Thailand Foreign Business Act B.E.2542
FOREIGN BUSINESS ACT, B.E. 2542 (1999)
BHUMIBOL ADULYADEJ, REX;
Given on the 24th Day of November B.E. 2542;
Being the 54th Year of the Present Reign.
His Majesty King Bhumibol Adulyadej is graciously pleased to proclaim that:
Whereas it is expedient to revise the law on foreign businesses;
Whereas it is acknowledged that this Act contains certain provisions related to the restriction of rights and liberties of individuals, in respect of which Section 29, in conjunction with Sections 35 and 50 of the Constitution of the Kingdom of Thailand, permits such restrictions by virtue of the provisions of law;
Be it, therefore, enacted by the King, by and with the advice and consent of the National Assembly, as follows.
Section 1. This Act is called the “Foreign Business Act, B.E. 2542 (1999).”
Section 2. This Act shall come into force ninety days from the date of its publication in the Government Gazette.
Section 3. The following are repealed:
(1) Notification of the National Executive Council No. 281, dated 24th November B.E. 2515 (1972);
(2) Act Amending the Notification of the National Executive Council No. 281, dated 24th November B.E. 2515 (1972), B.E. 2521 (1978);
(3) Act Amending the Notification of the National Executive Council No. 281, dated 24th November B.E. 2515 (1972) (No. 2), B.E. 2535 (1992).
Section 4. In this Act:
“Foreigner” means:
(1) a natural person who is not of Thai nationality;
(2) a juristic person not registered in Thailand;
(3) a juristic person registered in Thailand, which is:
(a) a juristic person with at least one-half of its capital shares held by persons under (1) or (2), or a juristic person where investment by persons under (1) or (2) amounts to at least one-half of the total capital;
(b) a limited partnership or registered ordinary partnership where the managing partner or manager is a person under (1);
(4) a juristic person registered in Thailand with at least one-half of its capital shares held by persons under (1), (2), or (3), or a juristic person where investment by persons under (1), (2), or (3) amounts to at least one-half of the total capital;
For the purpose of this definition, shares of a limited company represented by share certificates issued to bearers are deemed as shares held by foreigners, unless otherwise provided by Ministerial Regulation.
“Capital” means the registered capital of a limited company or the paid-up capital of a public limited company, or money invested in a partnership or juristic person by its partners or members.
“Minimum capital” means, in the case where the foreigner is a juristic person registered in Thailand, the capital of the foreigner; and, in the case where the foreigner is a juristic person not registered in Thailand or a natural person, foreign currencies brought and used by foreigners at the commencement of business operations in Thailand.
“Business” means the operation of an undertaking in agriculture, industry, handicraft, commerce, services, or any other trade-related activity.
“Licence” means a business operation licence.
“Licence grantee” means a foreigner to whom a licence has been granted.
“Certificate” means a business operation certificate.
“Certificate grantee” means a foreigner to whom a certificate has been granted.
“Commission” means the Foreign Business Commission.
“Competent official” means a person appointed by the Minister to perform activities under this Act.
“Registrar” means the person appointed by the Minister as the Foreign Business Registrar.
“Director-General” means the Director-General of the Department of Business Development.
“Minister” means the Minister in charge of the execution of this Act.
Section 5. In granting permission to foreigners for business operations under this Act, consideration shall be given to the advantageous and disadvantageous effects on national safety and security, economic and social development of the country, public order or good morals, national values in arts, culture, traditions, and customs, natural resource conservation, energy, environmental preservation, consumer protection, size of undertakings, employment, technology transfer, and research and development.
Section 6. The following foreigners may not operate any business within the Kingdom:
(1) a foreigner who has been deported or whose deportation is pending;
(2) a foreigner entering and staying in the Kingdom without permission under the law on immigration or other laws.
