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Business licences in Thailand
07/10/2022
Starting a business in Thailand will in all likelihood require a company to apply for a business license or permit in order to legally operate. Any required licences are dependent on the business activities of the company.
In this article we will take a look at business licences in Thailand.
Key points
- Business licences or permits are required for certain business activities.
- The Foreign Business Act restricts foreigners or foreign owned companies from undertaking over 50 business activities. A Foreign Business Licence is required to counteract these restrictions.
- Business licences can only be obtained after the company has been registered with the Ministry of Commerce.
Who needs a business licence?
Setting up a business in Thailand may require a licence or permit depending on the business activities undertaken by your business.
Some examples of regulated activities which require specific licenses include tourism, school and childcare, liquor, medical, food and beverage industries.
The foreign business license in Thailand
In addition to the examples listed above, there are certain categories of business activities in Thailand that cannot be undertaken by a company that is majority owned by foreign nationals or non-Thai persons. The restricted activities are listed in the Foreign Business Act.
If the foreign entity or firm wants to operate a business which deals in one of the prohibited classes of activities, it will be required to obtain a foreign business license in accordance with the regulations of the Foreign Business Act.
A foreign business license in Thailand enables foriegn owned companies to undertake such activities which normally are restricted by the FBA.
For more information about the Foreign Business Act, please take a look at our blog post here.
Examples of businesses that may require a license
As mentioned above, a business license permits companies to conduct certain activities and is issued by the relevant Thai government department. Business licenses can be obtained by a company after it has been registered with the Ministry of Commerce.
For an overview of some of the more commonly required licenses in Thailand, please see the following:
Medical license
In order to be allowed to start a medical company in Thailand, different licenses may be required. Which licence you need will depend on the activities you undertake within the medical field.
If you plan to operate a service business, such as a rehabilitation center or a nursing home, a medical service business license must be obtained from the Department of Health Service Support.
If you plan to undertake an activity relating to medical manufacturing and have a factory which uses machines with a total of 50 or more horses or employs 50 or more people, a Factory license would need to be obtained from the Department of Industrial Works. Furthermore, if neither of the above criteria are met, an application for a Business Establishment license should be made to the Local Administration Organization.
For any clinical research activity, it is necessary to apply for a Science laboratory capacity certificate from the Department of Medical Science.
Finally, according to the Thai Drug Act Be 2510 (AD 1967), before marketing medical equipment, pharmaceutical products or medical food, any company must obtain permission from the Food and Drug Administration (FDA).
Cannabis licence
While it is not illegal, Cannabis is considered to be a controlled herb according to a Ministry of Health announcement released on the 16th June 2022. Therefore, any business who wishes to sell and export Cannabis will be subject to licence requirements as stiplulatec by Section 46 of the Protection and Promotion of Traditional Thai Medicine Wisdom Act.
Furthermore, companies who import Cannabis seeds (for both Thai and foreign owned entities) must apply for the appropriate licence from the Thai Plant Quarantine department.
The production of products containing Cannabis is subject to various different licence requirements and obligations depending on the type of product. For example, food products require a licence for food manufacturing from the Food and Drug Administration (FDA).
More information can be found here.
E-commerce license
Any business in Thailand which operates one or more websites for the sale of their goods or services is required to obtain an e-commerce license. An application for the e-commerce license can be submitted once the website is operational, and requires the following details from the website owner include:
- Name of the website
- Nature of the goods or services being sold on the website
- The date on which the website starts/started operating (application should be made within 30 days from the start date)
- Method of payment for the purchase
- Document evidencing the domain name registration or certification document from the service
- provider (ISP or web host)
Restaurant and bars
The licences required by a restaurant depends on the services offered. However, there are a few mandatory licenses which need to be obtained by most restaurants in Thailand.
These licences are as follows:
- A restaurant license. This licence must be obtained by companies whose premises are a minimum of 200 sqm. A certification of notice is required for any Thai restaurants whose premises is below 200 sqm;
- A liquor license. A liquor licence is required for any restaurant who will be serving alcoholic drinks on the premises;
- A music license. This licence must be obtained if the restaurant will have live music or any kind of music (radio, spotify etc) playing on its premises.
These licenses will be granted for a period of 1 year and must be renewed annually by the company.
