Thailand’s Foreign Business Act (FBA) lists 21 categories of businesses in Annex 3 of the FBA where foreign majority ownership of such businesses is restricted because the government contends Thais are “not yet ready to compete with foreigners”. This list includes “other service business, unless specifically exempted by Ministry of Commerce regulations”, and the Ministry of Commerce (MOC) has interpreted the term “services” very broadly.
Annex 3 is supposed to be reviewed at least once annually for purposes of determining if businesses listed on that annex can be opened up to foreign competition, and on 12 July, 2016 the Thai Cabinet approved draft MOC regulations opening six categories of service businesses to foreign competition:
1.) Businesses relating to or necessary for the operation of commercial banks (with 12 sub-categories);
2.) Asset management businesses under the Assets Management Companies Act;
3.) Representative offices;
4.) Regional offices;
5.) Provision of services to state agencies; and
6.) Provision of services to state enterprises.
The draft is being sent to the Council of State for further review. Once the MOC regulations are finalized and published in the Royal Gazette, foreign majority owned businesses will no longer need to obtain an FBA license to engage in these business operations (although the FBA’s minimum capitalization requirement of two million Baht will continue to apply for each such business operated by a foreigner). Watch this site for more information