Thailand’s foreign business act: Liberalization continues?

Foreign investors may find doing business in Thailand easier if proposed ministerial regulations come into effect. Two exciting points to note regarding exemptions from the foreign business licence requirement are:

• Earlier this year, ministerial regulations liberalized commercial banking from the requirement to obtain a foreign business licence. Following on from those regulations, commercial banks and asset management companies – which currently offer certain services relating to, or necessary for, operating commercial banking business and asset management business – may enjoy further exemptions from the requirement to obtain a foreign business licence.

• Representative offices and business operators that are contracted to provide services to government agencies or state-owned enterprises no longer require a foreign business licence. This is the first time the Ministry of Commerce (MOC) has attempted to liberalize these businesses.

Approved by cabinet on 12 July 2016, the draft regulations seek to liberalize by way of exempting the following two groups of businesses from schedule 3 of the Foreign Business Act, thereby removing the requirement to obtain a foreign business licence:

Group 1. Businesses covered by specific laws and requested by specific authorities: the connected businesses of commercial banking.

Group 2. Businesses with limited scope and with no effect on local operators: representative offices, regional offices, business operators who are contracted to provide services to government agencies or state-owned enterprises.