The proposed amendments to the Foreign Business Act B.E. 2542 (1999) would remove nine business activities from licensing requirements, reducing regulatory duplication while maintaining sector-specific supervision.

Thailand’s Cabinet has approved a set of amendments to the Foreign Business Act B.E. 2542 (1999) (FBA), removing nine business categories from the list of activities for which foreign operators must obtain a Foreign Business License (FBL) from the Ministry of Commerce. This marks one of the most substantive updates to Thailand’s foreign investment framework in years.

The FBA has long been the primary statute governing the participation of foreign nationals and foreign-majority-owned companies in commercial activities in Thailand. The Act divides restricted businesses into three lists. List Three covers sectors where Thai nationals are considered not yet ready to compete with foreign operators. Companies wishing to operate in a List Three business must obtain prior approval from the Director-General of the Department of Business Development (DBD), with the endorsement of the Foreign Business Committee.

The amendment now approved by Cabinet addresses specific business activities currently captured under List Three and under the Act’s broader licensing annex, proposing to release them from the requirement to obtain Commerce Ministry approval altogether.

What Has Been Approved?

The Cabinet has approved in principle the removal of nine business activities from the annex of the Foreign Business Act B.E. 2542 (1999), allowing foreign investors to operate in those businesses without having to seek permission from the Commerce Ministry under the Act. The nine businesses are grouped into three categories:

Group 1: Businesses Already Governed by Sector-Specific Laws

The first group covers businesses already supervised by dedicated laws and agencies. They include telecommunications services under Type 1 telecommunications business licenses, treasury center businesses under exchange control laws, and various forms of secured lending businesses governed by securities and exchange laws and derivatives laws. Also included are services as an agent, trader, consultant or fund manager for derivatives contracts where the underlying goods or reference variables are not covered by the Derivatives Act B.E. 2546 (2003), as well as forward trading of agricultural products on a futures exchange where delivery or receipt takes place at warehouses designated by the futures exchange.

Group 2: Services Provided Only to Affiliated Companies

The second group covers services provided only within the same corporate group. These include administrative management, human resources and information technology services provided to affiliated companies, as well as domestic debt guarantee services for companies within the same group. The DBD has noted that these activities are internal services used to manage liquidity and operations within a corporate group, and therefore do not compete with Thai businesses. If this amendment gets accepted, this could, in principle, make the Trade and Invest Support Office under the Board of Investment Promotion obsolete, which on the other hand, would make it easier for companies to operate in such a sector.

Group 3: Other Specific Activities

The third group includes the business of leasing part of a space for the installation of electronic devices used in financial services, vending machines, or automated service machines to serve and facilitate company employees. It also includes petroleum drilling services, which are provided specifically to concessionaires.

Government Insists Existing Oversight Remains in Place

The amendments have generated public debate over whether they amount to an uncontrolled opening of the Thai market. The government has firmly rejected that characterization. The draft law was not intended to open the door for foreigners to run businesses without supervision. Instead, it updates certain business categories, most of which involve advanced technology or sectors already governed by specific laws and strictly supervised by state agencies. The goal is to reduce duplication in approval procedures, make business operations more convenient, and bring regulations in line with the modern economic context.

Foreign investors wishing to set up companies in Thailand must still register with the Department of Business Development under the Commerce Ministry, and must also continue to seek approval from the relevant sector regulators. Telecommunications businesses remain under the supervision of the National Broadcasting and Telecommunications Commission (NBTC), treasury center businesses remain subject to the Bank of Thailand’s rules, securities and derivatives businesses remain under the supervision of the Securities and Exchange Commission (SEC), and petroleum drilling businesses remain strictly governed by energy laws and supervised by energy agencies.

The Commerce Ministry stated that foreign investors would bring not only capital, but also advanced technology and specialist expertise into Thailand. This could support technology and knowledge transfer to Thai entrepreneurs and employees, helping upgrade specialist skills in the Thai labor force. The change is intended to help Thai businesses develop further and support Thailand’s ambition to become a regional and global hub for services and investment in the future.

Continued Crackdown on Nominee Arrangements

The relaxation of licensing requirements does not signal any softening of enforcement against circumvention of the FBA. It has to be noted that Thailand remains committed to protecting sectors where Thai businesses are not yet ready to compete internationally, while continuing strict enforcement against illegal nominee shareholding arrangements involving Thai nationals. The Commerce Ministry confirmed that it will continue to step up efforts to prevent and suppress businesses that intentionally avoid the law by using Thai nominees on behalf of foreign nationals.

Legal and Practical Implications

For foreign investors, the amendments reduce procedural friction and costs in the affected sectors by eliminating one layer of approval without removing the regulatory requirements that apply under each sector’s own legislation. Companies operating in telecommunications, securities, treasury management, or petroleum should note that approvals from the NBTC, SEC, Bank of Thailand, and Ministry of Energy, respectively, remain mandatory.

For intra-group service providers, the carve-out for administrative, HR, IT and internal debt guarantee services is relevant. Foreign multinationals with shared services centers or treasury operations in Thailand will benefit from a cleaner regulatory regime, provided services are demonstrably rendered only to affiliated entities.

For the FBA framework more broadly, the amendments represent a revision of specific annex categories rather than a whole reform of the List structure. List Three in its entirety, which covers 21 categories including legal services, accounting, advertising, hospitality, and retail, remains in force and unchanged.

The draft ministerial regulation and draft royal decree must still complete the formal legislative process, including review by the Council of State and publication in the Royal Gazette, before taking effect. Foreign businesses currently operating under an FBL in the affected categories should monitor the legislative timeline and assess whether their existing licenses will need to be maintained, varied, or surrendered once the new rules come into force.

If you have any questions regarding the Thailand FBA. Please feel free to contact us at info@franklegaltax.com

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