Legal
Starting a Business in Thailand? Here’s What to Know
TL;DR: Starting a business in Thailand offers great opportunities but comes with legal and compliance considerations. Under the Foreign Business Act Thailand, foreigners are usually limited to 49.99% ownership, but 100% foreign ownership is possible through BOI promotion, manufacturing, export-only companies, or the U.S.–Thailand Treaty of Amity. Key risks include nominee shareholder crackdowns, visa and work permit Thailand requirements, and industry licenses. Company registration typically takes 1–2 weeks, with extra time for VAT and permits.
Thailand has become a leading hub for foreign investment, attracting many different kinds of investors including entrepreneurs, SMEs and global corporations looking to start or relocate and start a Business in Thailand.
Thailand’s popularity is based upon its strong infrastructure, skilled workforce, and a government that is happy to welcome and support foreign investment by offering a wide range of incentives.
But while Thailand offers many exciting opportunities, Thailand’s legal landscape can be difficult to understand. Thailand is also starting to actively crack down on the illegal use of Thai shareholders (nominees), immigration compliance, and tax rules. Understanding your options, such as full foreign ownership through BOI promotion or entering into properly structured joint ventures, has become increasingly more important.
Key Points
- Foreign ownership in Thailand is restricted to 49.99% for over 50 business categories under the Foreign Business Act, though 100% foreign ownership is possible through BOI promotion, manufacturing, export-only businesses, Representative Offices, or the US-Thailand Treaty of Amity.
- The use of nominee Thai shareholders is illegal and under increasing government scrutiny.
- Work permits are mandatory for foreigners working in Thailand, with most companies required to employ 4 Thai staff and maintain 2 million THB in paid-up capital per foreign employee (reduced requirements apply for BOI companies).
- BOI (Board of Investment) promotion offers significant advantages including 100% foreign ownership, tax exemptions, and simplified visa processes and reduced requirements.
Company Ownership Restrictions
While Thailand actively looks to attract foreign businesses, there are certain business activities which are reserved for Thai nationals only. The Foreign Business Act (FBA) was introduced as a way to govern business activities involving foreign nationals and entities.
The FBA restricts foreigners or foreign owned companies from undertaking over 50 categories of business activities in Thailand. For these 50 restricted activities foreign ownership of a limited company is capped at a maximum of 49.99% (unless an FBL or a BOI promotion has been obtained). If 50% or more of the shares of a company are owned by a foreigner, it is considered a foreign company.
Are Nominee Shareholders Legal in Thailand?
The use of nominee shares in Thailand is expressly prohibited by Section 36 of the Foreign Business Act.
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 example, 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.
The illegal use of nominee shareholders has become a major area of focus for the Department of Business Development. The DBD recently launched a campaign to crackdown on companies using illegal nominee shareholders. The DBD has set a target of inspecting approximately 46,000 companies suspected of using nominee shareholders.
This development has made it more important than ever to make sure your company has been legitimately set up. To try and mitigate the risks associated with nominee shareholders, companies should consider the following.
When starting a company in Thailand, the first step should always be to check for BOI eligibility and try to obtain 100% foreign ownership when possible. If a BOI promotion is not possible, the company could also consider applying for a Foreign Business Licence or setting up a Representative Office, which still permits full foreign ownership.
If 100% foreign ownership is not possible and the business requires a Thai partner, it’s essential to ensure the structure is legitimate and properly documented. This includes confirming that Thai shareholders have invested directly into the company with clear evidence of a bank transfer, that their financial and professional background aligns with the company’s activities, and that they receive dividends if the company is profitable.
In practice, if the setup involves genuine local partners and all supporting documents are in order, any investigation by authorities should be straightforward and resolved without legal consequences.
Can a Foreigner Own 100% of a Business in Thailand?
For foreigners looking to start a business in Thailand, being able to have 100% foreign ownership is one of the biggest concerns and one of the first questions asked.
Under Thai law, it is possible for companies to be 100% foreign owned, however, depending on the business activities undertaken by the company, there may be restrictions to foreign ownership as per the Foreign Business Act.
Potential options for 100% ownership as foreigner includes:
Export Companies
Thailand encourages exports, and companies that exclusively export products outside Thailand can be 100% foreign owned. Foreign owned export companies must make sure their operations and revenue are only earned abroad, and they can’t sell any products directly to the Thai domestic market.
