Foreign business ownership in Thailand explained

Key Takeaways

Foreign ownership in Thailand defaults to 49% under the Foreign Business Act (FBA), but legal pathways to full ownership exist
Board of Investment (BOI) promotion is the most accessible route to 100% foreign ownership, with added tax and land privileges
Minimum paid-up capital requirements differ depending on whether your business activity is restricted or non-restricted under the FBA
Every registered company in Thailand must maintain proper accounts prepared by a qualified bookkeeper and have its financial statements audited by a Thai CPA; many foreign investors choose to outsource these functions to manage local compliance efficiently
Using nominee shareholders to bypass the 49% foreign ownership limit is illegal and enforcement is tightening
Partnering with a qualified local firm ensures your accounting, reporting and compliance obligations stay current as Thai standards evolve

Navigating foreign business ownership in Thailand

In our experience, many foreign investors initially assume that a Thai majority shareholder is required to establish a business in Thailand. While this may be appropriate in some circumstances, there are legitimate pathways to majority or 100% foreign ownership that are frequently overlooked during the planning phase.

Thailand has significantly increased enforcement efforts against illegal nominee shareholder structures, where Thai nationals hold shares on behalf of foreign investors to circumvent foreign ownership restrictions under the Foreign Business Act. Recent measures have included enhanced scrutiny of company registrations, verification of shareholders' source of funds, investigations into high-risk sectors such as real estate, tourism, and trading, and closer cooperation between regulatory, law enforcement, and anti-money laundering agencies.

Under Thailand's Foreign Business Act, foreign ownership is generally limited to 49% in businesses that fall within restricted categories, with at least 51% of shares required to be held by Thai nationals. However, foreign investors may obtain majority or even 100% ownership through approved structures such as a Foreign Business Licence (FBL) issued by the Department of Business Development or promotion granted by the Board of Investment (BOI) or Industrial Estate Authority of Thailand (IEAT). These routes allow qualifying businesses to operate with greater foreign ownership while remaining fully compliant with Thai law.

For many foreign investors, obtaining promotion from Thailand's BOI is the most attractive route to achieving majority or 100% foreign ownership while accessing a range of tax and non-tax incentives. BOI promotion is available to businesses operating in targeted sectors that support Thailand's economic development goals, including technology, digital services, advanced manufacturing, renewable energy, logistics, and regional headquarters activities.

The tax benefits available under a BOI promotion can be substantial. Depending on the nature of the project, businesses may receive corporate income tax exemptions for up to 13 years, exemptions or reductions on import duties for machinery and raw materials, and enhanced deductions for activities such as research and development, technology upgrades, training, and infrastructure investment.

One of the most significant non-tax incentives is the ability for foreign-owned BOI-promoted companies to own land for use in their promoted business activities. Outside of limited exceptions, foreign companies are generally prohibited from owning land in Thailand.

BOI promotion also makes it easier to attract foreign talent. Promoted companies benefit from streamlined visa and work permit procedures, reduced administrative requirements, and the ability to employ foreign experts essential to the promoted project. In many cases especially the promoted activities involve innovation and technology, the usual restrictions relating to paid-up capital, Thai-to-foreign employee ratios, and work permit quotas are relaxed, making Thailand a more viable destination for regional management teams and specialised technical personnel.

While BOI promotion is often the preferred route for foreign investors, not all businesses qualify for BOI incentives. In these cases, foreign investors may apply for a Foreign Business Licence (FBL) under the Foreign Business Act (FBA) to obtain permission to conduct restricted business activities with majority or 100% foreign ownership.

