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. These reviews have led to the opening of Thailand’s securities industry in 2013 and other financial businesses in 2016. In July 2016 the Thai Cabinet approved draft MOC regulations opening six categories of service businesses to foreign competition, which have since been finalized and published in the Royal Gazette on 9 June 2017 (with immediate effect).
The exempted service businesses are as follows:
1.) twelve ancillary businesses of financial institutions (such as private repo, cash management, factoring, and leasing). These exemptions are in addition to the “core” exemptions in the financial industry that were approved in February 2016;
2.) asset management businesses under the Assets Management Companies Act;
3.) representative offices of foreign entities which engage in international business pursuant to the Office of the Prime Minister’s 1997 regulations on the visa and work permit center (as amended);
4.) regional offices of foreign entities which engage in international business pursuant to the Office of the Prime Minister’s 1997 regulations on the visa and work permit center (as amended);
5.) provision of services to Government Agencies (as defined in the government budget law); and
6.) provision of services to State Enterprises (as defined in the government budget law).