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Starting a business in Thailand can be a daunting challenge due to foreign investment restrictions.

Paramount of importance is whether a foreign investor can incorporate a wholly foreign owned subsidiary in Thailand, or whether a joint venture Thai partner is required in order to carry out an investor’s business endeavors.

Legal ASEAN provides a clear and comprehensive service to foreign investors

Overview of Foreign Investment

Market Entry

The Foreign Business Act (FBA)

The main law governing foreign investment and defining foreign ownership. The law restricts access to certain businesses (e.g., transport, retail and wholesale and services) for reasons of security, cultural heritage, or perceived competitive disadvantage. A foreign juristic entity is defined as an entity that is not registered in Thailand, or that is registered in Thailand and has a foreign shareholding equal to 50% or more of the total registered capital.

Foreigners currently may not retain majority control through nominees, and penalties apply for violations.

Notably, however, 100% foreign-owned businesses are permitted (though a special license called the Foreign Business License is likely required), except for 43 restricted businesses in three categories covered in the FBA. Some of Thailand’s free trade agreements and certain laws (e.g., the Investment Promotion Act and Industrial Estate Authority of Thailand Act) relax the ownership restrictions under the FBA. Some of the countries that Thailand has a free trade agreement with are the United States, Australia, and Japan. In particular, the agreement with the United States provides U.S. nationals to essentially be treated equivalent to a Thai national (some exceptions apply) and thus allows a U.S. national to wholly own a company in Thailand.

Board of Investment (BOI)

BOI is the principal government agency for encouraging investment in the country

Depending on the business which you which to conduct, obtaining approval from the BOI typically allows for investors to wholly own a company in Thailand.

It has wide discretionary powers to encourage investment in areas considered to be the most beneficial to Thailand's economic and social development. BOI incentives include: (i) tax privileges, such as exemption of corporate income tax and exemption of import duties on machinery, and (ii) non-tax privileges, such as the right to own land and the right to bring in foreign experts.

Types of Business Vehicles

Limited Company

The most common business form used in Thailand. It is formed through a process that leads to the registration of a memorandum of association and articles of association (by-laws), as its constitutive documents.


Public limited company

The procedure for setting up a public limited company is similar to a limited company. However, it is usually formed in order to list its shares in the Stock Exchange of Thailand (SET).


Branch office

An entity registered under foreign law and considered as the same legal entity as its head office.


Representative office

Established for limited business purposes and cannot render services to any person other than its head office or affiliated/group companies or earn income from any transaction. Such offices can only receive funds for payment of their expenses from their head office.



It can be divided into (i) ordinary partnership, (ii) ordinary registered partnership and (iii) limited partnership. Only the ordinary registered partnership that registered with the Ministry of Commerce (MOC) and limited partnership are legal entities, separate and distinct from the individual partners.

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