An FBL may be needed when a foreign-owned company provides certain services to customers outside its own corporate group. Services provided only to affiliated companies may qualify for an exemption under the relevant regulations. Restricted activities can include general services, wholesale, retail, brokerage and agency work. Approval is discretionary and applications are reviewed by the Department of Business Development (DBD), which considers factors such as the benefits to Thailand, technology transfer, employment creation, and whether sufficient expertise exists locally. An FBL allows the company to carry out the approved activity, but it generally does not provide the tax, land ownership or immigration benefits available through BOI promotion

For American investors, one of the most attractive alternatives to obtain a Foreign Business Certificate (FBC) under the protection of the US-Thai Treaty of Amity. The treaty allows qualifying US citizens and US-owned companies to receive treatment similar to that of a Thai company, enabling majority or even 100% ownership in many business sectors that would otherwise be restricted under the Foreign Business Act. As a result, American investors can often establish and operate businesses in Thailand without the need for Thai majority shareholders or a FBL, although they must still obtain a Foreign Business Certificate from the Department of Business Development. To qualify, the company must generally be majority owned and controlled by US citizens or qualifying US entities.

Understanding minimum capital requirements

Minimum capital requirements are often overlooked during the business planning stage. Many investors focus on incorporation costs and operational budgets, only to discover that Thailand imposes specific capital requirements depending on the ownership structure and business activity being undertaken.

For foreign-owned companies conducting non-restricted activities, such as certain manufacturing or export businesses, the minimum capital requirement is generally THB 2 million and must be fully paid before commencing operations. For companies operating under a FBL or similar permission, the minimum capital requirement generally increases to THB 3 million, or 25% of the estimated average operating expenses for three years, whichever is higher. Foreign-owned companies carrying out wholesale or retail activities may be exempt from obtaining an FBL if they have paid-up capital of at least THB 100 million for each activity.

Foreign capital must be remitted into Thailand through authorised banking channels, with supporting documentation filed with the Department of Business Development within prescribed timeframes. As a result, foreign investors should consider capital planning early in the incorporation process to avoid delays in obtaining licences, commencing operations, or hiring employees.

The Crucial Role of Outsourcing Services for Accounting & Tax

One issue frequently encountered by newly established foreign-owned businesses is the difference between overseas management expectations and Thai compliance requirements. Requirements surrounding invoice formats, domestic withholding taxes, statutory filings, and document retention can create unexpected administrative burdens if they are not addressed early.

Businesses are also subject to a range of ongoing compliance obligations, including VAT filings, withholding tax returns, corporate income tax filings, payroll reporting, and social security contributions. Foreign investors are often surprised to discover that Thailand's accounting and tax environment operates quite differently from many Western jurisdictions. For example, invoices, tax documents, and supporting records are frequently prepared in Thai language, while the Revenue Department continues to place significant emphasis on maintaining original source documentation for tax purposes. Thailand also operates a domestic withholding tax regime under which tax must be withheld on many types of service payments, creating additional compliance and cash flow considerations for businesses.

Thailand's accounting framework consists of two primary reporting standards. Larger companies and public interest entities typically apply Thai Financial Reporting Standards (TFRS), which are largely aligned with International Financial Reporting Standards (IFRS). Many private companies, however, are permitted to apply Thai Financial Reporting Standards for Non-Publicly Accountable Entities (NPAEs), a simplified reporting framework with reduced disclosure and accounting requirements. Selecting the appropriate framework can have a significant impact on compliance complexity, reporting obligations, and future growth plans.

The regulatory landscape continues to evolve as Thailand further aligns with international accounting standards and emerging sustainability reporting requirements. Combined with the requirement for every company to maintain accounts prepared and signed by a licensed Thai accountant and audited by a licensed Thai auditor, these obligations can create a significant administrative burden for foreign investors. For this reason, many businesses choose to outsource their accounting, payroll, tax compliance, and reporting functions to experienced local professionals, allowing management to focus on growing the business while remaining compliant with Thai regulations.

Forvis Mazars, a partner-led collaborator

Establishing a business in Thailand requires practical coordination between legal structure, tax registration, statutory accounting, payroll and group reporting. Foreign investors often need advice that reflects both Thai regulatory requirements and the expectations of overseas shareholders, regional headquarters and finance teams.

