Thailand remains an attractive destination for foreign investors in Southeast Asia. However, incorporating a company in Thailand does not automatically mean that a foreign-owned company is permitted to conduct every type of business, like in other jurisdictions such as Europe or USA.
In 2026, foreign investors seeking to hold more than 49% of the shares, or 100% ownership, in a Thai company must carefully consider the appropriate legal structure and any applicable licenses or approvals, particularly under the Foreign Business Act B.E. 2542 (1999) (FBA).
Nevertheless, Thai law provides several lawful routes for foreign investors to operate businesses in Thailand. These include applying for BOI promotion, obtaining a Foreign Business License (FBL), relying on the U.S.-Thailand Treaty of Amity and Economic Relations or conducting business activities that fall outside the scope of the FBA.
This article, prepared by the corporate lawyers team in Bangkok of Herrera and Partners H&P outlines the key legal options that foreign investors should consider when planning to operate a business in Thailand in 2026.
- BOI Promotion: A Key Route to 100% Foreign Ownership
The Board of Investment (BOI) is one of the key routes available to foreign investors seeking to operate businesses in Thailand with a high level of foreign ownership, including potentially 100% foreign ownership, while also benefiting from a range of investment incentives.
Examples of business activities that may fall within the scope of BOI promotion include:
- Agricultural, food, biotechnology, and medical industries
- Machinery, automotive, electrical appliances, and electronics industries
- Metals and materials, petrochemical, chemical, and public utility industries
- Digital, creative, and high-value service industries
BOI promotion may provide not only tax incentives but also various non-tax incentives, depending on the nature and qualifications of the promoted project.
However, obtaining BOI promotion does not mean that every activity conducted by the company will automatically be permitted. The company must conduct its business within the scope of the activities approved by the BOI and comply with all applicable BOI conditions.
Therefore, investors should carefully assess whether their proposed business activities qualify for BOI promotion before establishing the company and commencing operations.
- Foreign Business License (FBL): An Alternative for Businesses Not Eligible for BOI
If a business does not qualify for BOI promotion, a foreign investor may consider applying for a Foreign Business License (FBL) if the relevant business activity falls under List 3 of the Foreign Business Act and is not a business that is prohibited to foreigners by law.
A foreign investor may apply for an FBL through the procedure prescribed by law. The relevant authorities will consider various factors, including the nature of the business, the proposed business structure, the investment plan, and the potential impact and benefits to the Thai economy.
One of the key benefits of obtaining an FBL is that the company may be permitted to have 100% foreign ownership for the licensed business activity. However, other legal requirements remain applicable, and an FBL does not grant the right to own land in Thailand.
It is important to understand that an FBL is not automatically granted simply because a company has sufficient capital. Approval depends on the nature of the business, the proposed structure, the business plan, and the consideration of the relevant authorities.
In practice, businesses with distinctive, innovative, or highly specialized characteristics may have stronger prospects, particularly where the proposed business offers clear benefits to the Thai economy or provides services that are not widely available in Thailand.
Accordingly, before submitting an FBL application, investors should first ensure that the proposed activities have been properly classified and discussed with the Department of Business Development (DBD).
- U.S.-Thailand Treaty of Amity: An Option for U.S. Investors
For investors who are U.S. nationals, another important route is the U.S.-Thailand Treaty of Amity and Economic Relations (Treaty of Amity).
Subject to the applicable requirements, the Treaty of Amity may allow qualifying U.S. companies to maintain majority or full U.S. ownership in a company established in Thailand and receive national treatment for certain business activities.
In practical terms, qualifying U.S. investors may be able to operate certain businesses on substantially the same basis as Thai companies and may be exempt from a number of foreign investment restrictions under the FBA.
However, the Treaty of Amity does not remove all restrictions. In addition, it does not grant U.S. investors the right to own land in Thailand.
