Category Three businesses are treated in a manner similar to those in Category Two except that the power to grant an Alien Business License to foreigners who wish to start a new business is vested with the Director General and a committee.

Moreover, although businesses in Category Three may be open to foreigners (subject to ministerial regulation), the authorities have observed a policy of issuing no new licenses to such incoming businesses unless they are convinced that these activities could not be competently conducted by firms in which the majority ownership is Thai.

A company with an alien business licenses may be sold to foreigners who then may continue with the use of the company’s alien business license. Generally, transfers are permitted but due care and caution should be used to examine the details of the license to see whether restrictions may apply.

Definition of "Foreigner" A business is considered " foreigner" if: (1) it is established under foreign law; or (2) half or more of its capital is owned by foreigners even if the company is incorporated under Thai law, or (3)half or more of the value of the total capital being invested by foreigners even if more than half the capital is owned by Thai nationals. (The third requirement is effectively a bar on the use of Thai national as nominees.)

Under the earlier Alien Business Law there was a requirement that both the shareholding and the shareholders be predominantly Thai for the company to qualify as Thai. So for example, in companies with seven shareholders (7 is the minimum number of shareholders for a limited company) in order to be considered Thai, at least four of the shareholders must be Thai and the Thai shareholders must own more than 50% of the shares. This requirement of majority Thai shareholders is not present in the current Foreign Business Law.

New Alien Business Licenses Foreign businesses seeking to engage in a Category Two business may apply for an Alien Business License provided that approval has been granted by the Minister and Cabinet. Foreign businesses may apply to operate businesses in Category Three provided that they have permission for the Director-General with approval of the Committee.

Representative Offices established in accordance with Ministry of Commerce regulations and other types of business such as petroleum service companies and those engaged in activities involving high technology routinely apply for licenses.

 

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