Introduction :
If you’re an investor considering starting a business in Thailand, one of your main concerns might be whether you can fully own your business in Thailand. While most business activities require you to have a Thai partner holding over 50% of the shares, there are various options that allow 100% foreign business ownership in Thailand.
In this blog post, we will discuss the options available for foreign entrepreneurs aiming to establish their businesses in Thailand with full ownership rights.
Points clés
- Foreign owned companies can operate in Thailand through several options, including obtaining a Foreign Business License Thailand (FBL), BOI promotion in Thailand, promotion from the Industrial Estate Authority of Thailand (IEAT), or the Treaty of Amity Thailand for US-majority-owned companies.
- Export and Manufacturing companies in Thailand can be 100% foreign-owned, with BOI promotions offering additional benefits like tax exemptions, full foreign ownership, and potential land ownership.
- The Eastern Economic Corridor (EEC) provides investment opportunities for foreign entrepreneurs in next-generation sectors such as automotive, electronics, agriculture, biotechnology, and digital technologies, with attractive incentives like corporate tax exemptions and 100% foreign ownership in Thailand.
- The Industrial Estate Authority of Thailand (IEAT) offers 100% business ownership, import-export flexibility through exemptions on certain taxes and duties.
- US-majority-owned companies can apply for Treaty of Amity protection, allowing 100% foreign ownership in Thailand, though with restrictions on certain reserved business activities like communications, transportation, and banking.
The Foreign Business Act in Thailand (FBA)
The FBA restricts foreigners or foreign owned companies from undertaking over 50 categories of business activities in Thailand. Section 4 of the FBA considers a ‘foreigner’ or ‘foreign owned company as being:
1) A natural person who is not of Thai nationality;
2) A juristic person not registered in Thailand;
3) A juristic person registered in Thailand, being of the following descriptions:
- Being a juristic person at least one-half of capital shares of which are held by persons under (1) and (2) or a juristic person in which investment has been placed by the persons under (1) or (2) in the amount at least equivalent to one half of the total capital thereof; and
- Being a limited partnership or a registered ordinary partnership, the managing partner or the manager, of which is the person under (1).
4) A juristic person registered in Thailand with at least one-half of the capital shares of which are held by persons under (1), (2) or (3) or a juristic person in which investment has been placed by the persons under (1), (2) or (3) in the amount at least equivalent to one half of the total capital thereof.
How does the Foreign Business Act (FBA) Affect Foreign Investors in Thailand?
The FBA restricts foreigners from undertaking about 50 types of business and are grouped into three lists.
List 1
List one includes newspaper businesses, animal farming, land trading and other activities. Foreigners are prohibited from operating businesses in list one for “special reasons” and there is no approval available for a foreigner or foreign entity to obtain.
List 2
List two has three groups and includes: businesses related to national security and domestic land, waterway, or air transportation (including the domestic airline business). Foreign owned businesses can operate in list two activities if approval has been given by the Minister of Commerce and the Cabinet. However, it is very difficult to obtain such approval.
List 3
List three Foreigners and foreign entities are prohibited from engaging in list three activities on the grounds that “Thai nationals are not ready to compete” with foreigners. It is possible for foreigners and foreign entities to receive approval from the Director-General of the Commercial Registration of the Department of Business Development and the Foreign Business Committee for these activities.
List three consists of “other categories of service business except those prescribed by ministerial regulations”.
What is a Foreign Business License (FBL) and How Can it Help Foreign Investors?
Foreign entrepreneurs and companies whose business activities are restricted by the Foreign Business Act can consider applying for a Foreign Business License in Thailand (FBL). A Foreign Business Licence will allow a foreign owned company to undertake restricted business activities under the Foreign Business Act.
While the FBL may seem like the perfect choice, applicants should be aware that the application procedure can be time-consuming, and there is no guarantee to obtain it
However, if the proposed business has added value, doesn’t directly compete with Thai enterprises, and can demonstrate the transfer of technology, the likelihood of obtaining the license increases significantly.
Are there any Business Activities that Allow 100% Foreign Ownership Without Special Permissions in Thailand?
