Foreign Ownership of a Thai Company

Submitted by tilaadmin on Fri, 10/14/2022 - 15:09

The commercial and civil code in Thailand doesn’t pose any difference between foreign and local shareholders in the business industry. Therefore, foreigners find it easier to register a company in this country. However, they may first need to understand the foreign business act developed in 1999 by FBA. 

If you are planning to do company registration Thailand as a foreign investor, it is good to first understand the local rules and regulations. One may need to understand benefits, opportunities, and restrictions as well. 

As per the general rule in Thailand, a company in the country is restricted to have 49% foreign ownership with a majority (51%) shareholding from the local resident. Many misinformed investors fail to follow this rule at the initial stage and they follow several troubles at a later stage due to violations. If we ignore this only drawback, the Thai government has set up several favorable rules for promoting foreign business ownership in the country. There is no need to worry about the setup costs, audience engagement options, land, etc. The local agencies and government offices extend full support to help foreign investors lead their profitable ventures on this land. 

How to get 100% ownership in a Thai company?

You will be happy to know that it is even possible to have 100% ownership of a foreign investor in a Thai company but only if you follow specific techniques. Although the process may appear a little time-consuming to beginners, it may help you to enjoy a profitable journey in the long run. 

There are generally three methods for establishing a foreign company with 100% ownership in Thailand:

•    Obtaining essential license to lead operations of a foreign business.
•    Avail recommendations from the board of investments. 
•    Get registered through the Treaty of Amity. 

Lastly, a company whose foreign ownership exceeds 50% is not considered a Thai company; rather, it is recognized as a foreign company. Moreover, foreign investors may need to follow different rules and regulations in comparison to the Thai company. 

Observations state that FBA restricts foreign investors from entering several business categories; however, many useful options are still present in the list. In order to start with the activity, it is first important to obtain a license to do business in Thailand from FBA and then pick an adequate business category to lead operations. On the other side, some of you may also prefer considering BOI company promotion to operate in the local market. Some of the most common areas that you can touch with the future business ideas are:
•    Agricultural products and management. 
•    Ceramics, minerals, and basic metals. 
•    Metal products, transport equipment, and machinery. 
•    Electrical and electronic appliances. 
•    Plastic, paper, and chemicals. 
•    Public utilities and services.

Companies that are interested to set up a new business terminal in Thailand may avail great returns with the friendly and supportive policies over there. It may offer several impressive outcomes to investors so that they can grab lucrative opportunities in the market. 

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