FOREIGN BUSINESS ACT UPDATE | CABINET RESOLUTION 12 MAY 2026

By Piyaporn, Corporate Legal Manager, Kreston Thailand

Nine Business Types Removed from Thailand’s Foreign Business Act:

What Foreign Companies Need to Do Now

Every week in May, I had the same conversation with a client. They had seen the news about the Cabinet resolution on 12 May, they had read a few summaries online, and they wanted to know whether they still needed their Foreign Business License. My answer in every case was the same: it depends on which category you are in, and the gazette has not been published yet. Do not restructure anything until it is.

Here is what the change actually means, who it affects, and what you should be doing right now.

What the Cabinet Actually Approved

The Cabinet approved two separate draft instruments on 12 May 2026. The first is a Draft Ministerial Regulation that covers eight of the nine business categories. The second is a Draft Royal Decree that covers the ninth agricultural forward trading which requires a separate legislative path including Royal Assent before it can take effect.

Neither instrument is in force yet. Both have been referred to the Council of State for legal review. The Ministerial Regulation covering categories one through eight is expected to be gazetted within one to three months. The Royal Decree for category nine will take two to four months. Until the gazette is published, the existing FBA licensing requirements remain in place.

The Foreign Business Act has governed what foreign companies can and cannot do in Thailand since 1999. List 3 of that Act covers service businesses it is broadly drafted and has historically captured a wide range of foreign business activity, requiring either a Foreign Business Licence or a structure that avoids the restriction, such as BOI promotion or a Treaty of Amity arrangement. The Cabinet’s action removes nine specific categories from that restriction. It does not open the Thai market broadly. Each exemption is narrow and conditional.

The Nine Categories

The nine categories fall into three groups, and the group determines how the exemption works in practice.

What This Means in Practice

The most important thing I tell clients is that removing a business from the FBA does not reduce your regulatory obligations. It removes one layer the DBD license but you land directly under the sector regulator instead. The NBTC, the Bank of Thailand, and the SEC are not lighter regulators. They carry capital requirements, fit-and-proper assessments, and ongoing reporting obligations. Your compliance workload does not go down. It shifts.

For companies already holding an FBL in one of these categories: the license does not automatically lapse when the regulations take effect. You will need to assess whether to formally surrender it, and whether the sector regulator requires you to notify or register under their own framework. The DBD will likely issue transition guidance. Do not assume the process is automatic.

For companies considering new market entry: the FBA barrier has been removed for these categories, but the sector-regulator license must now be your first step. For telecoms, note that the exemption applies only to Type 1 license holders operators that do not own their own infrastructure. Type 2 and Type 3 operators remain subject to the FBA.

The Intra-Group Picture Has Expanded But Read It Carefully

For multinationals with Thai subsidiaries, categories 6 and 7 are the most significant part of this change. When read together with Ministerial Regulation No. 4 issued in 2019, the cumulative list of intra-group services now exempt from the FBL requirement includes:

• Intra-group lending services (2019)
• Office space rental with utilities for related companies (2019 factory buildings expressly excluded)
• Specialized management consulting in marketing, HR, and IT for related companies (2019)
• General administration and back-office services for related companies (newly added, 2026 draft)
• Domestic debt guarantee services for related companies (newly added, 2026 draft)

For regional shared-service centres and holding-company structures, this is a meaningful development. Activities that previously required an FBL or a BOI promotion may no longer need that license provided the intra-group condition is clearly satisfied and documented.

One important caveat: the final gazette text for categories 6 and 7 has not been published. Some legal commentators have noted that it is not yet confirmed whether the 2026 draft will restrict these exemptions to intra-group services only, as the 2019 regulation did, or whether they will apply more broadly. Do not restructure based on the wider reading until the gazette confirms it.

The exemptions listed are exhaustive, not illustrative. Services such as quality control, raw material procurement, or product R&D are not named and remain fully subject to the FBA. If it is not listed, it is not exempt.

What to Do and When

A Note from Piyaporn

The Foreign Business Act is usually one of the first questions a foreign investor asks about Thailand. This Cabinet resolution does not answer that question once and for all but it does change the shape of it.

What I see happening with clients right now is two mistakes. The first is over-reading the change assuming the market is open and beginning to restructure before the regulations are in force. The second is under-reading it filing this away as a future issue and missing the window to act. The right position is in between: understand which category applies to you, monitor the gazette, and have a clear action plan ready so you can move quickly when the effective date is confirmed.

If any of the nine categories touches your existing or planned Thai operations, contact us now. The planning window is open. It will not stay open once the gazette is published.The planning window is open. It will not stay open once the gazette is published.