Manufacturing Companies
Manufacturing is another business activity that is not restricted for foreign ownership meaning companies can generally be 100% foreign-owned in Thailand. This allows foreign investors to own and operate manufacturing businesses without needing a Thai partner.
However, there are certain items that are restricted and cannot be manufactured by foreign owned businesses. For example, firearms, military equipment, certain cultural goods, or products affecting national resources
Manufacturing companies may also be eligible for a BOI promotion, making them even more attractive. BOI promotions offer many advantages including different types of tax exemptions including Corporate Income Tax exemptions and tax exemptions on import of machinery. BOI promotions can also allow full foreign ownership and the ability to own land which can be used for their factory etc.
BOI (Board of Investment)
The Board of Investment (BOI) is a Government agency who aims to help promote foreign investment in Thailand through the provision of attractive benefits for eligible companies in targeted industries that support Thailand’s economic development goals.
BOI companies who have obtained a BOI promotion are eligible for:
- 100% foreign ownership,
- Potential tax exemptions,
- simplified visa processes, and
- work permits for foreign employees.
To be eligible for a BOI promotion, the business activities of the company must align with BOI-promoted sectors, which include technology, software, BPO, services, manufacturing, green energy, and more.
Many foreign investors mistakenly think that the BOI is only available to projects which are technologically advanced or with a heavy emphasis on technology, however, this is not the case and the BOI offers promotions for many different business activities. We always recommend the first step for a foreign investor in Thailand is check whether your company is eligible for a BOI promotion.
Representative Offices
A Representative Office is an option that provides 100% foreign ownership for companies who would like a local presence and do not undertake any commercial activities.
Representative offices are limited to specific activities, such as market research, product sourcing, and customer support on behalf of a parent company abroad. Representative Offices can be 100% foreign-owned, they are not able to generate revenue in Thailand.
Representative Offices are a suitable option for companies needing a base in Thailand to support regional activities, improve brand visibility, or undertake market research without engaging in direct sales.
Treaty of Amity
The U.S.-Thailand Treaty of Amity allows 100% foreign ownership for American citizens and companies. As well as 100% foreign ownership, the Treaty of Amity also grants American nationals the right to own and operate businesses with nearly equal benefits to Thai nationals.
Under this treaty, American-owned businesses are exempt from foreign ownership restrictions, with some exceptions in areas like land ownership and certain regulated sectors.
Read more:
Complex Regulatory Environment
Starting a business in Thailand will most likely require obtaining a business license or permit to operate legally.
Thailand requires a range of business licenses for different types of commercial activities. TThe specific licenses needed depend on the company’s business activities. Below is an overview of both general and industry-specific licenses commonly required by businesses:
General Business Licenses
Restaurant License: Required to run any establishment (whose premises are a minimum of 200 sqm) that serves food to the public. A certification of notice is required for any Thai restaurants whose premises are below 200 sqm.
Import/Export License: Needed by businesses that engage in bringing goods into or shipping products out of Thailand.
Licenses for Regulated Industries
Tourism License: Required for companies who offer travel services, including tour operators and travel agencies.
Education License: Required to legally operate educational institutions, such as private schools or language academies.
Financial Services License: Required for entities offering financial products or services, including banks, insurance firms, and similar providers.
Please note, general business licences are different from the previously mentioned Foreign Business Licence. General business licences, for example, an Import licence is required by all companies, even fully Thai companies. A foreign business licence is only required by foreign owned businesses who wish to engage in business activities that are restricted under the Foreign Business Act.
Read more:
Work Permits and Visa Challenges
Work permits are a mandatory document for any foreigner working or who intends to work in Thailand. Failure to obtain a valid work permit could result in punishments for the offending foreigner and the company they work for who failed to obtain a work permit.
There are certain exceptions to this, for example holders of the Destination Thailand Visa (DTV) or the Long Term Residency Visa (LTR) under the Work from Thailand category. While holders of these visas do not require a work permit, they are restricted in the type of work they can undertake in Thailand.
DTV holders can only provide services or undertake work for clients or customers outside of Thailand only. LTR visas are also restricted to working for clients and providing services outside of Thailand, but holders of this visa must work for an established company and satisfy strict application requirements.