Section 7. The following foreigners may operate businesses upon obtaining a licence from the Director-General and may operate only such businesses, and in such localities, as prescribed in the Notification issued by the Minister with the approval of the Council of Ministers and published in the Government Gazette. The Minister may prescribe any conditions deemed appropriate in such Notification:
(1) a foreigner born in the Kingdom without Thai nationality under the law on nationality or other laws;
(2) a foreigner who has become a foreigner due to the revocation of nationality under the law on nationality or other laws.
The application for a licence, issuance of a licence, and term of a licence shall be in accordance with the rules and procedures prescribed in the Ministerial Regulation.
In the case where the Director-General refuses to grant permission to the foreigner under paragraph one for the operation of businesses, such foreigner has the right to appeal to the Minister, and the provisions of Section 20, paragraphs one and three, shall apply mutatis mutandis.
Section 8. Subject to Sections 6, 7, 10, and 12:
(1) no foreigner may operate businesses not permissible to foreigners by special reason, as prescribed in List One;
(2) no foreigner may operate businesses related to national safety or security, businesses impacting arts, culture, traditions, customs, and folklore handicrafts, or businesses impacting natural resources or the environment, as prescribed in List Two, unless obtaining permission from the Minister with the approval of the Council of Ministers;
(3) no foreigner may operate businesses in respect of which Thai nationals are not yet ready to compete with foreigners, as prescribed in List Three, unless obtaining permission from the Director-General with the approval of the Commission.
Section 9. Any amendment or revision of categories of businesses in the Lists annexed hereto shall be by Royal Decree, except for the businesses in List One or in List Two, Chapter 1, where such amendment or revision shall be by an Act.
The Commission shall consider and review categories of businesses in the Lists annexed hereto at least once every year from the date of the entry into force of this Act and shall prepare an opinion for submission to the Minister.
Foreigners operating businesses not prescribed in the Lists annexed hereto prior to the amendment or revision of categories of businesses under paragraph one shall, where such businesses are thereafter specified as requiring permission under this Act and such foreigners intend to continue operating them, notify the Director-General to obtain a certificate in accordance with the rules and procedures prescribed in Section 11.
During the period in which action is taken under paragraph three and a certificate has not yet been obtained, such foreigner shall not be deemed as operating the business without permission under this Act.
Section 10. The provisions of Sections 5, 8, 15, 17, and 18 shall not apply to foreigners operating businesses specified in the Lists annexed hereto upon permission granted temporarily by the Government of the Kingdom of Thailand.
Foreigners operating businesses specified in the Lists annexed hereto by virtue of a treaty to which Thailand is a party or by which Thailand is bound due to obligations shall be exempt from the application of the provisions of the sections specified in paragraph one and shall be governed by the provisions of and conditions set forth in such treaty, which may, inter alia, confer upon Thai nationals or Thai enterprises the right to operate businesses in the countries of nationality of such foreigners as a matter of reciprocity.
Section 11. Foreigners under Section 10 who intend to operate businesses specified in the Lists annexed hereto shall notify the Director-General in accordance with the rules and procedures prescribed in the Ministerial Regulation to obtain certificates. The Director-General shall issue certificates to such foreigners without delay but no later than thirty days from the date of receipt of their written notification, unless the Director-General considers that the notification is not in accordance with the rules and procedures prescribed in the Ministerial Regulation or Section 10. In such cases, the Director-General shall notify the foreigners without delay but no later than thirty days from the date of receipt of their written notification.
The certificates shall also indicate conditions prescribed by the Government or the treaty.
Section 12. In cases where a foreigner’s business is promoted under the law on investment promotion or granted written permission for the operation of industry or trade for export under the law on the Industrial Estate of Thailand or other laws and such business is specified in List Two or List Three annexed hereto, the foreigner shall notify the Director-General to obtain a certificate. When the Director-General or the entrusted competent official has examined the validity of the investment promotion certificate or written permit, the Director-General shall issue a certificate without delay but no later than thirty days from the date of receipt of the notification of the acquisition of the investment promotion certificate or written permit. In this case, the foreigner shall be exempt from the application of this Act, except for Sections 21, 22, 39, 40, and 43.