More information can be found here.
Financial services businesses
Businesses that wish to provide financial services through a company operating in Thailand will require certain licenses granted by the Bank of Thailand. Such services include:
- commercial banks,
- finance companies,
- credit finance companies,
- asset management companies and
- e-payment channel services.
Specialist financial institutions who assist in government policies to promote investment and economic development for Thailand will require further permission from the Ministry of Finance.
Import/export companies
A import/export company will require certain business permits. However, the permits required will depend on the category of goods being imported/exported.
Importing controlled goods may require specific licenses from the Food and Drugs Administration of Thailand.
Examples of controlled goods includes importing:
- food,
- medicines and
- cosmetic products.
Please note that importing electronic devices such as mobile phones will require a permit from the National broadcasting department in Thailand.
Furthermore, an import/export company will need to apply for a customs paperless license from the customs department in Thailand in order to be able to import/export goods under the company’s name.
Travel agencies
Operating a travel agency in Thailand will require a Tourism license from the Tourism Authority of Thailand. Organizing and selling tours and packages, scheduling accommodation and selling travel tickets is strictly prohibited without this license.
The license is categorized into the following groups, inbound, outbound and domestic tourism.
Travel agencies must be majority Thai owned and a local director is required to sign for the tourism license. It is important to note that the signing authority of the local director can be restricted to matters related only for the tourism license. This allows the foreign shareholders to maintain control of other aspects of the company.
Education businesses
Registering an education business in Thailand requires licensing and approval from the Ministry of education or the Department of Social welfare. Approval from the relevant authority depends on the category of education offered by the business.
Before setting up an education related business, there are a couple of key factors that you will need to consider such as the business premises and legal structure for the company. Failure to correctly address these will result in the application for the relevant licence being rejected.
How can Belaws help?
For more information about business licences in Thailand, why not talk to one of our experts now?
Please note that this article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of up to 1 hour and are conducted by expert Lawyers who are fluent in English, French and Thai.
Consultations can be hosted via WhatsApp or Video Conferencing software for your convenience. A consultation with one of our legal experts is undoubtedly the best way to get all the information you need and answer any questions you may have about your new business or project.
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Frequently asked questions
Can a foreigner open a company in Thailand?
Yes it is possible for a foreigner to open a company in Thailand. There are also options available which allow 100% foreign owned companies as well.
How much does it cost to set up a company in Thailand?
The official fees for registering a company in Thailand are THB 7,500.
How do I start a limited company in Thailand?
- Step 1: Choose and register a company name.
- Step 2: Draft and file the Memorandum of Association.
- Step 3: Call and hold a Statutory Meeting of the shareholders
- Step 4: Register the Company with the Ministry of Commerce.
- Step 5: Register the company for Value-Added Tax (VAT) and Income Tax
Is it good to start a business in Thailand?
Thailand is an attractive option for those wishing to start a business. Thailand has a great infrastructure in place and scheme such as the BOI provide great incentives for companies to take advantage of.
How much money do you need to start a business in Thailand?
Typically, it costs between THB 40,000 to THB 60,000 (excluding VAT and Government fees) to start a business in Thailand.The official fees for registering a company in Thailand are THB 7,500.
How can a foreigner start a small business in Thailand?
Yes, foreigners can start a business in Thailand. However, certain business activities are restricted by the Foreign Business Act and in order for businesses to undertake them they must obtain a Foreign Business Licence/Certificate which can be time consuming and complicated.
What is the biggest problem in Thailand?
The biggest problem facing foreign owned companies is being able to undertake their desired business activity as a 100% foreign owned company. Many business activities are protected by the Foreign Business Act and in order for a company to operate in these protected industries, they will be required to be majority owned by Thai Shareholders (unless a BOI promotion has been obtained).
Why is it hard to do business in Thailand?
The Foreign Business Act limits to the business activities a 100% foreign owned company can undertake. This means Thai Shareholders will need to be sought or a BOI promotion obtained in order for a company to legally operate.
Can I own a company in Thailand?
Yes, foreigners can start a business in Thailand. However, certain business activities are restricted by the Foreign Business Act and in order for businesses to undertake them they must obtain a Foreign Business Licence/Certificate which can be time consuming and complicated.
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