One important consideration is that directors and shareholders don’t require a work permit if they do not engage in any work activities. However, Thailand has a very broad definition of work and even things such as signing documents on behalf of your company in Thailand could be considered as work and requires a work permit.
Directors and shareholders should be aware that the following visa types do not allow the holder to obtain a work permit, and therefore cannot undertake any work:
- Tourist Visa,
- Education Visas,
- Dependant Visas (with the exception of a dependant under the LTR visa),
- Elite Visa,
- Retirement Visa.
If the director holds one of these visa types and wishes to engage in work, they will be required to change to a visa type that supports work permits, usually the Non-Immigrant B visa.
What are the Requirements for Obtaining Work Permits for Foreign Staff?
For businesses operating in Thailand, understanding the process of hiring foreign employees requires careful consideration. Thailand’s work permit system is designed to balance international expertise with creating and supporting local employment opportunities.
Depending on your company structure, there are different rules and requirements for supporting a work permit.
Read more:
Thai Limited Companies
Companies who wish to support a work permit for a foreign employee must be able to satisfy the following conditions before being able to hire foreign employees:
- The company must be registered in Thailand
- Registered for VAT
- 4 Thai employees must be employed by the company per foreign employee
- The company must have a minimum paid-up capital of THB 2 million per foreign employee. However, certain exceptions are available for Representative Offices and BOI companies.
If the foreign employee is married to a Thai national, the work permit requirements are halved i.e the company will only need 2 Thai employees and 1 million THB in paid up capital.
Read more:
BOI Promoted Companies
One of the main advantages for companies promoted by the BOI is that they are not subject to the same visa and work permit requirements as other company structures. For example, BOI promoted companies are not restricted by the same 2 million THB is paid up and capital and a minimum of 4 Thai staff per work permit.
Foreigners employed at a BOI-promoted company can obtain their BOI visa and work permits from the One Stop Service Centre instead of the Labour or Immigration offices. The applicant process for applying for a work permit and visa is significantly different when compared to a Thai Limited Company.
In order for a BOI promoted company to be able to hire foreign staff, they must register their company into the Single Window for Visas & Work Permits system. Registration on the Single Window system will allow the company to make future requests for foreign workers.
BOI visa and work permits require pre approval before being issued, this is obtained by submitting all the required information via the BOI’s online Single Window system, typically pre approval can take 1-2 months. Once pre-approval has been granted, the applicant can collect their visa and work permit from the One Stop Service Centre and can be completed in a day.
Representative Offices
Representative Offices in Thailand are also subject to a reduced ratio for hiring foreign employees. In order for a Representative Office to hire a foreign employee, they must satisfy the ratio of 1:1 (1 Thai employee per foreign employee). While there is a reduced employee ratio, Representative Offices are still required to have a paid up minimum capital of 2 million THB per employee.
Furthermore, a Representative Offices can only hire up to 3 foreign employees in practice.
Labor Market and Hiring Restrictions
Thailand has introduced strict quotas on hiring foreign staff to encourage local employment and protect job opportunities for Thai nationals. As outlined earlier, most companies must employ at least four Thai employees per one foreign employee, and maintain a minimum of THB 2 million in paid-up capital for each foreigner hired (unless a BOI promotion has been obtained). These restrictions can limit the ability of smaller companies or startups to be able to hire or support work permits for foreign employees.
In addition to these quotas, certain jobs are “prohibited” to foreign workers. These restricted jobs are generally roles that can easily be filled by Thai citizens, such as administrative work, sales, and manual labor. Companies must therefore ensure that foreign employees are engaged in roles that are permitted under Thai law.
High Cost of Skilled, Multilingual Local Employees
Hiring foreign professionals in Thailand is much more expensive than hiring local staff. In addition to the minimum wage being significantly higher for foreign employees (foreigners from the USA, Canada, Western Europe, Australia, and Japan may be required to earn a minimum of THB 50,000 per month), businesses must consider costs associated with work permit applications, visa fees, and administrative fees.
Furthermore, highly skilled, multilingual Thai professionals are in high demand and will request higher-than-average salaries. The high demand for such local employees, especially in niche industries, can further increase the operating costs for foreign businesses in Thailand.
PEO Services (Professional Employer Organizations)
A Professional Employer Organization service (an Employer of Record), offers a quick and efficient option for entering the Thai market. A PEO provides help provide assistance with the work permit process for employees and managing the accounting and payroll responsibilities.
