Thailand’s Foreign Business Act Reform Reduces Licensing Barriers for Selected Foreign Investors

Thailand’s Cabinet approved in principle two draft legal instruments on May 12, 2026, that would remove Foreign Business License requirements for nine categories of business activities previously regulated under the Foreign Business Act.

Find Business Support

Contact Dezan Shira & Associates for guidance on Thailand market entry and Foreign Business Act compliance

Once implemented, qualifying foreign companies operating in sectors already supervised by regulators such as the Bank of Thailand, Securities and Exchange Commission, National Broadcasting and Telecommunications Commission, and Energy Ministry may no longer require separate approval from the Department of Business Development before commencing operations in Thailand.

Which foreign-invested activities will be exempted?

The reforms exempt nine categories of business activities from Foreign Business License requirements, primarily involving sectors already regulated by specialist authorities or activities considered operationally low-risk under the Foreign Business Act framework. The exempted activities include:

1. Businesses regulated by the Bank of Thailand
2. Businesses regulated by the Securities and Exchange Commission
3. Businesses regulated by the National Broadcasting and Telecommunications Commission
4. Businesses regulated by the Energy Ministry
5. Agricultural futures trading activities
6. Intra-group services are provided exclusively to affiliated companies
7. Machine-space leasing arrangements for employee welfare purposes
8. Petroleum drilling and related energy-support services
9. Additional qualifying activities specified under the draft ministerial regulation and royal decree

For foreign investors already subject to prudential supervision, operational licensing, capital controls, or industry-specific compliance obligations, the reforms may eliminate one of the most commercially unpredictable stages of the Thailand entry process.

The inclusion of petroleum drilling-related services and employee-use leasing arrangements carries operational significance for industrial operators, infrastructure projects, and energy-sector investors whose construction schedules, contractor mobilization, and equipment deployment timelines can be disrupted by licensing delays during early-stage project execution.

How the reform changes Thailand’s market-entry economics

The most immediate commercial consequence of the reforms is the reduction of regulatory duplication between the Department of Business Development and sector-specific regulators. Foreign investors previously required to secure both Foreign Business Licenses and industry approvals often faced with inconsistent review standards, extended processing periods, and uncertainty over whether operational activities would ultimately qualify under Foreign Business Act exemptions. Foreign Business License approvals in Thailand can take several months, depending on business activity, ownership structure, and inter-agency review requirements, making licensing uncertainty a major execution consideration for foreign investors entering restricted sectors.

Find Business Support

Speak with Dezan Shira & Associates about Thailand licensing, BOI incentives, and foreign investment structuring

The reforms may also reduce dependence on the Board of Investment promotion structures for certain service-oriented activities. Foreign companies entering Thailand have frequently relied on BOI incentives not only for tax benefits, but also to obtain operational certainty under the Foreign Business Act framework. Businesses qualifying under the new exemptions may now be able to enter selected sectors without relying on more restrictive investment promotion conditions or multi-agency approval sequencing.

The exemption for intra-group services may further affect how multinational groups structure Thailand-based affiliate operations. Shared services, management support, technology coordination, and regional operational functions have historically created Foreign Business Act exposure even where services were provided exclusively within the same corporate group. Removing FBL requirements for qualifying intra-group activities may therefore reduce structuring complexity for multinational groups centralizing affiliate support functions through Thailand.

Sector restrictions and ownership controls remain

The reforms do not remove Thailand’s broader foreign ownership restrictions. Restricted activities under List 1, List 2, and non-exempt List 3 categories of the Foreign Business Act remain subject to existing foreign participation controls. Businesses operating outside the exempted activities may still require Foreign Business Licenses, Foreign Business Certificates, or sector-specific approvals, depending on their ownership structures and commercial activities.

Foreign investors must also continue complying with sector-level regulations independent from the Foreign Business Act. Financial institutions, telecommunications operators, securities businesses, and energy-sector companies remain subject to licensing, capital adequacy, operational supervision, and ongoing compliance obligations imposed by their respective regulators.

Find Business Support

Reach out to Dezan Shira & Associates for support with Thailand business setup and regulatory strategy

Thailand also continues to increase scrutiny of nominee arrangements and artificial ownership structures used to circumvent foreign ownership restrictions. Thai authorities have repeatedly emphasized that the reforms should not be interpreted as blanket liberalization of foreign-controlled business activities. Foreign investors using nominee-sensitive arrangements may therefore continue facing regulatory exposure even where selected operational activities become exempt from Foreign Business License requirements.

Implementation timing may affect foreign investment planning

The reforms remain subject to legal review and formal publication before taking effect, meaning foreign investors currently preparing Thailand market-entry structures may still need to proceed under the existing Foreign Business Act framework until the exemptions become legally enforceable. Businesses currently preparing Foreign Business License applications, regional service structures, or investments in qualifying sectors may therefore need to evaluate whether proceeding under the existing licensing framework creates unnecessary compliance costs if the exemptions are expected to take effect before commercial operations commence.

• Previous Article How Geopolitical Uncertainty Is Increasing Demand for Malaysian Bonds
• Next Article How Singapore’s Financial Reporting Framework Aligns with IFRS