Foreign Business Act B.E. 2542 (1999)

Reviewed by ThaiLawOnline, a licensed Thai law firm practising in Thailand since 2006. Thai lawyer of record: Wichuda Atthamethakon, LL.M., Thai Bar Licence 3149/2556.

Last updated on September 12, 2026

The Foreign Business Act B.E. 2542 (1999) (พระราชบัญญัติการประกอบธุรกิจของคนต่างด้าว, usually shortened to the FBA, formerly the Alien Business Law) is the statute that decides which businesses a foreigner, or a Thai company that is at least half foreign-owned, may carry on in Thailand and on what terms. It sorts restricted activities into three lists, requires a Foreign Business Licence or Certificate for most of them, and punishes both the foreigner who trades without one and the Thai who lends a name to hide it. It is the reason most foreign-run Thai companies are structured 49/51, and the reason that structure is now being audited.

How the Act defines and restricts foreigners

Section 4 defines a foreigner as a non-Thai individual, a company not registered in Thailand, or a Thai-registered company in which foreigners hold half or more of the shares. A company with 49% foreign capital is therefore Thai for the purposes of the Act, which is where the familiar 49/51 split comes from.

Section 8 and the three lists. List 1 covers businesses closed to foreigners outright, such as newspapers and broadcasting, farming and land trading. List 2 covers national security, culture and natural resources and needs permission from the Minister of Commerce with Cabinet approval. List 3 covers businesses in which Thais are held not yet ready to compete, including most services, and needs a licence from the Director-General of the DBD with the approval of the Foreign Business Committee. Section 14 sets the minimum capital: not less than 2,000,000 baht for a foreigner starting any business, and not less than 3,000,000 baht for each restricted business.

Licence, certificate or treaty in practice

A foreigner who wants majority ownership of a List 2 or List 3 business has three routes. The Foreign Business Licence is a discretionary application that section 17 requires to be decided within 60 days of filing. Only the Cabinet’s consideration of a List 2 business may be extended, by up to a further 60 days and only where there is an inevitable cause, and the licence must then be issued within 15 days of approval. Refusals are common for ordinary services. The Foreign Business Certificate is issued almost automatically, within 30 days, to a company promoted by the BOI or protected by a treaty, and under the Treaty of Amity that means American-owned companies. The third route is to fall outside the Act altogether by keeping foreign shareholding below half, which is lawful only if the Thai shareholders are real investors.

List 1 has no licence route at all. That is why no structure lets a foreigner trade land, and why a company that buys land for a foreigner’s use is examined under both this Act and the Land Code.

Penalties and the nominee problem

Sections 36 and 37 carry the criminal sanctions: imprisonment of up to 3 years, a fine of 100,000 to 1,000,000 baht, or both, and the court must order the business stopped or the shareholding unwound, with a further fine of 10,000 to 50,000 baht for every day that court order is defied. Section 36 is aimed at the Thai who holds shares or fronts a business for a foreigner; the foreign principal is punished with the same penalties.

Enforcement has moved from theory to practice. DBD Order 2/2569, in force from 1 August 2026, requires Thai shareholders in mixed companies to prove with bank statements that they paid for their own shares, and the 2026 nominee crackdown has produced arrests, seizures of land and dissolved companies. A 49/51 company whose Thai partners contributed nothing is not a grey area under this Act; it is the offence the Act was written to catch.

Frequently asked questions

See also: Foreign Business Licence, BOI, Treaty of Amity, Nominee, the Foreign Business Act guide and setting up a company in Thailand as a foreigner.

Last reviewed: 12 September 2026. The statutory statements above were read in Thai against the consolidated text of the Foreign Business Act B.E. 2542 (1999): section 4 for the definition of a foreigner and the half-or-more share test, section 8 and the annexed Lists for the three Lists and for who permits a List 2 and a List 3 business, section 14 for the minimum capital, section 17 for the 60 day decision, the Cabinet-only extension and the 15 day issuance, and sections 36 and 37 for the penalties and for the daily fine that falls due only when the court order to cease is defied. DBD Order 2/2569, in force 1 August 2026, was read from the Department of Business Development scan. Not verified in this review: the 2026 enforcement account of arrests, land seizures and dissolved companies, and the statement that refusals are common for ordinary services.