In cases where the foreigner is granted a certificate for business operations under the preceding paragraph, the foreigner shall comply with the conditions prescribed in the Ministerial Regulation on investment promotion and written permits granted by the relevant agency.
Section 13. The provisions of this Act shall not apply to business operations:
(1) of a juristic person registered in Thailand prior to the date of the entry into force of this Act, unless such juristic person ceases operations or substantially amends its scope of business operations or its investment in a new business;
(2) of a juristic person registered in Thailand whose scope of business is deemed to be related to the purpose of this Act.
The provisions of paragraph one shall apply mutatis mutandis to partnerships and joint ventures.
Section 14. For the purpose of enforcing this Act, the Director-General or the competent official appointed by the Director-General shall have the power to enter the premises, business locations, or areas of business operations, including places where documents or evidences are kept, to inspect, examine, and investigate. In this connection, the Director-General or the competent official shall also have the power to order that such documents or evidence be submitted or produced for examination.
Section 15. Foreigners operating businesses in violation of the provisions of this Act shall be subject to the revocation of their licences or certificates by the Director-General or the competent official in accordance with the rules and procedures prescribed in the Ministerial Regulation.
Section 16. Foreigners obtaining licences or certificates shall have the duty to comply with the provisions of this Act and relevant Ministerial Regulations.
Section 17. Foreigners operating businesses under this Act shall not be deemed as engaging in businesses requiring licences or certificates under other laws unless expressly provided otherwise.
Section 18. Foreigners operating businesses under this Act shall comply with the provisions of this Act and relevant Ministerial Regulations and shall be subject to the payment of fees, levies, or other payments as prescribed in the Ministerial Regulations.
Section 19. Any person who violates the provisions of this Act or relevant Ministerial Regulations shall be subject to penalties as prescribed in the Ministerial Regulations.
Section 20. Any person aggrieved by the Director-General’s refusal to grant permission or by any order under this Act has the right to appeal to the Minister. The Minister shall make a final decision on such appeals within thirty days from the date of receipt of the appeal.
Section 21. Foreigners operating businesses without a licence or certificate as required by this Act shall be subject to penalties as prescribed by this Act and relevant Ministerial Regulations.
Section 22. Any person who commits an offense under this Act shall be subject to penalties as prescribed in the Ministerial Regulations.
Section 23. This Act shall be enforced by the Minister of Commerce and the Director-General of the Department of Business Development.
Section 24. The provisions of this Act shall apply to all businesses operated by foreigners in the Kingdom, except for those specifically exempted by other laws or international treaties to which Thailand is a party.
Section 25. In addition to vacating office at the expiration of the term under Section 24, a qualified member vacates office upon:
(1) death;
(2) resignation;
(3) being removed by the Minister on the grounds of disgraceful behavior, lack of integrity, neglect of duties, or deficient capability;
(4) bankruptcy;
(5) being declared incompetent or quasi-incompetent;
(6) being imprisoned by a final judgment, except for an offense committed through negligence or a petty offense;
(7) being disqualified or under any prohibition under Section 23, paragraph two.
Section 26. The Commission has the powers and duties as prescribed in this Act and shall have the following powers and duties:
(1) to give advice, make recommendations, or provide opinions to the Minister on the issuance of Royal Decrees and Ministerial Regulations under this Act, or the prescription of categories of businesses and localities for businesses to be operated by foreigners under Section 7, or requests for the Council of Ministers’ approval under Section 8(2);
(2) to study, gather, and prepare reports on the operation of businesses by foreigners in the Kingdom, including the impacts and appropriateness of such matters, for submission to the Minister from time to time, but no less than once a year;
(3) to give advice, make recommendations, or provide opinions to the Minister on other matters as entrusted by the Minister.
Section 27. At a meeting of the Commission, the presence of not less than one-half of the total number of members is required to constitute a quorum. If the Chairperson is not present at the meeting or is unable to perform the duties, the members present shall elect one among themselves to preside over the meeting.
