Can a foreigner open a company in Thailand? Yes. Foreigners can establish and operate businesses in Thailand, but the process is not as simple as registering a company.
The most important question is:
“Can a foreigner legally own and operate the proposed business in Thailand?”
Depending on the type of business, a foreign investor may need to comply with the Foreign Business Act B.E. 2542 (1999), obtain a Foreign Business License or Certificate, meet minimum capital requirements, and obtain other sector-specific licenses.
This article explains the key issues that foreigners should understand before setting up a company in Thailand.
Can a Foreigner Own a Company in Thailand?
Yes. A foreigner can own shares in a Thai company, and in some circumstances a foreigner can own 100% of a Thai company.
However, foreign ownership is not automatically permitted for every type of business.
Under the Foreign Business Act, a company registered in Thailand can be regarded as a “foreigner” if at least half of its capital is held by foreigners or if it otherwise falls within the statutory definition. Certain businesses are restricted or subject to permission when operated by foreigners.
Therefore, the first step should be to determine whether the proposed business is subject to the Foreign Business Act.
Is 51% Thai Ownership Always Required?
No.
A common misconception is that every company established by a foreigner in Thailand must have a Thai shareholder holding 51% of the shares.
This is not necessarily correct.
The required ownership structure depends on the nature of the business and whether the company falls within a restricted business under the Foreign Business Act.
Some businesses may be structured with substantial or even 100% foreign ownership, subject to applicable laws, licenses, and investment promotion rules.
For businesses falling within restricted categories, a Foreign Business License or another legal exemption may be required.
What Businesses Are Restricted for Foreigners?
The Foreign Business Act contains lists of businesses that are restricted or subject to specific conditions for foreign investors.
Examples can include certain activities involving:
- Retail
- Wholesale
- Services
- Certain professional or commercial activities
- Certain construction-related businesses
- Certain brokerage and agency activities
- Certain businesses involving Thai natural resources or other protected sectors
The exact classification depends on what the company actually does.
This is why a business should be legally classified before the company structure is finalized.
For example, a company described simply as a “consulting company” may actually perform several different activities, and each activity should be reviewed to determine whether it falls within a restricted category.
Can a Foreigner Own 100% of a Thai Company?
In some circumstances, yes.
A foreigner may be able to establish a company with 100% foreign ownership where:
- The proposed business is not restricted under the Foreign Business Act;
- The company obtains the necessary permission;
- The business qualifies for investment promotion;
- An applicable treaty or international agreement provides an exemption; or
- Another specific legal exemption applies.
For certain restricted businesses, a Foreign Business License may permit foreign ownership and operation subject to the conditions imposed by the authorities.
The Board of Investment explains that businesses falling under the Foreign Business Act may be subject to minimum capital requirements and other conditions before commencing operations.
What Is a Foreign Business License?
A Foreign Business License (FBL) is permission allowing a foreigner to operate certain businesses that are restricted under the Foreign Business Act.
A foreign investor should not assume that registering a company with the Department of Business Development automatically gives the company permission to conduct every business listed in its corporate objectives.
If the proposed activity is a restricted business, the required permission must generally be obtained before commencing the relevant business operation.
The Foreign Business Act provides the legal framework for determining when a foreigner requires permission to operate a restricted business.
How Much Capital Does a Foreigner Need?
The required capital depends on the circumstances.
For a general Thai private limited company, there is no single universal minimum registered capital that applies to every business. However, additional minimum capital requirements can apply where the company is considered a foreign business under the Foreign Business Act.
The Board of Investment states that, where the Foreign Business Act applies, the minimum capital for businesses requiring permission is generally not less than THB 3 million, while other circumstances can involve a minimum of THB 2 million, subject to the applicable rules.
The capital requirement should therefore be determined based on the actual business model rather than simply choosing a standard registered-capital figure.
Can a Foreigner Use Thai Nominee Shareholders?
Foreign investors should be extremely careful about nominee arrangements.
Some foreigners attempt to avoid foreign ownership restrictions by using Thai persons to hold shares on their behalf even though the foreigner is the real owner and provides the investment.
This can create serious legal risks.
Thai authorities have procedures concerning the source of funds of Thai shareholders in certain company registration situations. The Board of Investment notes that supporting evidence regarding the source of Thai shareholders' funds may be required.
A company structure should therefore reflect the real ownership and investment arrangement and should comply with Thai law.
Using a nominee structure simply to circumvent foreign ownership restrictions can expose the parties involved to significant legal consequences.
Can a Foreigner Be a Director of a Thai Company?
Yes.
A foreigner can generally be appointed as a director of a Thai company, subject to the company's structure, applicable laws, and any specific licensing requirements.
However, being appointed as a director does not automatically give a foreigner the right to work in Thailand.
If the foreign director performs work in Thailand, immigration and work-permit requirements must also be considered.
Does Opening a Company Give a Foreigner the Right to Work in Thailand?
No.
Company registration and immigration/work authorization are separate legal issues.
A foreigner who owns shares in a Thai company does not automatically have permission to work in Thailand.
