Thailand eases foreign business red tape

Thailand’s Cabinet has approved in principle two pieces of draft subordinate legislation under the Foreign Business Act 1999, exempting eight service business categories from the requirement to obtain a foreign business licence, the government announced on May 12. Deputy Government Spokesperson for the Prime Minister’s Office, Patdarasm Thongsaluaykorn, announced the Cabinet meeting. The two instruments, a draft royal decree and a draft ministerial regulation, are designed to reduce duplication in regulatory procedures and bring oversight in line with the current economic environment. The draft royal decree amends Schedule Three of the Foreign Business Act 1999 to carve out one specific activity: agricultural futures trading conducted through designated futures trading centres where physical delivery of goods takes place. That activity will no longer require a foreign business licence in Thailand. The draft ministerial regulation lists eight service categories that foreign operators may carry out without a licence: telecommunications businesses fall under the National Broadcasting and Telecommunications Commission (NBTC), treasury centre businesses remain subject to Bank of Thailand oversight, securities and derivatives businesses are supervised by the Securities and Exchange Commission (SEC), and petroleum drilling continues to be governed by energy law. Rachada also confirmed that software development had been dropped from the draft ministerial regulation following concerns from relevant agencies about potential impacts on Thailand’s digital industry. The Commerce Ministry removed the category to balance investment promotion with protection for domestic operators. She said the purpose is to improve investment flexibility and bring regulations in line with the modern economic context. Each exempted category remains subject to its existing sectoral regulator. The changes had been misrepresented in some reporting, Government Spokesperson Rachada Dhnadirek said. The exempted categories either involve advanced technology or are already governed by dedicated legislation and closely supervised by state agencies. The purpose is to improve investment flexibility and bring regulations in line with the modern economic context. The changes are intended to remove duplicate approval steps, not to allow unsupervised foreign operation.

Why it matters for Phuket buyers

Anything that changes how foreigners may operate a business in Thailand touches property ownership, because a large share of villa purchases here are structured through a Thai company.

Be precise about what does and does not change, though. Exempting service categories from the foreign business licence requirement does not alter the Land Code: a foreigner still cannot hold freehold title to land, and a company used to hold land for a foreign beneficial owner is scrutinised on exactly the same basis as before. Nothing in a Foreign Business Act amendment makes a nominee structure lawful.

Where it can matter is in the legitimate operating business alongside the property (a villa management company, a rental operation, a services business), and in the cost and time of setting one up. If your plan involves running something rather than simply owning, the sector list is worth reading with a lawyer.

The general principle stands regardless of the reform. Have counsel you appointed, not one introduced by the seller, set out which ownership route applies to the specific asset: condominium freehold within the building’s 49% foreign floor-area allowance, a registered lease over land, or a company with a real commercial purpose. Those three are different, and only the first is straightforward.

Source: The Thaiger