Incorporation
A Guide to Opening a Coffee Shop in Thailand in 2025
Thailand’s coffee culture has begun to really take off, with some of Thailand’s coffee farms becoming internationally recognised. As a result of this many small, independent coffee shops have started to open across the country, with most of the beans being purchased from coffee farms based in the northern provinces of Chiang Mai and Chiang Rai. For foreign entrepreneurs, this growth in both coffee consumption and production presents an excellent opportunity to establish a successful coffee business in Thailand.
However, starting a coffee shop as a foreigner in Thailand involves dealing with a complicated legal and regulatory landscape, ranging from company registration to obtaining the necessary work permits and licenses.
Key points
- Foreigners cannot 100% own a coffee shop in Thailand. A Thai company with Thai shareholders owning more than 50% of the share capital is required, and nominee shareholders are prohibited.
- Coffee shops must obtain multiple licenses, including a certificate for the food distribution site and food storage facility, a restaurant license (if over 200 sq meters), comply with food sanitation standards, and potentially acquire additional licenses for alcohol and music.
- All coffee beans, drinks, and related products must be registered with Thailand’s Food and Drug Administration (FDA), and imported products require a Free Sale Certificate (FSC) and Import License.
- Most coffee shop leases are 3 years with renewal options, but registering the lease at the Land Office is recommended for better long-term protection, despite the additional fees and administrative process.
What is Thailand’s Coffee Industry Like Today?
The Thai coffee industry is currently experiencing strong growth, with the market growing at an average annual rate of 8.55% from 2021 to 2023. In 2023, the market value reached 34.5 billion baht, which is a 7.34% increase from the previous year.
This growth is highlighted through the increased coffee production in 2023 which had a yield of 16,575 tonnes, with 48.2% being Arabica beans and 51.8% Robusta beans. Thailand’s coffee exports reached $126 million, which is a 15.6% increase from the prior year, with instant coffee being the primary export product.
Can a Foreigner 100% own a Coffee Shop in Thailand?
While selling food and beverages is a restricted activity under the Foreign Business Act (FBA), a foreign investor may open a coffee shop with a Thai partner.
As per the Foreign Business Act, selling food and beverages can be found under List 3 of the Foreign Business Act as an activity in which Thai nationals are not yet ready to compete with foreigners. Therefore, since these activities are a key component of owning and operating a coffee shop, the FBA makes it impossible to have 100% foreign ownership for such a business . For more information about the FBA.
Therefore, with the restrictions of the Foreign Business Act, opening a coffee shop as a foreigner can only be undertaken by a Thai company (a company registered in Thailand with Thai shareholder(s) owning more than 50% of the share capital). The Thai shareholder must not be a nominee as the Foreign Business Act prohibits the use of Thai shareholder nominees.
A nominee shareholder can be described as an individual who:
▪️ Lacks genuine interest in the business.
▪️ Has made no significant investment in the company.
▪️ Lacks the financial means and skills to be a legitimate partner.
▪️ Exists solely to facilitate foreign participation in restricted businesses.
For instance, appointing an unskilled Thai worker with a modest income as a majority shareholder in a company with substantial registered capital while simultaneously denying them voting and dividend rights would be considered as using a nominee shareholder.
Read more:
Company Registration for Small Foreign-Owned Businesses in Thailand
A private limited company that has been properly structured is the most common business type for a coffee shop.
When starting such a coffee shop as a foreign investor, the following are required:
- at least 2 shareholders. As coffee shops are restricted under the Foreign Business Act, foreign ownership is limited to 49%.
- If the foreign investor requires a Work Permit, a minimum of 2 million THB in paid-up capital (which is equivalent to approximately USD 59,000) is required.
- VAT and Social Security Registration will also be required.
Do You Need Business Licenses to Operate a Coffee Shop in Thailand?
Coffee Shops in Thailand are subject to numerous legal requirements, ranging from food hygiene to licences to sell alcohol or play live music if that is desired. Please see the following for a more detailed breakdown of the laws and regulations a coffee shop must comply with.
Before operating a coffee shop, the owner must first obtain the correct licenses from the relevant authorities. Some of the most common business licences include:
Certificate of Notification for the Establishment of a Food Distribution Site and Food Storage Facility
Should a coffee shop plan to serve food such as cakes and pastries i.e. reheating or serving pre-made food that has not been cooked in the coffee shop, a Certificate of Notification for the Establishment of a Food Distribution Site and Food Storage Facility is required as per the Public Health Act B.E. 2535 (1992).
This notification ensures that the coffee shops food distribution and storage facilities comply with safety, hygiene, and public health standards.
Restaurant Licence
If the coffee shop plans to prepare, cook and sell food, the business is required to apply for a restaurant licence from the local government.
Read more:
Everything You Need to Know About Opening a Restaurant in Thailand
Food Sanitation Standards
Food sellers including coffee shops must comply with regulations relating to food sanitation standards. These regulations are handled by the Bureau of Food and Water Sanitation and the Department of Health.