If the foreign owner intends to actively work in Thailand, the company and the foreigner may need to comply with requirements concerning:
- Work permits;
- Visa status;
- Employment;
- Capital;
- Thai employees;
- Position and job description; and
- Other applicable immigration requirements.
Therefore, company formation should be planned together with the foreign investor's immigration and work-permit strategy.
What Are the Main Steps to Open a Company in Thailand?
A typical company formation process may include:
- 01Determine the businessClearly identify what the company will actually do, because the business activity determines whether foreign ownership restrictions or special licenses apply.
- 02Choose the ownership structureDetermine foreign and Thai shareholders, ownership percentages, directors, authorized signatories, and registered capital.
- 03Reserve the company nameThe proposed company name must comply with Thai company-registration requirements.
- 04Prepare the incorporation documentsMemorandum of Association, Articles of Association, shareholder and director information, registered office, and other DBD requirements.
- 05Register the companyThe company is registered with the Department of Business Development and becomes a separate legal entity.
- 06Obtain business licensesDepending on the business, additional approvals may be required — for a foreign-owned business, this may include a Foreign Business License or Certificate.
- 07Tax registrationObtain a tax identification number and register for VAT where the statutory threshold or other conditions are met.
- 08Open a corporate bank accountAfter incorporation and completion of the bank's requirements, the company can establish its corporate banking arrangements.
- 09Arrange immigration and work permitsIf the foreign owner or employees will work in Thailand, immigration and work-permit requirements should be addressed before commencing work.
Thailand's Department of Business Development provides electronic company-registration services through its DBD Biz Regist system.
Can a Foreigner Open a Restaurant, Hotel, or Online Business?
Potentially, yes—but the legal structure can be very different depending on the business.
For example, a foreigner planning to open:
- A restaurant;
- Hotel;
- Online business;
- Consulting company;
- Real estate business;
- Construction company;
- Import/export company;
- Retail business; or
- Digital services company
should not assume that the same ownership structure applies to all of them.
The business activity must first be reviewed under the Foreign Business Act and other applicable legislation.
What About BOI Promotion?
Some foreign investors may qualify for investment promotion from the Thailand Board of Investment (BOI).
BOI promotion can provide important benefits depending on the approved project, potentially including permission for foreign ownership and other investment privileges.
However, BOI promotion is not available automatically to every company. The project must satisfy the relevant investment-promotion criteria.
Therefore, investors should consider whether their proposed business may qualify for BOI promotion before choosing the final company structure.
Common Mistakes Foreigners Make When Opening a Company in Thailand
- 01Choosing the structure before checking the businessThe correct approach is to determine the business activity first.
- 02Assuming 51% Thai ownership solves everythingA 51/49 structure does not automatically make every business lawful.
- 03Using nominee shareholdersNominee arrangements can create significant legal risks.
- 04Assuming registration equals permission to operateRegistration with the DBD does not necessarily mean that all required business licenses have been obtained.
- 05Assuming company ownership gives a work permitOwning shares and having the right to work in Thailand are separate issues.
- 06Using a standard registered capital without legal analysisThe appropriate capital should be based on the business, foreign ownership, licensing, employees, and immigration considerations.
Should You Register the Company Yourself or Use a Lawyer?
Foreign investors can prepare company-registration documents themselves, but businesses involving foreign ownership can become complicated quickly.
A lawyer can help determine:
- Whether the business is restricted;
- Whether 100% foreign ownership is possible;
- Whether a Foreign Business License is required;
- Whether BOI promotion may be available;
- What capital requirements apply;
- How the shareholder structure should be organized;
- Whether work permits can be obtained;
- What licenses are required; and
- How to structure the business lawfully from the beginning.
This can be particularly important because correcting an inappropriate company structure after incorporation may be considerably more difficult than establishing the correct structure from the start.
Final Thoughts
Can a foreigner open a company in Thailand?
Yes. Thailand allows foreigners to establish and invest in businesses, but the legal requirements depend heavily on the type of business, ownership structure, capital, licensing requirements, and applicable exemptions.
The most important thing is not simply to ask:
“Can I register a company in Thailand?”
Instead, a foreign investor should ask:
“Can I legally own and operate this particular business in Thailand?”
That distinction can make a significant difference.
If you are planning to start a business in Thailand, it is advisable to obtain legal advice before signing a lease, transferring investment funds, selecting shareholders, or registering the company.
How Nathee Legal Can Help
Nathee Legal Firm assists foreign investors and entrepreneurs with legal matters relating to establishing and operating businesses in Thailand, including:
- Company formation;
- Foreign ownership structures;
- Foreign Business Act issues;
- Foreign Business Licenses;
- BOI-related matters;
- Shareholder and director arrangements;
- Business contracts;
- Work permits and immigration coordination;
- Regulatory compliance; and
- Commercial and corporate legal advice.
Our legal team can assess your proposed business and recommend a structure that is designed to comply with Thai law while protecting your investment.
Planning to start a business in Thailand? Contact Nathee Legal for an initial legal assessment of your proposed business structure.