Foreign investments in Thailand - read in the blog of the company COREDO

Foreign investments in Thailand

Updated: 05.01.2021

Mainly, foreign investment activities in Thailand are regulated by a piece of legislation called the FBA (Foreign Business Act). The thing is some parts of the law only apply to the local citizens. Resultingly, it means that foreign investors who plan to conduct business activities in the Kingdom can run into some restrictions dictated by the law.

Not to forget, foreigners are supposed to obtain a license for the provision of financial services if they plan to buy shares in any Thai company.

Necessities to obtain a license

In order to be able to conduct business activities in Thailand, foreign investors need to have approval from:

  • Head of the Department of Business Development (DBD);
  • Minister of Commerce.

Once a foreigner receives permission to register a business in a Thai IEAT, they have an obligation of getting a permit that authorizes carrying out activities restricted by the FBA.

The lists od documents that a foreign national has to submit to the DBD to obtain a foreign business license contains:

  • An application (including all necessary papers);
  • An ID of an individual who is authorized as their representative in Thailand.

Pricing and timing

When it comes to the pricing, the application itself costs 65 dollars. The price of the license can vary from 1250 dollars to 15650 dollars, which is quite a wide range. The licensing fee depends on several factors: license type, application type (submitted by physical persons or legal entities), amount of share capital.

As for the time range, it can take 3-12 months to receive a foreign operator license in the Kingdom of Thailand. For a Thai business certificate, the process may take 2-6 months.

No license needed?

There is an exception: licensing requirements do not apply to each and every one. Business operators who obtain investment from the Board of Investment as well as licensed operators do not need to follow those requirements.

Moreover, investors who originate from countries with which Thailand has signed an investment treaty are not required to get a license either. Yet these investors need to make sure that the business they run is covered by the treaty.

What to do before and after

Before setting up their business in Thailand, investors have the opportunity to request an assessment from the DBD or ask for advice at a government agency. The request needs to contain the company’s structure of share capital and all planned activities. It is the company’s investor or representative/legal advisor who can submit such a request.

After receiving a license, a foreign business operator has to:

  • Make a minimum investment during a specified period;
  • Showcase their license at the business location;
  • Keep the ratio loan vs equity of seven to one;
  • Have a minimum of one authorized representative;
  • Within 5 months starting from the end of each fiscal year, submit financial statements;
  • Submit a report about the know-how or the transfer technology to the Ministry of Commerce.

These requirements are mandatory. A failure to comply with them can result in severe consequences: penalties or license revocation.

Looking for advice on opening a foreign investment company in Thailand? Contact COREDO and we will do our best to help.






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