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EXEMPTION OF SERVICE BUSINESSES FROM FOREIGN BUSINESS PERMISSION

STLO Asia > News & Publications  > EXEMPTION OF SERVICE BUSINESSES FROM FOREIGN BUSINESS PERMISSION

EXEMPTION OF SERVICE BUSINESSES FROM FOREIGN BUSINESS PERMISSION

The Foreign Business Act, B.E. 2542 (1999) (the “FBA”) is the law that governing foreign participation in any business activities in Thailand. The FBA sets the different types of business activities, which foreigners are restricted from participating, unless prior approval is granted from the Ministry of Commerce and obtain a Foreign Business License. 

The restricted activities are divided into three difference levels of the lists of activities, including

List 1: Businesses not permissible to foreigners by special reason,

List 2: Businesses related to national safety or security, businesses having impacts on arts, culture, traditions, customs and folklore handicrafts or businesses having impacts on natural resources or the environment, and

List 3: Businesses that Thai nationals are deemed not yet ready to compete with foreigners, whereas service businesses are types of business activities listed in List 3.
The Ministry of Commerce has issued the Ministerial Regulation prescribing the exemption on certain service businesses from the restricted business activities under List 3 of the FBA. The following service businesses are the exempted activities which are not subject to foreign business permission, therefore, foreigners can engage in without the requirement of obtaining a Foreign Business License:

(1) Securities business and other businesses under the law on securities and exchange:

  1. Securities trading;
  2. Servicing as an investment consultant;
  3. Securities underwriting;
  4. Borrowing and lending securities;
  5. Mutual fund management;
  6. Private fund management;
  7. Venture capital management;
  8. Granting loans for securities business;
  9. Serving as a financial consultant;
  10. Serving as a securities registrar;
  11. Trusteeship of assets of securities companies’ customer or derivatives traders’ customer;
  12. Servicing as a private fund custodian;
  13. Servicing as a mutual fund supervisor; and
  14. Servicing as a debenture holders’ representative.

(2)   Derivatives business under the law on derivatives:
        a. Servicing as a derivatives dealer;
b. Servicing as a derivatives advisor; and
c. Servicing as a derivatives fund manager.

(3) Servicing as a trustee under the law on trust for transactions in capital market.

(4)   Financial institutions businesses, the connected or essential businesses for operating financial institution business, other businesses of financial institutions businesses, and businesses of companies within the financial business group of financial institutions businesses under the law of financial institutions businesses:

  1. Commercial banking business;
  2. Service business as representative offices of banks;
  3. Financial services under the law of Shariah;
  4. Servicing as a representative of the financial institutions;
  5. Service business of accepting deposits of money with withdrawal conditions under customers’ order and fiduciary business;
  6. Private repurchase transactions;
  7. Servicing as a representative to receive the application and charge for insurance premium or service fees of export credit insurance and credit guarantee to customers;
  8. Service business related to financial business to the financial institutions, companies within the financial business group, Bank of Thailand, and the government authorities;
  9. Service business of renting real properties;
  10. Factoring business of loan debtors;
  11. Service business of cash management;
  12. Related service business on documentation of customers’ business;
  13. Service business as a representative of debt collection and receive the application;
  14. Hire purchase and leasing businesses.

(5)   Life insurance business under the law on life insurance.
(6)   Non-life insurance business under the law on non-life insurance.
(7)   Asset management business under the asset management company law.
(8)   Service business as representative offices of foreign companies engaging in the business of international trade under the Regulations of the Office of the Prime Minister on the Establishment of Visa and Work Permit Centers B.E.2540 (1997);
(9)   Service business as regional offices of foreign companies engaging in the business of international trade under the Regulations of the Office of the Prime Minister on the Establishment of Visa and Work Permit Centers B.E.2540 (1997);
(10) Service business that having government agencies as a party under the law of budget procedures;
(11) Service business that having state enterprises as a party under the law of budget procedures.
However, the aforementioned service business are still subject to licensing and foreign shareholding limit requirements under those specific laws and/or regulations prior to operating the service businesses in Thailand.
Copyright © 2017, STLO Asia Ltd., All right reserved.

However, the aforementioned service business are still subject to licensing and foreign shareholding limit requirements under those specific laws and/or regulations prior to operating the service businesses in Thailand.

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