Certain business activities remain subject to restrictions, including:
- Communications and telecommunications activities
- Domestic transportation
- Fiduciary functions
- Banking involving deposit-taking activities
- Exploitation of land or other natural resources
- Domestic trade in indigenous agricultural products
Therefore, U.S. investors should carefully review the proposed business activity before relying on the Treaty of Amity to determine whether the activity falls within the scope of the protection or exemption available under the Treaty.
- Business Activities Outside the Scope of the Foreign Business Act
Another potential route is to conduct a business activity that does not fall within any of the Lists annexed to the Foreign Business Act. A company may generally be established with 100% foreign ownership without having to obtain an FBL solely under the FBA.
However, this does not mean that the company is exempt from all other Thai laws and regulations. Depending on the nature of the business, other sector-specific licenses, registrations, approvals, or regulatory requirements may still apply.
Furthermore, foreign ownership of the company does not create a general right for the company to own land in Thailand.
4.1 Retail or Wholesale Businesses: The THB 100 Million Capital Route
One of the most common questions from foreign investors is whether an FBL is required when they wish to operate a retail or wholesale business in Thailand.
As a general principle, retail and wholesale activities fall under List 3 of the Foreign Business Act and therefore require permission for a foreign-owned company unless an applicable exemption applies.
One important statutory exemption relates to businesses that meet the prescribed paid-up capital requirement of at least THB 100 million.
The key point is that the relevant capital must satisfy the requirements prescribed by law and must be properly paid up.
It should not merely be a nominal registered capital figure stated in the company’s corporate documents.
Therefore, the THB 100 million capital route should not simply be viewed as a “shortcut” for operating a retail or wholesale business. Investors must consider whether the business can genuinely invest and maintain the required capital and whether the proposed business structure satisfies all applicable statutory conditions.
4.2 Establishing a Manufacturing Facility in Thailand and Selling the Products
Another important route for foreign investors is to establish a manufacturing facility in Thailand and manufacture products locally.
The key consideration is whether the company is genuinely manufacturing products in Thailand, rather than simply importing finished products from overseas and selling them in Thailand.
In particular, investors should determine whether the proposed facility is subject to any licensing requirements or other conditions under Thailand’s factory laws. The applicable requirements may differ depending on the nature and scale of the manufacturing operation.
Another important consideration is that the manufacturing activity should not be structured as a Made-to-Order service where the company merely provides services based on individual customer orders.
Where the company genuinely manufactures standardized products in Thailand and sells products from its own production without manufacturing each item specifically pursuant to an individual customer’s order, the structure may be considered as a manufacturing business rather than a service business, subject to the specific facts and applicable regulations.
Which Structure Should a Foreign Investor Choose?
In the experience of our lawyers specialized in Corporate Law and Foreign Investment Law in Thailand at H&P, there is no single legal structure that is suitable for every foreign investor.
The appropriate approach should begin with the actual nature of the proposed business, followed by an assessment of which legal route best fits the business and the rights or benefits the investor wishes to obtain.
The most appropriate structure should therefore be determined based on the actual business activities, the desired ownership structure, investment level, regulatory requirements, and long-term objectives of the investor.
Conclusion
Foreign investors have several lawful options for operating businesses in Thailand in 2026. Depending on the nature of the business, these may include BOI promotion, an FBL, the U.S.-Thailand Treaty of Amity or activities that fall outside the scope of the FBA.
However, the key is not simply to determine how a foreign investor can hold 100% of a Thai company. The more important question is:
“What is the actual nature of the business, and what legal structure allows that business to operate lawfully in Thailand?”
Proper legal structuring at the beginning can help investors minimize risks relating to the Foreign Business Act, foreign ownership restrictions, licensing requirements, land ownership.
If you are uncertain which structure is appropriate for your business, Herrera and Partners has extensive experience advising foreign investors and international businesses on corporate structuring, BOI promotion, foreign business licensing, and regulatory matters in Thailand.
If you are planning to start a business in Thailand and are looking for legal advice on the most appropriate legal structure for your investment in Thailand, please contact our Bangkok law firm at info@herrera-partners.com