A decision of a meeting shall be by a majority of votes. Each member shall have one vote. In the case of a tie, the person presiding over the meeting shall have an additional vote as a casting vote.
Section 28. The Commission has the power to appoint a sub-committee for considering or performing any particular act entrusted by the Commission. Section 27 shall apply to meetings of a sub-committee mutatis mutandis.
Section 29. The Department of Business Development, Ministry of Commerce, shall serve as the secretariat of the Commission and shall have the following powers and duties:
(1) to perform tasks in accordance with resolutions of the Commission or as entrusted by the Commission;
(2) to consider and propose opinions to the Commission regarding the operation of foreign businesses in the Kingdom for educational purposes and to gather information and prepare reports for submission to the Minister;
(3) to perform general administrative work of the Commission.
Section 30. The Registrar and competent officials have the following powers:
(1) to address written inquiries or summons requiring any person to provide explanations on any facts and furnish documents or evidence necessary for factual examination;
(2) to enter premises where foreigners operate businesses during office hours for examining and ensuring compliance with this Act, provided that written consent of the Director-General is first obtained, except in cases of utmost emergency; in performing such duties, the Registrar and competent officials shall have the power to inquire into any facts or summon any documents or evidence essential for factual examination from persons present at such premises.
In performing duties under (2), the owner or occupier of the premises shall provide reasonable assistance to the Registrar or competent officials. The Registrar or competent officials must not carry out any act tantamount to a threat or a search under the Criminal Procedure Code and must provide not less than three working days’ prior written notice to the owner or occupier of the premises, except in cases of utmost emergency. Upon completion of their duties, they must provide the Minister with a written report on the outcome without delay.
Section 31. When a person requests an examination or reproduction of documents or requests the Registrar to reproduce or make photocopies of documents with certification or issue certification of statements retained by the Registrar, the Registrar shall grant permission without delay, except where such documents are subject to non-disclosure under the law on official information or other laws. The requester must pay fees as prescribed in the Ministerial Regulation.
Section 32. The competent official must have an identification card in the form prescribed in the Ministerial Regulation. In performing duties, the competent official must show the identification card to the persons concerned.
Section 33. In performing duties under this Act, members, the Director-General, the Registrar, and competent officials shall be considered officials under the Penal Code.
Section 34. Any foreigner to whom a license or certificate has been granted who continues to operate the business after the license has been suspended or revoked or after the operation of the business to which the certificate relates has been ordered to cease without right to appeal or after the Minister has given a final decision mandating the suspension or revocation of the license or the cessation of the operation of the business shall be liable to imprisonment for a term not exceeding three years or a fine of one hundred thousand Baht to one million Baht, or both, along with an additional fine at the daily rate of ten thousand Baht throughout the period of the violation.
Section 35. Any foreigner to whom a license has been granted for the operation of any business under this Act, who participates in the operation of another foreigner’s business not permitted to operate under this Act or operates a business in which such other foreigner is a co-owner, presenting it as the former’s sole business to enable the other foreigner to circumvent or violate provisions of this Act, shall be liable to imprisonment for a term not exceeding three years or a fine of one hundred thousand Baht to one million Baht, or both. The Court shall order the cessation of such business participation or operation. In the case of violation of the Court’s order, the violator shall be liable to a fine at the daily rate of ten thousand Baht to fifty thousand Baht throughout the period of the violation.
Section 36. A Thai national or a juristic person, not being a foreigner under this Act, who assists in, aids and abets, or participates in the operation of a foreigner’s business specified in the Lists annexed hereto, where such foreigner is not permitted to operate that business, or who operates the business jointly with a foreigner presenting it as the former’s sole business, or who acts as a foreigner’s nominee in holding shares in a partnership, limited company, or any juristic person to enable the foreigner to operate the business in circumvention or violation of the provisions of this Act, or a foreigner who allows such acts to be committed by a Thai national or a juristic person not a foreigner under this Act, shall be liable to imprisonment for a term not exceeding three years or a fine of one hundred thousand Baht to one million Baht, or both. The Court shall order the cessation of the assistance, aiding and abetting, joint operation of the business, or shareholding or partnership as applicable. In the case of violation of the Court’s order, the violator shall be liable to a fine at the daily rate of ten thousand Baht to fifty thousand Baht throughout the period of the violation.
