Foreign Investment Restrictions across ASEAN: An Overview of the Region’s “Negative Lists” – Part Two

Posted by Reading Time: 5 minutes

By: Dezan Shira & Associates
Editor: Steven Elsinga

This is the second installment in the series on FDI restrictions in ASEAN. Please click here to read Part One.

The legal regime on foreign investment restrictions differs strongly among the ASEAN member states. Some nations, such as the Philippines or Indonesia, use the model of a Negative List that details which sectors are closed, and which ones have equity caps. China too, follows this model.


Vietnam for example is different in that it spreads restrictions over various legal instruments, and marks sectors where foreign investment is ‘conditional’. Here, an investment project by a foreign party will require the investor to meet additional conditions set by the Vietnamese government in order to go ahead with the individual project. In addition, as part of its WTO agreement, Vietnam imposes foreign equity caps in certain industries, often with a timeline for abolition. Click here to read more about foreign investment restrictions in Vietnam at our dedicated Vietnam portal.


Thailand maintains a sort of Negative List too, but it works slightly differently. Here, a company is deemed foreign-owned if non-Thai individuals or entities own more than half of its shares. The Foreign Business Act then provides three Lists, each with sectors where foreign ownership of half the equity or more is not allowed, barring prior approval granted by the Thai government.

Professional Service_CB icons_2015 RELATED: Pre-Investment Services from Dezan Shira & Associates

List One does not allow, in the narrow sense, any foreign majority ownership for what are termed Special Reasons. The industries listed are:

  • Press, radio and television
  • Rice farming, plantation or crop growing
  • Livestock husbandry
  • Logging
  • Fishery
  • Thai medicinal herbs
  • Trading and auctioning Thai historical antiques
  • Producing Buddha images or monks’ alms bowls
  • Trading land

List Two limits foreign investment for reasons of national security and the protection of Thai culture and tradition, and the environment. However, the investor can be exempted from the prohibition by applying for a Foreign Business License, with the Ministry of Commerce. The Thai Cabinet needs to approve the license. In such a case, 40 percent of the capital still needs to be held by Thai. In exceptional cases, the Cabinet can reduce this to 25 percent.

  • Producing firearms, explosives and other warfare related materials
  • Domestic air, land and water transport
  • Trading and producing Thai handicrafts, Thai silk production, Thai musical instruments, Thai cultural porcelain, lacquer ware, silverware, gold ware etc.
  • Woodcarving
  • Extracting sugar from sugar cane
  • Salt farming and the production of rock salt
  • Mining
  • Timber processing for furniture and utensils

List Three provides a number of industries where the government intends to shield nationals from foreign competition. Here, an exemption can be requested from the Director-General of Commercial Registration Department at the Ministry of Commerce. The Foreign Business Committee needs to approve the application.

  1. Rice flour production and milling
  2. Hatching and raising aquatic animals
  3. Forestry from a grown forest
  4. Production of plywood, veneer wood, chipboards or hardboards
  5. Lime production
  6. Accounting, legal, architecture and engineering services
  7. Construction, with exceptions
  8. Brokerage (except: securities, financial products and agricultural futures)
  9. Auctioning, with exceptions
  10. Domestic trade in agricultural products
  11. Retail and wholesale below a certain minimum capital
  12. Advertising
  13. Hotels
  14. Guided tours
  15. Sale of food and beverage
  16. Development of plant varieties

Foreign investment in sectors from Lists Two and Three can be allowed under investment promotion schemes.


Singapore’s investment climate is generally very open to foreign investors. That said, in certain sectors that are key to national interest, a distinction between foreign and local investors is made.

Under the Broadcasting Act, foreign entities in the aggregate may not own over 49 percent of a company that has a license to broadcast to a domestic audience. The Newspaper and Printing Presses Act restricts the ownership of shares in newspaper companies to 5 percent per investors, foreign or local. Also, the directors of these companies need to be Singaporean citizens, or government approved corporations. 

To provide domestic retail banking services, a special licensing scheme is in place for foreign banks, with requirements that do not apply for local banks.

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Brunei generally does not distinguish between foreign and local investors.

The production of liquor and weapons (firearms, explosives) is prohibited. In sectors that affect national food safety or use local natural resources, 30 percent of equity needs to be held by Bruneians. Also, the government has designated industrial sites where 30 percent local shareholding is required.

To learn more about investment opportunities in the island sultanate, as well as about negative lists region wide, and how investors may overcome them, please consult further with the experts are Dezan Shira & Associates.


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

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