PEO services offer an efficient solution for companies and individuals looking to enter the Thai market and begin their operations immediately, while undertaking the company registration process.
For businesses testing the Thai market or undertaking a short-term project, PEO services offer a cost-effective and flexible alternative to setting up a company. Unlike establishing a legal entity, which requires a lot of mandatory obligations such as monthly accounting, tax filings, annual audits, and the preparation of financial statements, a PEO can significantly reduce these administrative requirements.
In addition, foreign investors setting up a company in Thailand must meet strict requirements to support a work permit such as the previously mentioned quotas. With a PEO, these requirements are managed by the provider, allowing the foreign professional to begin working in Thailand as soon as their work permit is approved.
Once the client’s company is fully established and operational, they can transfer their work permit from the PEO provider to their new entity, ensuring continuity and compliance throughout the transition.
Read more:
5 Reasons Why PEO Services in Thailand Could Be Cost-Effective Solutions for Small Businesses
Operational Hurdles for Foreign Businesses
While Thailand is considered to be a friendly location for foreign investment, there are some hurdles that are faced by almost every foreign investor in Thailand.
How long does it take to register a business in Thailand?
For most foreign entrepreneurs, registering a Thai Limited Company is a straightforward process. Standard company registrations are typically completed within 1–2 weeks, provided all required documents are prepared and submitted correctly.
In some cases, the process can be even faster, basic setups may be finalised in as little as five business days. However, timelines can also extend significantly for more complex structures, such as companies applying for BOI promotion, where additional approvals and compliance checks are required. In these cases, processing may take several months, depending on the business activity, government review periods, and how quickly supporting documentation is provided.
Planning ahead and working with experienced legal advisors helps avoid unnecessary delays and ensures your company is registered within the desired timeframe.
Banking and Opening a Corporate Account
Opening a corporate bank account in Thailand is normally a very straightforward process. Banks in Thailand are a lot less strict when compared to other countries as they usually do not challenge your business model or require lots of information about your intended business activities or operations.
Opening a corporate bank account is a relatively quick process and will take approximately 2 hours.
When Starting a business in Thailand you must open a bank account, the application must be made by one of the company’s directors. While this seems like a straightforward requirement, it may be problematic for companies who only have foreign directors.
Updated regulations are making it harder for foreign directors to open a company bank account unless they hold a long-term visa, such as a Non-Immigrant B visa with a work permit or an LTR visa.
If a foreign director does not have the correct visa, the bank is likely to decline the application. If the applicant is lucky and an account is allowed to be opened, it may be restricted to a savings or deposit account for specific purposes, such as depositing registered capital when establishing a new company
In such a situation, it is often easier in practice to have a local Thai director open the bank account. However, companies must be careful when appointing a Thai director, as they will also be legally liable for the company.
Recently, Thai authorities have become a lot stricter about appointing nominee directors to help foreigners avoid these regulations. Therefore, any Thai director involved in the business should have a genuine role and responsibility within the company.
Accounting & Tax Filing Requirements
Every company registered in Thailand is subject to tax and accounting obligations. At the very minimum Thai companies must file a half year tax submission report, prepare annual financial statements, appoint an auditor and file the corporate income tax return together with the audited financial statements with the Revenue Department every year.
This is also a mandatory requirement for all companies, even those considered dormant or didn’t make any transactions or conduct any business over the past year.
Read more:
How to Complete the Annual Closing Process for Company Accounts (Year-End Closing)
BOI Accounting and Tax Filing Requirements
BOI promoted companies face stricter regulatory requirements and specific reporting obligations.
It is essential that the accounting for BOI promoted companies is properly done, as authorities will examine your financial records in detail to make sure that the company is complying with its promotion requirements.
Failing to properly deal with accounting as a BOI promoted company can have serious consequences such as:
- Tax audits and penalties
- Suspension or loss of BOI privileges (tax exemptions and the ability to obtain new permits or apply for work permit renewals)
- Risk of promotion cancellation
How can Belaws help?
For more information about starting a business 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.
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Consultations can be hosted via WhatsApp or Video Conferencing software for your convenience. A consultation with one of our legal experts about your company registration 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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FAQ
Can a foreigner own 100% of a business in Thailand?
