Business Advisory firm focusing on company setup in Thailand, including BOI application, Thai limited, Immigration and labor consulting.

Overview – Investment in Thailand

Board of Investment (BOI)

Thailand is a prime destination for foreign direct investment. With its 65 million people, Thailand is in the heart of South East Asia and on the best way to become the hub in South East Asia for multinational companies.

This is not surprising – Thailand ranks as one of the most competitive markets in the region and among the top 15 countries worldwide for investor protection. Investment in Thailand This has made Thailand the 8th most attractive destination globally for foreign direct investments.

However, restriction on foreign ownership, business purpose, immigration and labor regulation, capital controls etc. makes investing into Thailand very painful. Non-Thai nationals are subject to numerous regulations with regards to staying, working and living in Thailand and need to follow many, in-transparent laws.

Guide to gain majority foreign ownership in Thailand:

1. For foreigners who want to have invest in Thailand and gain majority foreign ownership of a Thai company, they first need to check whether their business is allowed to be owned by foreigners. The Thailand Foreign Business Act B.E. 2542 divides industries into three groups:

  1. The first group is composed of industries that are prohibited for foreigners because of special reasons.
  2. The second group contains industries that are related to the national safety or security or affecting arts and culture, tradition, folk handicraft or natural resource and environment. For this group the cabinet has to grant permission for foreign ownership
  3. The third group contains industries where Thai nationales are not yet ready to compete with foreigners.  For these industries, the Director-General of the Commercial Registration Department (“CRD”) can grant permission for foreign ownership.

The lists of groups can be shown here. The license that resembles permission for foreign ownership is named foreign business license (FBL).

2. In case the majority-owned business is not part of list one or list two, the foreign investors has three options to obtain a foreign business license (FBL):

  1. The foreign investor may apply for a foreign business license (FBL) directly with the commercial registration department of Thailand. This option is not popular among foreign investors because the process may take up to several months and the chance of success is not 100%.
  2. The foreign investor is of American nationality and makes use of the Thai-Amity Treaty.
  3. The foreign investor may apply for a promotion by the Board of Investment (BOI) of Thailand. The commercial registration department (CRD) issues a foreign business license (FBL) in almost all cases to foreigners that have received promotion from the Board of Investment (BOI).

However, the Board of Investment only grants permission to foreigners who are investing in industries that are beneficial to the Kingdom of Thailand. In addition, the Board of Investment (BOI) may grant tax holidays up to 8 years and import duty exemptions for industries that are of special important to the economic development of Thailand.

All three options shall be explained in detail:

Application for a foreign business license (FBL) with the commercial registration department (CRD) of Thailand

Majority ownership by an American national based on Thai-Amity Treaty

Application for promotion by the Board of Investment (BOI) of Thailand

For foreign investors who are unable to either obtain a foreign business license (FBL) through the commercial registration department or by obtaining a promotion by the Board of Investment (BOI), there are two further options:

Cross-holding structure between two Thai companies

Full control of Thai company by issuing two classes of shares

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