Even with the political issues Thailand has, the country still has a favorable business climate favorable for new investments and expansions for existing business alike.
Nonetheless, for prospective investors, they need to know the basics of starting a business venture in the Kingdom.
Foreign investors or companies identified as foreign business entities are not allowed to invest on all types of activities. These foreign companies’ involvement in the Thai market is restricted to certain activities only which the Foreign Business Act grouped into three different lists.
List 1 includes activities which are not permitted to foreign-owned companies while those activities on List 2 may be allowed to foreign business provided that they adhere to certain conditions. On the other hand, activities on List 3 are not yet allowed to foreign companies.
And to clarify, if a company is 49% or less owned by foreign shareholders then it is not identified as a foreign company. However, if foreign ownership comprises 50% and above then it is a foreign company and because of this, it has to obtain a Foreign Business License in order to start operating in Thailand.
However, foreign business may also choose to course through other venues to start a business activity in the Kingdom.
For American companies, they may be able to set-up operations in the Kingdom through the Thailand – United States Treaty of Amity. However, American-owned companies cannot start business in Thailand by invoking the treaty as they still have to comply with its strict provisions.
Foreign companies may also choose to be promoted by the Thai Board of Investment in order for them to operate on certain business activities in Thailand even if they are foreign-owned.