When it comes to food and drink preparation and cooking, cleanliness is a highly important consideration. Coffee shops must ensure that all areas where any food and drink is prepared and cooked are kept clean and organized. For instance:
- ingredients should be prepared on tables or surfaces that are at least 60 centimetres off the ground.
- Once cooked, food needs to be stored in clean containers and placed on shelves or in cabinets that are also at least 60 centimeters above the floor.
- Separate utensils must be used for different types of food/drink to avoid cross-contamination.
- Food handlers should always wear appropriate protective clothing to ensure safety and hygiene.
In addition to this, the Ministry of Public Health introduced a new regulation called the Ministerial Regulation regarding Sanitation of Places for Selling Food (B.E. 2561 or 2018).
Some key sanitation requirements from this regulation include:
- Food operators and handlers must complete a training course specified by the Ministry of Public Health.
- Proper waste management must be in place.
- There should be effective wastewater management systems.
- Measures to prevent pests and animals must be implemented.
- Equipment and procedures to prevent fire hazards from cooking fuel are essential.
Alcohol Licence
If you plan to sell or serve alcohol in the coffee shop an alcohol licence is required. The following licences are examples of the most common licences required for a coffee shop that sells alcohol:
Retail Alcohol Licence
This license allows you to sell alcoholic beverages for consumption on the premises.
Temporary Alcohol Licence
If you are hosting a special event or promotion, a temporary license may be obtained for a limited time.
Read more:
Music Licence
In Thailand, businesses that play music publicly, for example as background music in a coffee shop, are required to obtain a music license to comply with copyright laws.
A music license grants a business the legal right to play copyrighted music in public spaces. This includes music played from:
- Sound systems.
- Live performances.
- Televisions, radios, or streaming services.
- Background music services.
Thailand’s Copyright Act B.E. 2537 (1994) protects the intellectual property of music creators and performers. Playing music publicly without a license will result in copyright infringement by the coffee shop. Therefore, in order to avoid such copyright infringement, the business should acquire a music licence issued by the copyright owners or Collective Management Organizations (CMOs) representing them.
What are the Different Types of Music Licenses
Thailand has different music licences depending on the type of activities undertaken. For example:
- Reproduction License:
- For businesses playing recorded music for ambiance (e.g., in cafes, restaurants, or gyms).
- Covers music from CDs, streaming platforms, or background music services.
- Live Performance License:
- For venues hosting live bands or singers.
- Broadcast Music License:
- For businesses using televisions or radios to play music publicly.
Licensing Authorities in Thailand
- Collective Management Organizations (CMOs):
- CMOs manage music licenses and collect royalties on behalf of rights holders. The main CMOs in Thailand include:
- MCT (Music Copyright Thailand): Covers Thai and international music rights holders.
- PRA (Performing Rights Association): Represents performing artists.
- MPA (Music Publishers Association): Handles music publishers.
- CMOs manage music licenses and collect royalties on behalf of rights holders. The main CMOs in Thailand include:
- Direct Licensing:
- Some international music labels or streaming services may offer direct licensing agreements for commercial use.
Cost of a Music Licence
The cost of a music licence is not a fixed fee and varies based on:
- The size of the business premises.
- The nature of the music use (background, live, or broadcast).
- The type of business (e.g., small cafes may pay less than large hotels).
Each month, the company will provide an updated link to the songs. Currently, there are approximately 9,800,000 songs covered under the standard license.
Can I Sell My Own Coffee Beans or Products in My Coffee Shop?
Some coffee shops in Thailand use and sell their own beans that they have grown themselves, or maybe as a foreign investor you have coffee related businesses and you wish to sell these products in your coffee shop. However, if you plan on importing or selling your coffee beans, drinks, or related products, you will have to register your products first.
In Thailand, Food and Beverage products are regulated by the country’s Food and Drug Administration (FDA). In order to obtain approval for the FDA to sell your own products, the following will need to be provided to register your products:
- Product details (name, ingredients, composition, shelf life)
- Labeling in Thai language
- Manufacturer Details
- Manufacturing facility information
- Free Sale Certificate (FSC) for imported products
- Factory registration (if applicable)
- Laboratory analysis reports
Can I Import Products to Sell in a Coffee Shop?
In order to import your own coffee beans and other food items from abroad to be used in your coffee shop, you first need to obtain a Free Sale Certificate (FSC) and an Import License. The FSC is used to confirm that the imported product meets the necessary quality and safety standards, and is sold legally abroad.
Read more:
Can I Hire Foreign Staff?
One of the most important requirements for opening a coffee shop in Thailand is related to hiring employees. The requirements for hiring foreigners in Thailand largely depend on the type of structure used to incorporate the business.
Assuming the coffee shop will be incorporated using the most common structure, the Thai Limited Company, the following criteria must be met in order to hire foreign employees.
- A ratio of 4 Thai employees per foreign employee hired is required to support a Work Permit.
- There is also a minimum capital requirement of 2 million Baht per foreign employee as well.
Once these requirements have been satisfied, the employee will be able to apply for their business visa and work permit.
It is also important to note that every employee of a coffee shop must pass certain tests in order to prove they are qualified for their position. An inspection of the premises will be completed by the relevant authorities in order to confirm these standards before the restaurant license is issued.
