What is a Foreign Business License?

A Foreign Business License is a permit issued by the Department of Business Development (DBD) under the Ministry of Commerce in Thailand. It allows foreign individuals or companies to engage in certain types of business activities that are restricted to Thai nationals or Thai majority-owned companies. The purpose of the FBL is to regulate foreign business activities in Thailand and protect Thai businesses.

Types of Business Activities Requiring an FBL

Under the Foreign Business Act, there are three types of business activities that require a Foreign Business License:

List 1: Business activities that are prohibited to foreigners. These include:

• Rice farming
• Land trading
• Retail trade businesses with a capital investment of less than 100 million baht per store
• Sale of goods or provision of services that are deemed to be a Thai national cultural heritage or tradition

List 2: Business activities that are restricted to foreigners. These include:

• Wholesale businesses
• Retail businesses with a capital investment of more than 100 million baht per store
• Businesses related to advertising
• Hotel businesses
• Tour agency businesses
• Guided tour businesses
• Transport businesses
• Construction businesses

List 3: Business activities that are permitted to foreigners only with a certain number of Thai nationals as employees. These include:

• Export businesses
• Import businesses
• IT businesses
• Engineering businesses
• Service businesses
• Other businesses as specified by the Cabinet

How to Apply for a Foreign Business License

The application process for a Foreign Business License can be complex and time-consuming. It is recommended to seek legal advice from a qualified lawyer or consultant before starting the process. Here are the basic steps to obtain an FBL:

1. Obtain a business visa or non-immigrant visa.
2. Register your company with the Department of Business Development (DBD).
3. Prepare the necessary documents, including a business plan, company profile, financial statements, and other relevant documents.
4. Submit your application to the DBD.
5. Wait for the DBD to review your application. This process can take up to three months.
6. If your application is approved, you will receive a Foreign Business License.

Costs of Obtaining a Foreign Business License

The cost of obtaining a Foreign Business License varies depending on the type of business activity and the amount of capital investment. Here is a general breakdown of the costs:

Application fee: 5,500 baht (approximately $180)

Processing fee: 2,000 baht (approximately $65)

Capital investment fee: 1% of the registered capital, up to a maximum of 5 million baht (approximately $164,000)

Additional Options for Foreigners

If you do not want to go through the process of obtaining a Foreign Business License, there are other options available to foreigners looking to start a business in Thailand:

Joint venture

A joint venture is a partnership between a foreign company and a Thai company. This option allows the foreign company to operate a business in Thailand without the need for a Foreign Business License.

Thai Limited Company

A Thai Limited Company is a company with at least 51% Thai ownership. This option allows the foreign investor to operate a business in Thailand without the need for a Foreign Business License.

Regional Operating Headquarters

Foreign investors can set up a Regional Operating Headquarters (ROH) in Thailand. An ROH is a type of company that provides managerial, technical, or financial services to its associated companies in the region. ROHs are allowed to own assets, employ staff, and generate income, and do not require a Foreign Business License.

Board of Investment (BOI) promotion

The Board of Investment (BOI) is a government agency that promotes foreign investment in Thailand. The BOI offers incentives, such as tax exemptions and land ownership rights, to foreign investors who invest in certain industries. If your business falls within the scope of BOI promotion, you may not need a Foreign Business License.

Obtaining a Foreign Business License in Thailand can be a lengthy and complicated process, but it is necessary if you want to engage in certain types of business activities. If you are a foreigner looking to start a business in Thailand, it is important to seek legal advice and explore all of your options before making a decision. The additional options available to foreigners, such as joint ventures, Thai Limited Companies, Regional Operating Headquarters, and BOI promotion, can make it easier to establish a business in Thailand without the need for a Foreign Business License. It is also important to consider the costs associated with each option before making a final decision.