Forvis Mazars provides direct access to experienced senior professionals who remain involved in both service delivery and technical discussions. Many of the firm’s partners, directors and managers have been with Forvis Mazars for more than 15 years, giving clients continuity and practical experience gained from supporting foreign investors across a wide range of industries.

The Accounting & Business Services team supports companies from market entry and entity establishment through to ongoing statutory compliance, management reporting and group reporting. The team works across a range of accounting and ERP platforms, including Xero, SAP, Oracle NetSuite, Microsoft Dynamics and other enterprise finance systems, allowing services to be aligned with both local operations and global reporting requirements.

The team assists multinational businesses with Thai accounting, tax, payroll and reporting requirements while helping head offices obtain the information they need for consolidation and management reporting. This includes supporting businesses that report under TFRS, NPAEs, IFRS or group-specific reporting standards.

Forvis Mazars also has experience supporting BOI-promoted companies, where accounting, tax and reporting obligations often need to be managed alongside investment promotion conditions. The objective is to help businesses establish a compliant operating base in Thailand while giving management clear visibility over ongoing statutory and reporting obligations.

Setting up a business in Thailand is more complex than it may first appear. Addressing ownership, licensing, capital, accounting and tax requirements early can help foreign investors avoid delays and build a more reliable foundation for growth. Contact Forvis Mazars to discuss your ownership structure, capital requirements and ongoing accounting and compliance obligations with one of our specialists.

Conclusion

Summary: Establishing a presence in Thailand offers vast commercial rewards, but success hinges on rigorous legal structural setup, satisfying minimum capital mandates, and flawless accounting compliance.
Final Thought: Trying to manage specialized Thai tax and corporate reporting in-house can cause severe administrative blockages.

Setting up a business in Thailand is more complex than it looks. Contact us to discuss your structure, capital and compliance requirements with a specialist.

FAQs for Foreign Business Ownership in Thailand

What are the minimum capital requirements for foreign-owned companies in Thailand?

Foreign-owned companies generally require THB 2 million for non-restricted activities. Businesses operating under a Foreign Business Licence generally require THB 3 million, or 25% of estimated average operating expenses for three years, whichever is higher.

Can a foreign national own 100% of a company in Thailand?

Yes. Majority or 100% foreign ownership may be permitted through BOI promotion, a Foreign Business Licence or, for qualifying US investors, the US-Thai Treaty of Amity.

What is the Foreign Business Act and which activities does it restrict?

The Foreign Business Act restricts foreign ownership in specified sectors, including many service and professional activities and trading. A Foreign Business Licence or approved exemption may be required. Manufacturing and export activities are generally not restricted under the FBA for foreign majority-owned companies.

What is BOI promotion and how does it benefit foreign businesses in Thailand?

BOI promotion is granted to qualifying investments in activities targeted by Thailand’s Board of Investment. Applicants must satisfy the criteria for the relevant activity, such as, by investing in new assets for the promoted project and contributing technical knowledge or technology transfer. The BOI promotes more than 100 activities, with tax incentives varying by activity. All promoted companies may also receive non-tax incentives, including permission for foreign ownership of restricted businesses under the FBA, facilitated visas and work permits for expatriates working on the project, and ownership of land used for promoted activities in permitted areas.

What happens if a company uses Thai nominee shareholders to meet ownership requirements?

Using Thai nominee shareholders to circumvent foreign ownership restrictions is illegal under the FBA. Authorities may investigate the company’s shareholders and directors, governance arrangements, and Thai shareholders’ sources of funds, with enforcement involving agencies such as the Ministry of Commerce, Land Department, Anti-Money Laundering Office, and Immigration Bureau. Both the foreign investor and those assisting the arrangement may face imprisonment of up to three years, a fine of THB 100,000 to THB 1 million, or both. The court may also order the nominee arrangement or business operations to cease, with additional daily fines of THB 10,000 to THB 50,000 for non-compliance.