The following business activities are not restricted under the Foreign Business Act in Thailand and can be undertaken by a 100% foreign owned business.
Export Companies
Thailand actively encourages exports, and companies who exclusively export products outside Thailand can be foreign owned. In order to maintain this status, export companies must ensure their operations and revenue are only international, and they can’t sell directly within the Thai domestic market.
Manufacturing Companies
Manufacturing companies in Thailand can be 100% foreign-owned as manufacturing is not on Thailand’s “restricted” list for foreign ownership under the Foreign Business Act (FBA). This allows foreign investors to own and operate manufacturing businesses without needing a Thai partner.
Another advantage for manufacturing companies is their eligibility for a BOI promotion. BOI promotions offer many advantages including different types of tax exemptions including Corporate Income Tax exemptions and Tax exemptions on the import of machinery. BOI promotions can also allow full foreign ownership and the ability to own land which can be used for their factory etc.
What are the restrictions on foreign ownership in Thailand’s manufacturing sector?
If the manufacturing business involves activities related to restricted sectors (e.g., agriculture, mining, certain types of food processing), it may still be subject to FBA limitations.
What Benefits Does a BOI Promotion Offer for Foreign Business Ownership in Thailand?
When looking to start a company in Thailand, applying for a BOI Promotion should always be the first option considered. BOI promoted companies have access to great benefits such as:
- 100% foreign ownership in Thailand,
- possibility for land ownership
- tax exemptions and
- relaxed rules for work permits and visas.
However, there is a common misconception that the BOI only promotes high level and technologically advanced projects, but in actual fact there are many activities that are eligible for a promotion from the BOI.
The BOI in Thailand offers promotions across a wide variety of different business activities including digital and software activities, manufacturing, real estate, and business process outsourcing (BPO), including back-office support services. The BOI also offers a promotion which covers various service-oriented businesses, called the TISO (Thailand Investment Support Office).
This wide scope of eligible activities means that a BOI promotion in Thailand is likely to have a promotional package that could cover your business activities.
Lire aussi : Mesures d'incitation du BOI en faveur des énergies renouvelables - Voici ce qu'il faut savoir pour 2025 !
The Industrial Estate Authority of Thailand
L'Industrial Estate Authority of Thailand (IEAT) est une entité publique placée sous l'égide du ministère de l'Industrie. Son rôle premier consiste à développer et à superviser les zones industrielles ainsi que les ports, en érigeant des bases stratégiques de production et de services dotées de l'infrastructure nécessaire.
The IEAT offers qualifying businesses a range of benefits, including 100% foreign ownership, offering a one-stop service centre (OSS) that provides assistance throughout the whole business process, from land acquisition to establishing a business within one of the free zones.
The IEAT also offers both tax and non-tax benefits to eligible companies.
Industrial estates under the IEAT are divided into two zones: General Industrial Zones (GIZ) and Free Zones:
Les Zones Industrielles Générales (ZIG):
Ils sont dédiés aux activités industrielles et aux entreprises associées. L'IEAT assure des services clés au sein de ces zones, incluant le transport, la formation et les autorisations foncières.
Les Zones Franches :
Les opérateurs peuvent profiter davantage en import-export ainsi que d'exemptions fiscales. Ces zones permettent d'importer des marchandises ou des matières premières et d'exporter des produits sans les restrictions de l' Organisation mondiale du commerce (OMC).
What are the benefits of operating in an Industrial Estate in Thailand?
L'Industrial Estate Authority of Thailand (IEAT) propose une série d'avantages et d'incitations aux investisseurs étrangers cherchant à établir ou développer leurs activités en Thaïlande. Voici quelques-uns des principaux avantages :
The ability for foreign investors to have 100% ownership of their businesses and the land within the industrial zones. This is particularly important as foreign ownership of land is generally restricted in Thailand, except in specific cases such as obtaining a BOI (Board of Investment) promotion.
Companies operating within the industrial zones managed by the IEAT enjoy import-export flexibility. They can import goods, raw materials, and components without restrictions on quantity or value. Additionally, products manufactured within the industrial zones can be exported without facing export conditions imposed by the WTO. Products made for domestic use and taken out of the Free Zones are eligible for tax and duty relief. Similarly, raw material components produced domestically and used within the Free Zones also benefit from tax and duty exemptions.
