL under the FBA and the Civil and Commercial Code. It exposes both the foreigner and the Thai nominees to criminal prosecution. Nominee structures have been prosecuted — enforcement has increased. If you are being advised to set up a Thai company with nominee shareholders, you must understand the risk you are taking. COMPANY SETUP COSTS (LEGITIMATE THAI LIMITED COMPANY) Legal/accountant fees for company formation: 10,000–30,000 THB Registered capital: minimum 2 million THB for a company wishing to employ a foreign national (for work permit purposes); otherwise 1 million THB. Government fees (DBD registration): approximately 5,500 THB per 1 million THB registered capital. Ongoing: monthly accounting (2,000–8,000 THB/month), annual audit (15,000–40,000 THB), work permit fees. THE WORK PERMIT INTERACTION A foreigner who owns 49% of a Thai company is not automatically entitled to a work permit. Work permits are issued per job function, per employee — including owner-operators. The company must meet the 4:1 ratio (4 Thai employees per foreign employee). A small business with 1 foreigner must employ 4 Thai nationals to support 1 foreign work permit. WHAT AUSTRALIANS TYPICALLY DO IN THAILAND Small service businesses (restaurants, bars, cafes, yoga studios, dive schools) are commonly operated in partnership with Thai spouses, Thai partners, or under informal arrangements. The legal exposure of these arrangements is real and frequently underestimated until it becomes a dispute. Freelance remote work for overseas clients: the DTV is the cleanest path. No Thai business registration required, no FBA complication, no Thai employment relationship. RECOMMENDATION Before establishing any Thai business, consult a licensed Thai lawyer, not just an accounting firm or registration agent. The FBA restrictions, nominee risk, and BOI promotion eligibility must be assessed for your specific business type. This is an area where bad advice is common and the consequences of getting it wrong are significant. General guidance only. Not legal advice. Foreign Business Act restrictions require case-by-case legal assessment. Consult a licensed Thai lawyer before proceeding with any Thai business establishment.