By Piyaporn, Corporate Legal Manager, Kreston Thailand
Thailand is asking and the answer may affect more companies than you think
What actually makes a company “foreign” under Thai law?
It sounds simple. And most of the time, it is. But the Department of Business Development (DBD) is currently asking the public for opinions on possible changes to the Foreign Business Act B.E. 2542 (1999) and some of what is being proposed could quietly change how that question gets answered for a lot of businesses already operating here.
The consultation is open until 30 April 2026. I’ve been working on FBL applications, share structures, and company registrations in Thailand for a while now, and a few things in this survey caught my attention. These are just my observations not conclusions but I think they’re worth sharing.
First, a quick reminder of how the current rule works
Under the FBA, a company is “foreign” if more than half its shares are held by non-Thai people or entities. That threshold is the starting point for almost every structural conversation I have with clients: Does this company need a foreign business license? Should we look at BOI promotion instead? What about Treaty of Amity protection? Are the planned business activities even on the restricted list?
These aren’t just paperwork questions. The answers shape how a company is built, and that structure tends to stay with the business for a long time.
What’s being proposed and why it matters
The survey asks whether the definition of “foreigner” should be expanded to cover more situations. Three of them stood out to me.
The first is whether having a non-Thai director on the board should be enough to classify a company as foreign. I understand the instinct behind this, but it doesn’t quite fit how companies actually work. Directors are there to make decisions in the best interest of the business their nationality isn’t really the point. A lot of Thai companies bring in foreign directors for their expertise or international networks, and that’s a good thing. Linking “foreign” status to board composition would be a pretty big shift from how corporate law has worked up to now.
The second is about preferential voting rights. The proposal asks whether a foreign shareholder who holds less than half the shares but has voting rights that punch above that weight should push the company into foreign territory. The concern makes sense in theory, but in practice it would conflict with existing rules on share classes and investor rights. Structures like this are normal in many countries, and flagging them as problematic here could put off perfectly legitimate investors.
The third is about complex cross-shareholding structures cases where you can’t easily trace who ultimately owns what. The proposal suggests these companies might be presumed foreign, or at least face closer scrutiny. My honest reaction when reading this was: who is going to do that analysis? Under what rules? With what authority? Without clear answers, this creates a lot of compliance uncertainty without actually giving regulators a workable tool to enforce anything.
The restricted business list a conversation that’s been waiting
The consultation also asks whether the types of business in Annex 3 of the FBA still make sense today. This is a separate question, but just as important.
The FBA was written in 1999. A lot has changed. To be fair, the rules haven’t been completely frozen ministerial regulations have been issued over the years to open up certain activities. The most recent one, Ministerial Regulation No. 4 B.E. 2562 (2019), added an exemption for some service businesses including domestic lending, office leasing with utilities, and consultancy in management, marketing, HR, and IT as long as those services are between related companies meeting certain shareholding or director thresholds.
That was 2019. There is reportedly another draft regulation in the works that would go further adding businesses like futures trading agents, telecommunications services, and software development to the exempt list. But as of today, it’s still a draft. Not enacted. Not in force.
That gap is worth paying attention to. If the government has already identified more businesses that don’t need to be restricted enough to draft a regulation about it it’s fair to ask: what’s taking so long? This consultation might be the right moment to raise that question directly.
A real example that stuck with me
A few years ago, back in early 2023, I worked on an FBL application for a software development company. I moved on from that role not long after, but stayed in touch with the client. Recently, in passing conversation, I found out their application still hasn’t been approved it’s still sitting in the process. I don’t know exactly what’s causing the delay. But that’s almost the point.
Software development is the kind of business where you need to move fast. You have teams to hire, projects to deliver, clients waiting. And yet here is a company that has been holding an open FBL application for over two years, with investment committed, costs running, and no certainty on when or whether approval comes.
If software development were on the exempt list, this company wouldn’t have needed to apply at all. That’s not a small thing. Think about what that waiting period costs: legal fees, compliance overhead, and most of all, the opportunity cost of capital sitting tied to an uncertain timeline. For a growing tech business, two years is a long time to operate under that kind of uncertainty.
This is exactly why the question of updating Annex 3 matters in practice not just in principle.
Why I think it’s worth responding
To be clear, I’m not saying the FBA shouldn’t change, or that any specific outcome is the right one. That’s for policymakers and the public to work out, and that’s exactly what this process is for.
What I do think is that the people with the most useful things to say here are the ones dealing with this law every day: companies holding FBL or BOI licenses, executives running Thai entities as part of a regional group, and the lawyers, accountants, and advisors who help clients navigate all of this.
If the proposed changes go through, they won’t just affect new companies coming in. They could reach businesses that are already here, already compliant, and never expected to have to rethink their structure. That’s a good reason to engage now, even if it’s just to put your perspective on record.
The survey closes 30 April 2026
The DBD’s questionnaire is open now, here ข้อมูลการรับฟัง. If this touches your business or your clients’ businesses it’s worth a look.
A more detailed article on the legal substance is on the way. In the meantime, if you’re wondering how any of this might affect your current setup in Thailand, feel free to get in touch.
Piyaporn is Corporate Legal Manager at Kreston Thailand, specialising in company establishment, BOI applications, foreign business licences, and visa and work permit matters.
Contact us to discuss your specific situation.