L'IEAT encourage activement le recrutement de travailleurs qualifiés étrangers dans ses zones industrielles, offrant ainsi aux entreprises la possibilité d'engager des experts dotés de connaissances pointues et d'une expertise spécialisée. Cette approche permet aux entreprises de renforcer leur équipe avec des professionnels capables de stimuler leur croissance et leur développement.
The IEAT will approve the hiring of the following positions:
- directeurs,
- présidents,
- personnel financier et administratif,
- assistants exécutifs,
- assistants d'usine,
- marketing,
- l'exportation et
- professionnels de la vente.
Read more:
Explorez les avantages de l'Industrial Estate Authority of Thailand
The Eastern Economic Corridor (EEC) Thailand
The Eastern Economic Corridor (EEC) in Thailand is made up of three eastern provinces, Chachoengsao, Chonburi, and Rayong and is quickly emerging as an attractive alternative to Bangkok for companies looking to establish their Asian headquarters.
The Eastern Economic Corridor (EEC) is part of Thailand’s plan to create a cutting-edge economic zone. The EEC is designed to develop advanced industries, innovation, and sustainable development within Thailand. Designed as a hub for next-generation industries, the EEC focuses on sectors such as advanced manufacturing, aviation, digital technology, and biotechnology. The Thai government has committed substantial resources to develop world-class infrastructure within the EEC, including high-speed rail links, expanded seaports, and a new international airport.
How Can Foreign Investors Operate in Thailand’s Eastern Economic Corridor (EEC) and what are the Targeted Industries and Business Opportunities Within the EEC?
The Eastern Economic Corridor is aligned with the Thailand 4.0 policy of promoting and developing advanced industries. The EEC offers a wide range of business opportunities across various sectors, including:
L'EEC offre un large éventail d'opportunités commerciales dans différents secteurs, notamment :
- L'industrie automobile de la prochaine génération,
- L'électronique intelligente,
- L'agriculture et la biotechnologie avancée,
- Le tourisme médical de haute valeur ajoutée, ainsi que les technologies numériques.
These industries represent the focus of Thailand’s economic plans for the future and offer significant growth potential for investors.
To further incentivize investment, the Board of Investment, offers a range of attractive incentives for qualified projects within the Eastern Economic Corridor. These incentives include:
- La possibilité pour les étrangers de détenir une propriété à 100 % d'une entreprise,
- L'exonération de l'impôt sur les sociétés pendant une période pouvant aller jusqu'à 15 ans,
- L'exonération des droits d'importation,
- Des subventions de contrepartie,
- Un faible taux d'imposition sur le revenu des personnes physiques (17 %).
Read more: LA THAÏLANDE 4.0 ET LE CORRIDOR ÉCONOMIQUE ORIENTAL
What is the Treaty of Amity and Who Can Benefit from it in Thailand?
For companies where one of the shareholders is a US citizen and this shareholder holds the majority of the shares, this company will be considered a US-majority-owned company. For example the company must have,
- American citizens must hold a minimum of 51% of shares
- A minimum of 50% of directors must be American citizen(s)
As a US-majority-owned company, the company can apply for protection under the Treaty of Amity. By obtaining Treaty of Amity protection, the company can operate as a 100% foreign-owned company in Thailand without applying for an FBL or a BOI promotion.
While the Treaty of Amity does permit 100% foreign business ownership in Thailand, there are several restrictions that must be considered. The Treaty of Amity in Thailand prohibits businesses from operating in the following reserved activities:
- Domestic trade in indigenous agricultural products
- Communications
- Transportation
- Fiduciary functions
- Banking involving depository functions
- Land Ownership, Exploitation of land or other natural resources
Nos réflexions
Checking whether a project is eligible for a BOI promotion should always be the first step for foreign investors looking to start a company in Thailand. There is a common misconception among foreign investors that the BOI only supports high-tech projects. In reality, many business activities qualify for promotion from the BOI, ranging from manufacturing, service, digital activities (including software), plus many more. The BOI even covers activities including various service industries through the catch all TISO promotion.