Please note, if as a foreign investor you don’t plan to undertake any work for the coffee shop and just remain a shareholder, a work permit is not required. However, Thailand has a very wide definition of work, and something such as signing company documents on behalf of the company is considered work and a work permit is required.
What Type of Lease Should I Get For My Coffee Shop?
In practice, most coffee shops will be given a 3 year lease with the option to renew for 1 or 2 further terms. The owners of such premises tend to only offer 3 year leases due to Thai law stating that any lease longer than 3 years must be registered at the Land Office. Registering a lease at the Land Office involves the payment of registration fees and a time consuming trip to the Land Office, both of which owners are keen to avoid.
However, having a registered lease has certain advantages which may be beneficial to a business. Firstly, registered leases can be valid for 30 years. Should the owner sell the property in the future, the lease right contained within a registered lease will be transferred to the new owner and will still be enforceable. This offers your business protection for the term of the lease.
Another issue with a non-registered lease, is that after 3 years you may want to renew the lease but the owner doesn’t want to. Such a scenario is dependent on how the option to renew has been drafted. Usually such a right is not guaranteed and is merely an option which can be declined by the owner, therefore you run the risk of losing your business.
Furthermore, back-to-back leases could be viewed by the authorities as trying to circumvent the regulation that states a lease with a term of longer than 3 years must be registered at the land office. Should this issue arise, your business would again be put at an unnecessary risk.
It is highly recommended that you register the lease at the land office in order to protect your rights. To help smooth the process, you can offer to pay for the transfer fees on behalf of the owner, as this is usually the sticking point for the owner’s refusal to do so.
How can Belaws help?
For more information about starting a coffee shop in Thailand, why not talk to one of our experts now?
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Frequently asked questions
Can a foreigner fully own a coffee shop in Thailand?
No, foreigners cannot 100% own a coffee shop in Thailand. A Thai company with Thai shareholders owning more than 50% of the share capital is required. Nominee shareholders are prohibited.
What are the key business licenses required for a coffee shop in Thailand?
A coffee shop in Thailand needs multiple licenses, including:
- Certificate of Notification for the Establishment of a Food Distribution Site and Food Storage Facility
- Restaurant License (if over 200 sq meters)
- Food Sanitation Compliance
- Alcohol License (if serving alcohol)
- Music License (if playing copyrighted music)
What are the main legal requirements for selling food and drinks in a coffee shop?
All food and beverages must comply with Thai FDA regulations. If importing products, a Free Sale Certificate (FSC) and Import License are required. Food sanitation standards must also be met, including proper hygiene, waste management, and pest control.
What are the foreign ownership restrictions for coffee shops in Thailand?
Selling food and beverages is a restricted activity under the Foreign Business Act (FBA). A foreigner can only open a coffee shop through a Thai-registered company with Thai shareholders holding the majority stake.
Can a foreign investor hire foreign staff in a Thai coffee shop?
Yes, but there are strict regulations. A company must maintain a ratio of 4 Thai employees per foreign worker and have a minimum capital requirement of 2 million Baht per foreign employee for a work permit.
Do I need a special license to sell alcohol in my coffee shop?
Yes, a Retail Alcohol License is required to sell alcohol on the premises. If alcohol is served temporarily for events or promotions, a Temporary Alcohol License may be obtained.
Is a music license required for a coffee shop in Thailand?
Yes, if playing copyrighted music, a music license is mandatory. This includes music from sound systems, live performances, TVs, radios, or streaming services. Licenses can be obtained from Collective Management Organizations (CMOs) in Thailand.
What is the standard lease term for a coffee shop in Thailand?
Most coffee shop leases are for three years with renewal options. However, registering the lease at the Land Office provides better legal protection.
Can I import coffee beans and other products for my coffee shop?
Yes, but imported products must be registered with Thailand’s FDA. A Free Sale Certificate (FSC) and an Import License are required for approval.
What is the current state of the coffee industry in Thailand?
Thailand’s coffee industry is growing rapidly, with an annual growth rate of 8.55% from 2021 to 2023. In 2023, the market value was 34.5 billion baht, with increasing exports and local coffee production.
What type of company structure is best for a coffee shop in Thailand?
A private limited company is the most common business structure for a coffee shop. At least two shareholders are required, with foreign ownership limited to 49%.
Do I need a work permit if I own a coffee shop but don’t actively work in it?
No, if you are only a shareholder and do not perform any business activities. However, signing company documents can be considered “work” and would require a work permit.
What are the food sanitation requirements for a coffee shop?
Coffee shops must comply with food hygiene standards, including:
- Proper waste and wastewater management
- Pest control measures
- Training courses for food handlers
- Clean food preparation and storage areas
What happens if I use nominee shareholders?
Nominee shareholders are illegal under Thai law. A nominee is someone who holds shares without real investment or involvement. Using nominee shareholders can lead to legal penalties.
Where do most Thai coffee shops source their coffee beans?
Most coffee beans in Thailand come from northern provinces like Chiang Mai and Chiang Rai, known for producing high-quality Arabica and Robusta beans.
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