If foreigners wish to invest or operate business in Thailand, the proportion of shareholding between Thai persons and foreigners must be considered, since Thailand’s Foreign Business Act B.E. 2542 (1999) controls investments of foreigners. Under the Foreign Business Act, a company is deemed foreign or alien if 50% of the registered capital is held by foreigners. There are specific types of business that foreigners are prohibited from operating, as specified in the Annex 1 list; they may be permitted to operate businesses under List 2 and List 3, unless there is a reasonable cause not to allow them.
There are 3 categories of businesses in the Lists annexed to the Foreign Business Act B.E. 2542 (1999):
List 1 – Businesses not permitted for foreigners to operate, owing to special reasons, such as rice farming, field crop farming, orchard farming, herb extraction, land trading, etc.;
List 2 – Businesses related to national safety or security or affecting culture, arts, traditional customs, folk handicrafts, or natural resources and the environment. Foreigners will be allowed to operate businesses in this list if granted permission from the Minister of Commerce, with cabinet approval. Businesses in this list include firearms, ammunition, gunpowder and explosives, trading of antiques or art objects such as Thai arts and handicrafts, and others;
List 3 – Businesses in which Thai people are not ready to compete with foreigners. Foreigners are able to operate these businesses if granted permission from the Director-General of the Department of Business Development, with approval by the Foreign Business Committee. Businesses in this list comprise rice milling and production of flour from rice and field crops, forestry from forestation, fishery, exclusively aquatic animal cultivation, and more.
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