In Thailand a company counts as foreign when non-Thai shareholders hold half or more of its shares, and the Foreign Business Act then restricts which activities it may carry on. Foreigners usually keep up to 49 % of a Thai company, while a Foreign Business Licence, a BOI promotion or a treaty right can open wider ownership.
The Foreign Business Act of 1999 does not look at the nationality of the directors or at where the money comes from first. It looks at the shares: a company is treated as foreign if non-Thai persons hold half or more of the capital, or if foreigners hold fewer shares but control the business through the voting rights. A company that is majority-owned by Thai shareholders on paper but financed and directed by foreigners can still draw scrutiny.
Because the test is about shares, the structure of the share register matters. Preference shares with special voting rights, nominee arrangements and loans that give a lender control are the points where authorities look more closely. A structure designed only to disguise foreign control is risky and can attract criminal penalties for both the foreigner and the Thai nominees.
The practical starting point is to write down who will hold what percentage, who will control the board and where the funding comes from, and then to test that picture against the restricted activities.
The Act contains lists of activities in which foreigners cannot engage, or can engage only with permission. The first list covers sensitive activities, such as newspaper publishing, farming, and certain land-related businesses, which are closed to foreigners. The second and third lists cover activities connected with national security, culture, natural resources or in which Thai businesses are not yet competitive, and these need permission.
Many service activities appear on the third list, including a wide range of wholesale, retail and service businesses. The details have exceptions and thresholds, so a business that looks harmless, such as a consultancy or an agency, may or may not need a licence depending on how the Act describes it. Do not rely on a summary found online; ask a lawyer to read the current text.
Software and online services may fall under a different heading from the one you expect. The classification depends on what the company actually does and for whom, and an adviser can tell you whether your model is within the lists.
The first is a Thai majority structure, where Thai shareholders hold at least 51 % and the foreigner holds up to 49 %. This works when the Thai partners are genuine investors with their own capital and a real role in the business. The second is a Foreign Business Licence, applied for with the Department of Business Development, which allows foreign majority ownership in a listed activity if the authorities approve.
The third route is BOI promotion, which can allow full foreign ownership of a promoted project, as explained on the BOI page of this cluster. The fourth is a treaty right, such as the Treaty of Amity with the United States, which gives qualifying US-owned companies broader rights in many services. Other treaties and trade agreements carry their own conditions.
Each route has costs and time. The licence needs a filing and an official decision, BOI needs a project that fits the policy and the treaty route needs a qualifying nationality and company structure. Compare them using a realistic timetable rather than choosing the cheapest on paper.
When foreigners and Thai partners share a company, write the arrangements into a shareholders’ agreement: who appoints the directors, which decisions need unanimous consent, what happens on a deadlock, and how a partner exits. Thai law governs the company, but the agreement can be written in English with a Thai translation, and a Thai court will look at the substance.
Protect against the risk that Thai shareholders hold shares on trust and do not contribute. Ask for evidence of the source of their funds, and make sure every shareholder has actually paid in the shares they are registered to hold. Nominee shareholders without real investment are exactly what the authorities pursue.
Remember the board also matters. A requirement that a given number of directors be Thai nationals can apply in some licensed businesses, so confirm it before appointing the first board.
Prepare a one-page summary of the proposed ownership, the activity description as you would explain it to a customer and the funding plan. Take it to a Thai lawyer, who can tell you whether a licence is needed and which route fits.
The 4b2b products are general business tools. 4softcrm can store your prospects and 4invoices can issue PDF invoices once the company exists, but none of them decides ownership, applies for a licence or contacts the DBD or the BOI. Those steps are done directly with the authorities and your adviser.
The most common trap is registering first and asking questions afterwards. A company formed with a foreign majority in a restricted activity can be dissolved or its owners prosecuted, and the cost of unwinding a structure is far greater than the cost of a lawyer’s opinion at the start. Ask before the memorandum is signed.
A second trap is the description of objects in the memorandum. The Thai-language objects clause is read by the DBD and by any later inspector, and broad wording that covers a restricted activity can bring the company inside the Act even if the business plan was narrow. Choose the objects deliberately and keep them aligned with what you actually do.
A third trap is assuming that a service delivered entirely online to overseas customers is outside the Act. Whether the Act applies depends on where and how the business operates, who the customers are and what the company is registered to do. Treat any activity performed from Thailand as potentially covered until an adviser confirms otherwise.
The last trap is forgetting renewals and conditions. A licence or a promotion carries conditions on activity, capital and reporting, and the authorities can check compliance years later. Keep the conditions in a folder that outlives the people who negotiated them.
Founders assume that any Thai-registered company may carry on any activity, and learn about the restrictions only at the first audit.
Write down the exact activity and compare it with the restricted lists with a Thai lawyer before incorporating. The tools in the ecosystem do not check activities against the Act.
The Thai partners hold 51 % on paper but contribute nothing, which attracts official attention.
Make sure every shareholder pays in the shares they hold and can show the source of funds, and record the arrangements in a shareholders’ agreement your lawyer has reviewed.
The team is unsure which documents to give the bank and the DBD about shareholders.
Keep an up-to-date share register and identity copies in your own files so you can answer both quickly. Nothing is submitted to the authorities by the system.
Only through a specific route. A foreign business licence, BOI promotion or a treaty right such as the Treaty of Amity can permit majority or full foreign ownership in certain activities. An ordinary private limited company with a foreign majority in a restricted activity is not allowed, so decide the route before you form the company.
It is the common structure in which Thai shareholders hold at least 51 % of the shares and foreigners hold up to 49 %, so the company is not treated as foreign under the Foreign Business Act. The Thai shareholders must be real investors who pay for their shares and play a genuine role in the business.
It depends on what the company does and for whom, because the Act classifies activities rather than technologies. Some service and trading activities need permission when foreign-owned and others do not. Show your lawyer a precise description of the business model and ask for a written view before you register.
Nominee arrangements designed to hide foreign control are an offence under the Act and can lead to fines, imprisonment and an order to stop the business. They also expose the Thai nominees. Use a lawful structure, and ensure each shareholder funds and genuinely holds the shares recorded in the register.
A CRM for contacts, leads and deals and PDF invoices. Ownership and licences are handled with the authorities.