Section 37. Any foreigner who operates a business in violation of Section 6, Section 7, or Section 8 shall be liable to imprisonment for a term not exceeding three years or a fine of one hundred thousand Baht to one million Baht, or both. The Court shall order the cessation of the business operation, the cessation of the undertaking, or the cessation of shareholding or partnership as applicable. In the case of violation of the Court’s order, the violator shall be liable to a fine at the daily rate of ten thousand Baht to fifty thousand Baht throughout the period of the violation.
Section 38. Any foreigner who operates a business in violation of Section 14 or violates the conditions under Section 18(3) shall be liable to a fine of one hundred thousand Baht to one million Baht and an additional fine at the daily rate of ten thousand Baht to fifty thousand Baht throughout the period of the violation.
Section 39. Any license grantee or certificate grantee who fails to comply with Section 21, paragraph two or three, or violates Section 22 shall be liable to a fine not exceeding five thousand Baht.
Section 40. Any person who fails to comply with a written inquiry or summons from the Registrar or the competent official, or fails to provide facts or furnish documents or evidence when so inquired or summoned by the Registrar or the competent official for the purpose of examination, or fails to provide assistance to the Registrar or the competent official under Section 30 without reasonable cause, shall be liable to a fine not exceeding five thousand Baht.
Section 41. In cases where a juristic person commits offenses under Section 34, Section 35, Section 36, or Section 37, directors, partners, or persons with the authority to represent the juristic person, who connive at the commission of such offenses or fail to take reasonable action to prevent them, shall be liable to imprisonment for a term not exceeding three years or a fine of one hundred thousand Baht to one million Baht, or both.
Section 42. In the case of offenses under Section 39 and Section 40, the Director-General or a person entrusted by the Director-General shall have the power to settle the offenses by way of payment of a fine. Upon payment by the alleged offender of the fine amount ordered by the Director-General or the person entrusted by the Director-General within thirty days from the date of the settlement, the case shall be deemed terminated by such settlement.
Section 43. All Royal Decrees, Ministerial Regulations, Notifications, and Orders in force on the date of the entry into force of this Act shall remain in force insofar as they are not contrary to or inconsistent with the provisions of this Act until Royal Decrees, Ministerial Regulations, Notifications, and Orders issued under this Act come into force.
Section 44. Foreigners who have acquired the right or have been permitted to operate businesses under the Notification of the National Executive Council No. 281, dated 24th November B.E. 2515 (1972), prior to the date of the entry into force of this Act shall continue to enjoy the right or be permitted to operate such businesses in accordance with the conditions and term of the rights or permission so acquired.
Section 45. Foreigners who, on the date of the entry into force of this Act, have operated businesses specified in the Lists annexed hereto but not specified in the Lists annexed to the Notification of the National Executive Council No. 281, dated 24th November B.E. 2515 (1972), shall, if they intend to continue the operation of such businesses, notify the Director-General to obtain a certificate in accordance with the rules and procedures prescribed in Section 11 within one year from the date of the entry into force of this Act. During the period in which the certificate has not yet been obtained, such foreigners shall not be deemed to be operating the businesses without permission under this Act.
Section 46. The Minister of Commerce shall have charge and control of the execution of this Act and shall have the power to appoint the Registrar and competent officials and issue Ministerial Regulations prescribing fees not exceeding the rate annexed hereto, exempting fees, and prescribing other acts for the execution of this Act. Such Ministerial Regulations shall come into force upon their publication in the Government Gazette.
Countersigned by:
Chuan Leekpai
Prime Minister
The English language translation is provided for research and educational purposes only.
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