Foreign Business License – Principle Approval
Generally, a Thai majority owned Company (“Thai Company”) can operate any business activities in Thailand. Therefore, if a Thai Company wishes to change its shareholding structure to be a foreign majority owned Company (“Foreign Company”) by either transferring shares or increasing the Company’s registered capital, the restructured company is at risk that it might not be able to operate its current business for the following reasons:
Keywords: Mazars, Thailand, Legal, FBA, MOC, FBL
09 September 2013
- If the business is restricted under List 1 of the Foreign Business Act B.E. 2542 (“FBA”), the Foreign Company is forbidden from operating that business.
- If the business is restricted under List 2 or 3 of the FBA, the Foreign Company cannot operate that business unless it obtains a Foreign Business License issued by the Ministry of Commerce (“MOC”). Further, the Foreign Company cannot operate the business before obtaining the Foreign Business License (“FBL”).
The Ministry of Commerce allows a Thai Company intending to be a Foreign Company, currently operating a restricted business under List 2 or 3 of the FBA to submit a Principle Approval application requesting for the initial consideration / approval. If the result is negative, the company cannot be transformed. On the other hand, if it is positive, the company can transform to be a Foreign Company and apply for an FBL without the risk of not getting a license and breaking the laws during the FBL application process.
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