There is no general licensing requirement
for foreign investors in Thailand. Restrictions on the
percentage of alien ownership of commercial banks, finance
companies, commercial fishing, aircraft, commercial
transportation, commodity export, mining and other enterprises
exist under various laws, Cabinet policies, trade association
regulations, etc. In connection with seeking promotion
by the Board of Investment, Thai participation requirements
will generally be prescribed
The Alien Occupation Law requires that every alien
working in Thailand obtains a work permit with few exceptions.
At the present time, 39 occupations are closed to aliens,
including architecture, civil engineering, accounting
and law.
Generally, aliens may start working only after a work
permit is issued. In practice, little difficulty is
experienced in obtaining work permits for qualified
aliens for positions for which qualified Thai nationals
are not available.
The Immigration Law prescribes a number of visa categories.
Aliens wishing to reside and work in Thailand need a
non-immigrant visa, which is initially valid for 90
days or 1 year and is renewable.
The procedures to acquire a non-immigrant visa valid
for 1 year are usually complicated and are linked to
procedures of the Labor Department governing work permits.
Aliens of most nationalities may enter Thailand for
periods of between 15 and 30 days without a visa.
The most important law governing majority alien-owned
businesses in Thailand is the Alien Business Law, which
controls three broad categories of businesses. Generally,
businesses in category A are closed to aliens, while
businesses in categories B and C are open to aliens
under some conditions. There remain a number of businesses,
including most manufacturing businesses, which do not
fall within any of the three categories and are open
for investment by aliens.
The 1996 Treaty of Amity and Economic Relations between
Thailand and the USA provides an exemption from the
restrictions of the Alien Business Law for US nationals
and corporations for most (but not all) controlled businesses.
"Alien” means a natural person and juristic person
without Thai nationality, including a company with half
or more than half of its shares held by aliens, or a
company with half or more than half of its shareholders
being aliens.
The new Act prescribes 42 restricted businesses
in 3 categories as follows:
Category A
Businesses under this category is strictly prohibited
to foreign individuals or juristic entities for special
reasons. Such restricted businesses include:
»
Newspaper publication, radio
or television station business
»
Rice, filed crops or horticultural
farming
»
Livestock farming
»
Forestry and wood processing
from natural forests
»
Fishery and wood processing
from natural forests
»
Extraction of Thai herbs
»
Trade and auction of Thai antiques
or objects of national historical value
»
Manufacture or casting of Buddha
images and manufacture of alms bowls
»
Trading in land
Category B
Businesses under this category is also prohibited
to foreigners, but may be permitted if the business
entity concerned receives the approval of the Cabinet.
Such businesses are as follows:
Chapter 1: Businesses involving
national safety or security.
»
Manufacture, sale and maintenance
of firearms, ammunition, gunpowder and explosives,
components of firearms, ammunition and explosives,
armaments, military ships, aircraft or vehicles,
accessories or components of war equipment
of all kinds.
»
Domestic land, water or air
transport, including domestic aviation business
Chapter 2: Businesses affecting arts, culture,
traditional customs and folk handicrafts.
»
Manufacture of wood carvings
»
Trade in antiques or objects
of art, being Thai works of art or handicrafts
»
Silkworm raising, manufacture
of Thai Silk threads, Thai Silk weaving or
Thai Silk pattern printing
»
Manufacturing of Thai musical
instruments
»
Manufacture of products from
gold, silver, niello, bronze or lacquerware
»
Manufacture of crockery or
earthenware which are Thai cultural arts
Chapter 3: Businesses affecting natural resources
or the environment
»
Manufacture of sugar from sugar
cane
»
Salt farming, including efflorescent
salt production
»
Rock salt mining
»
Mining, including stone blasting
or crushing
»
Wood proceeding to make furniture
and utensils
Category C
Businesses under this category are open to foreigners
but are subject to receipt of approval from the Committee.
Such businesses are as follows:
»
Rice farming and flour production
»
Fishery business matters
»
Forestry business matters
»
Production of plywood, veneer
board, chipboard or hardboard
»
Production of lime
»
Accounting service business
»
Legal service business
»
Architecture service business
»
Engineering service business
Construction, except for:
»
Construction services for the
public utilities
»
Other construction as prescribed
by the ministerial regulations
Broker and agent business, except for:
»
Being broker or agent for underwriting
securities matters
»
Being broker or agent for trading
or procuring goods or services for the business’s
production
»
Being broker or agent for trading,
purchasing goods or distributing the business
for seeking foreign markets (in this case
the business has to have a registered capital
of at least 100,000,000 Baht)
»
Being broker or agent as prescribed
by the Ministerial Regulations
»
Auction
»
Native product trading as well
as producing which is not yet forbidden by
law
»
Retailing goods (in this case
the business must have a registered capital
of at least 100,000,000 Baht)
»
Wholesaling goods (in this
case the business must have a registered capital
of at least 100,000,000 Baht)
»
Advertising business
»
Hotel business
»
Guide and tour business
»
Selling food and beverage business
»
Plant cultivation business
»
Other service business under
the ministerial regulations
Other businesses not mentioned in these three categories
are opened to aliens but must have a minimum capital
of 2,000,000 Baht.
In addition the Treaty of Amity and Economic Relations
between Thailand and the USA provides an exemption from
the restrictions in the Alien Business Act for US nationals
and corporations for most controlled businesses. There
is also the possibility of exemption under treaties
to which Thailand is a party, as well as for businesses
promoted by the BoI.
In the case of doing business carried on by an alien,
a minimum capital is 3,000,000 Baht. In the case of
businesses under Category B, at least 2/5 of the directors
must be Thai nationals and a minimum of 40 percent of
the shares must be held by Thai persons, which minimum
may be reduced to 25 percent by Cabinet approval. Businesses
under Categories B or C may be subject to conditions
such as minimum debt/equity ratio, number of alien directors
resident in Thailand, period of investment, technology
and assets, etc.