Yes, but it depends on your business type and approach! While the Foreign Business Act typically limits foreign ownership to 49.99% for most businesses, there are several ways to achieve 100% foreign ownership:
- BOI (Board of Investment) promotion – This is often your best bet and covers many industries including technology, manufacturing, and services
- Export-only companies – If you’re exclusively exporting products outside Thailand
- Manufacturing businesses – Generally allowed 100% foreign ownership (with some restricted items)
- Representative Offices – For market research and support activities (no revenue generation in Thailand)
- US-Thailand Treaty of Amity – If you’re an American citizen or company
Pro tip: Always check BOI eligibility first – it’s often easier than you think and comes with great benefits like tax exemptions!
What are the main legal risks for foreigners starting a business?
The biggest risks you need to watch out for are:
Nominee shareholder violations – This is illegal and actively being cracked down on by authorities. The Department of Business Development is inspecting around 46,000 companies suspected of using illegal nominees. If you need Thai partners, make sure they’re genuine investors with proper documentation.
Work permit compliance – Working without a proper work permit can result in serious penalties for both you and your company. Even signing documents can be considered “work” in Thailand!
Industry licensing issues – Many businesses require specific licenses (restaurant, import/export, tourism, education, financial services). Make sure you have all required permits.
Immigration compliance – Visa requirements are strict, and certain visa types (tourist, education, dependent, elite, retirement) don’t allow you to obtain work permits.
How long does it take to register a business in Thailand?
For a standard Thai Limited Company, you’re looking at 1-2 weeks if all your documents are ready. In some cases, basic setups can be done in as little as 5 business days.
However, if you’re going for more complex structures:
- BOI promotions can take several months due to additional approvals
- VAT registration adds extra time
- Business licenses vary by industry
The key is proper preparation and working with experienced advisors to avoid delays.
What about work permits - what do I need to know?
Work permits are mandatory for any foreigner working in Thailand, with some specific requirements:
For regular Thai Limited Companies:
- Must employ 4 Thai staff per foreign employee
- Need 2 million THB paid-up capital per foreign employee
- Company must be registered for VAT
Easier options:
- BOI companies have relaxed requirements (no 4:1 ratio or 2M capital requirement)
- Representative Offices only need 1:1 ratio (but limited to 3 foreign employees max)
- If you’re married to a Thai national, requirements are halved (2 Thai staff, 1M capital)
Important: Directors and shareholders don’t need work permits if they don’t engage in work activities, but Thailand defines “work” very broadly!
Is using Thai nominee shareholders legal?
Absolutely not! This is explicitly prohibited under Section 36 of the Foreign Business Act. Nominee shareholders are defined as individuals who:
- Have no genuine interest in the business
- Made no significant investment
- Lack financial means to be legitimate partners
- Exist solely to help foreigners bypass ownership restrictions
The government is actively cracking down on this practice. If you need Thai partners, ensure they’re legitimate investors with proper documentation, bank transfer evidence, and receive actual dividends.
What are my options if I can’t get 100% foreign ownership?
If BOI promotion isn’t available and you need Thai partners, here’s how to do it right:
Legitimate Thai partnerships:
- Partners must invest their own money (with bank transfer proof)
- Their background should align with the business
- They should receive dividends if the company is profitable
- Proper documentation of their role and investment
Alternative structures:
- Representative Office for market research and support activities
- PEO (Professional Employer Organization) services as a temporary solution while setting up your company
- Foreign Business License applications for restricted activities
How difficult is it to open a corporate bank account in Thailand?
Opening a corporate bank account is generally straightforward and takes about 2 hours. Thai banks are less strict than many other countries about business models.
The catch: You need the right visa! Updated regulations make it harder for foreign directors to open accounts unless they have:
- Non-Immigrant B visa with work permit
- LTR visa
- Other long-term visas
Workaround: Having a Thai director open the account is often easier, but be careful – they must be genuine participants, not nominees, as authorities are cracking down on this practice.
What about ongoing compliance requirements?
Every Thai company must:
- File half-year tax reports
- Prepare annual financial statements
- Appoint an auditor
- File corporate income tax returns with audited statements
- This applies even to dormant companies with no transactions!
BOI companies have stricter requirements:
- Detailed financial record keeping
- Specific reporting obligations
- Risk of losing BOI privileges if non-compliant
- Potential tax audits and penalties
Bottom line: Budget for ongoing accounting and compliance costs – they’re mandatory!
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