Foreign Business License (FBL) is a permit granted to foreign companies or investors that would like to operate in businesses that are restricted under Thai law. This is only possible when the majority of the company shares are owned by Thais.
List 2 – Businesses related to national security and culture. List 3 – Businesses that Thai are not yet ready to compete with.
A Foreign Business License (FBL) is a certification that allows you to legally operate a company in Thailand. It is a complex process that can take months to complete. For this reason, it is important to apply for a FBL with the help of a law firm. The best option is to choose a firm with extensive experience and a team of experts.
The FBA is a set of regulations that organizes business activities into three categories. These categories vary in the degree of restrictions on foreign ownership and operation. The most restrictive category is List One, which includes businesses that are reserved for Thai nationals and those that affect national security and public order, culture, traditions, folklore handicrafts and natural resources.
Businesses classified in List Two and List Three are permitted if they are promoted under the Investment Promotion Act or granted permission by the Foreign Business Committee. They must also comply with the provisions of the FBA concerning minimum capital and schedules for capital remittance.
Requirements for FBL
The requirements for a foreign business license in Thailand vary depending on the type of business and the expected privilege. The application will need to provide detailed information on the business such as financial record and supporting documents, previous business record of the company, machinery information, requirement of foreign expert and if applicable work permit & visa arrangement.
List Two: Businesses related to national safety and security or with impacts on arts, culture, traditions, folklore handicrafts or natural resources and environment. The minimum capital required for these types of businesses is set by the Ministerial Regulation.
Some businesses are exempted from the FBL, including those that are promoted under investment promotion or granted permission for the operation of industry or for trade for export or are specified in Lists Three and Four annexed to this Act or by virtue of a treaty such as the Treaty of Amity with the United States. In such cases, a majority of shares must be held by Thais.
Generally, it takes about four months to submit an application for a Foreign Business License. However, the time frame may vary based on the complexity of the application and the number of supporting documents required.
The Thailand Foreign Business Act (FBA) was established in 1999 to limit which types of businesses a foreigner can perform in the country. The Act organizes business activities into three categories. The first category is strictly prohibited for foreigners, the second is reserved for Thai nationals and the third is restricted under certain circumstances.
The process to obtain a foreign business license is complicated and lengthy. Typically, the application is reviewed by the Cabinet or Foreign Business Committee depending on which category the company applies for. The approval process is more likely when the authorities view the company as providing significant benefits to the country. Foreign companies that operate in Thailand under BOI privileges or US Amity Treaty may not need a foreign business license and can apply for a certificate of business operation.
The presiding MOC official in charge of the inspection will normally not allow an application to proceed until he is satisfied that all documentation has been submitted. Moreover, the MOC will not issue a foreign business license until it receives the minimum capital amount specified by ministerial regulations.
The MOC also has strict rules on intellectual property rights (IPR) relating to patents, trademarks, designs, layout-design of integrated circuits, and geographical indications. As a member of the World Trade Organization, Thailand generally adheres to international standards on IPR.
In the case of a rejected FBL, the Ministry of Commerce will notify the applicant within 15 days, in writing, and expressly state the reason for the rejection. The applicants have the right to appeal this decision. A majority of the shares in a limited company must be held by Thai shareholders or legal persons registered in Thailand. In addition, the company must remit 50 percent of its profits to the government for its first year of operations.