coconut land and house is located in koh samui, thailand. the image shows one of their many luxurious beach houses. the houses are available for both rent and sale. on the right is the coconut land house logo. in green colours saying coconut land and house group of companies established 1991

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Alien business law

Alien Business Law

Note: The Ministry of Commerce has proposed a Foreign Investment Law (FIL) that has been approved by the Cabinet and that is currently in the parliamentary process. When approved, it will replace the Alien Business Law.

A. Introduction

Aliens in Thailand derive their legal rights primarily from the domestic laws of Thailand. In general, aliens enjoy the same basic rights as Thai nationals.

Restrictions on alien ownership in commercial banks, insurance companies, commercial fishing, aviation business, commercial transportation, commodity export, mining and other enterprises exist under various laws. In addition, Thai participation will frequently be required in those activities seeking promotion from the BOI.

B. The Alien Business Law

The Alien Business Law of 1972 primarily serves to define and narrow the scope of foreign participation in Thai business activities. An alien is defined as a natural or juristic person without Thai nationality and includes:

  • A juristic person with at least one-half of shares in its registered capital being held by aliens or juristic persons in which the capital contribution by aliens is valued at least one-half of its total capital
  • A juristic person with more than half of the number of its shareholders, partners or members being aliens, regardless of the amount of capital invested by aliens
  • A limited partnership, or a registered ordinary partnership of which the managing partner is an alien

C. Businesses Subject to Regulation

Businesses that initiate activities that fall under categories A, B and C (listed below) of the Alien Business Law are subject to the limitations imposed by law. Activities outside of the apparent scope of the Alien Business Law include many manufacturing industries, leasing and lending activities. Some of these businesses may be subject to restrictions under other Thai laws, regulations and practices. Businesses in Categories A and B are closed to aliens. Alien enterprises granted promotional privileges by the Board of Investment are permitted to engage in a Category B business.

While businesses in Category C remain open, Thai authorities grant permits to foreigners for work in these categories only when they are convinced that such new businesses could not be competently conducted by an organization in which the majority ownership is Thai.

Category A Closed to Aliens

  • Agricultural Businesses
    Rice farming
    Salt farming, including manufacture but excluding rock salt mining
  • Commercial Businesses
    Internal trade in local agricultural products
    Land trade
  • Service Businesses
  • Brokerage or agency
    Barber, hairdressing, and beautification
  • Other Businesses
    Building construction

Category B - Closed to Aliens unless promoted by the Board of Investment

  • Agricultural Businesses
    Orchard farming
    Animal husbandry, including silk worm raising
  • Industrial and Handicraft Businesses
    Rice mill
    Manufacture of flour from rice field crops
    Manufacture of sugar
    Manufacture of beverage, with and without
    Alcoholic blending
    Manufacture of ice
    Manufacture of drugs
    Cold storage
    Wood processing
    Manufacture of product from gold, silver, niello, or bronze
    Manufacture of casting of images of Buddha and manufacture of alms bowls
    Manufacture of wood carvings
    Manufacture of lacquerware
    Manufacture of all types of matches
    Manufacture of lime, cement, or cement by-products
    Stone blasting or crushing
    Manufacture of plywood, wood veneer, chip-board or Hard-board
    Manufacture of garment or shoes except for export
    Printing press
    Newspaper publication
    Silk combing, silk weaving or printing of pattern or Silk material
    Manufacture of products from silk, silk treads or silk cocoon.
  • Commercial Businesses
    Retailing of all products except those specified in Category C (Below)
    Sale of mining products except those specified in Category C
    Sale of all types of food and beverage except those specified in Category C
    Sale of antiques, period antiques or works of art.
  • Service Businesses
    Tour agencies
    Hotel business except hotel management
    Business under the law on service-providing establishments
    Photography, photographic developing and printing
    Tailoring and dressmaking
  • Other Businesses
    Internal transport by land, water, or air.

Category C Open to Aliens

  • Business in Commerce
    Wholesales of all types of products within the country except those specified in Category A (Above)
    Export of all types of products
    Retailing machinery, equipment and tools
    Sale of food and beverage for the promotion of tourism
  • Business in Industry and Handicrafts
    Manufacture of animal feeds
    Extraction of vegetable oil
    Manufacture of embroidering and knitting products including weaving, dyeing, and pattern printing
    Manufacture of glass containers including light bulbs
    Manufacture of crockery
    Manufacture of writing and printing paper
    Rock salt mining
  • Business in Services
    Except for those specified in Category A and Category B
  • Other
    Other constructions except those specified in Category A

Many American-owned enterprises have invoked the provisions of the Treaty of Amity and Economic Relations between Thailand and the United States to claim exemption from the Law. The treaty requires national treatment be granted to persons of each country by the other country. To receive protection, Americans must register under the Treaty. Although on paper the Treaty appears self-executing, the Thai Government will not recognize the American applicant until such applicant proves its American nationality.

D. Permits

An alien desiring to engage in any business specified in Category C as listed above must submit an application to the Department of Commercial Registration and must receive a permit an Alien Business License prior to beginning business activities. Permits will be valid for a fixed period and will be subject to conditions therein stated.

Ministerial Regulations under Section 8 of the Law and recent announcements of the Department established the following standard conditions for companies applying for Alien Business permits:

  • The total debt financing used in the business shall not exceed seven times the capital owned by the shareholders, partners and proprietors of the business
  • Money remitted from abroad shall not be less than the amount declared as capital investment to be made in Thailand
  • The number of Thai and alien directors shall be in proportion to capital held
  • At least one person responsible for operating the business must have his domicile in the Kingdom
  • Upon expiration of the permit, the portion of the capital of the share-holders, partners or business proprietors owned by Thai nationals shall not be less than that owned by aliens.

Establishing a Business
Setting up a company
Reporting Requirements
Types of business in Thailand
Alien business law
Work Permits
International Banking
Visas and Immigration Law

© Coconut Land & House Group of Companies
Coconut Land & House, Santi Thani, Samsara are members of Coconut Land & House Group of Companies EST. 1991