What is the Foreign Business Act?

If you're a foreigner looking to do business in Thailand, the Foreign Business Act (FBA) is the first law you need to understand. It defines who is "foreign" and what businesses foreigners can operate.

Who is a "Foreigner"?

Under the FBA, you're considered foreign if:

• You're not a Thai national
• Your company is incorporated outside Thailand
• Your Thai company has more than 49% foreign ownership
• Your Thai company has more than 49% foreign voting power

This last point is crucial—even if you personally own less than 49%, if total foreign ownership exceeds 49%, the company is classified as "foreign."

What Does the FBA Restrict?

The Act lists approximately 50 business categories where foreign participation is restricted. These fall into three lists:

List 1: Absolutely prohibited (media, farming, land trading) List 2: Restricted for national security (weapons, transport) List 3: Conditional (retail, services, restaurants, hotels)

Most foreigners encounter List 3 restrictions, which require either:

• Thai majority ownership (51%+)
• A Foreign Business License
• BOI promotion

Why This Matters

Operating a "foreign" business in a restricted category without proper licensing is illegal. Penalties include:

• Fines up to 1 million THB
• Imprisonment up to 3 years
• Business closure
• Deportation

The Bottom Line

The FBA isn't meant to block foreign investment—it's meant to channel it properly. Understanding the rules is the first step to compliant business setup.

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Need help navigating the FBA? Our team specializes in this.