Thai Business Laws You Need to Know

Thailand has long been an attractive destination for foreign investors due to its strategic location, growing economy, and supportive government policies. However, foreigners wishing to do business in Thailand must comply with various laws and regulations to ensure smooth and legal operations. Below is an overview of the key Thai laws relevant to foreign businesses and investors.

1. The Foreign Business Act B.E. 2542 (1999)

Click to Read Full contents of The Foreign Business Act B.E. 2542 (1999)

The Foreign Business Act (FBA) is one of the most important laws for foreigners wanting to invest or operate a business in Thailand. It defines which business activities are restricted or prohibited to foreign ownership. The law categorizes businesses into three lists:

List 1: Businesses that are completely prohibited to foreigners (e.g., farming, forestry, and land trading).
List 2: Businesses allowed only if special permission is granted by the Cabinet (e.g., certain industries impacting national security or culture).
List 3: Businesses allowed if a Foreign Business License (FBL) is obtained (e.g., construction, advertising, and retail).

For many businesses, foreigners are limited to holding a maximum of 49% ownership, unless they obtain specific approvals or qualify for investment promotion.

2. The Civil and Commercial Code (Business Registration)

Click to Read Full Contents of The Civil and Commercial Code (Business Registration)

The Civil and Commercial Code governs the registration of companies in Thailand, including partnerships, limited companies, and public companies. Foreigners can set up businesses under Thai law but are often subject to ownership restrictions under the Foreign Business Act unless they form a joint venture with Thai partners.

3. Investment Promotion Act B.E. 2520 (1977)

Click to Read Full Contents of Investment Promotion Act B.E. 2520 (1977)

To encourage foreign investment, Thailand offers investment incentives under the Board of Investment (BOI). The Investment Promotion Act allows businesses that meet certain criteria—such as using advanced technology, contributing to regional development, or being in priority industries—to benefit from:

Up to 100% foreign ownership.
Tax exemptions.
Streamlined work permit and visa processes.

4. Immigration Act B.E. 2522 (1979)

Foreign investors and employees must comply with Thailand’s Immigration Act, which covers visas and work permits. Foreigners engaging in any work-related activities in Thailand must have a valid Non-Immigrant Visa and apply for a Work Permit, which is regulated under this law.

5. Labor Protection Act B.E. 2541 (1998)

Any business operating in Thailand must comply with the Labor Protection Act, which governs:

Working hours and conditions.
Minimum wage requirements.
Employee welfare and benefits.
Termination and severance regulations.

This law applies equally to companies with foreign ownership.

6. Revenue Code (Taxation)

Foreign-owned businesses are subject to Thai tax laws under the Revenue Code. Key taxes include:

Corporate Income Tax (CIT).
Value Added Tax (VAT).
Withholding Tax.
Personal Income Tax (for foreign directors and employees).

Foreign businesses must register for taxation and submit regular filings.

7. Factory Act B.E. 2535 (1992)

For manufacturing or industrial operations, foreign investors must comply with the Factory Act, which regulates:

Factory licensing.
Environmental and safety standards.
Operational procedures and compliance reporting.

8. Land Code Act B.E. 2497 (1954)

Foreigners are generally prohibited from owning land in Thailand, except in rare cases such as:

BOI-promoted projects.
Certain industrial estates or special economic zones. Most foreign businesses lease land or form joint ventures with Thai nationals to access property.

9. Personal Data Protection Act B.E. 2562 (2019)

If your business handles customer data (especially personal information), you must comply with Thailand’s Personal Data Protection Act (PDPA). This law requires businesses to:

Obtain consent before collecting data.
Ensure secure data storage.
Allow customers to access or delete their data upon request.

10. Special Industry Regulations

Depending on your business type, you may also need to comply with sector-specific laws, such as:

Hotel Act (for hospitality businesses).
Tourism Business and Guide Act (for travel agencies).
Construction Laws and Building Control Act (for construction companies).
Food Act (for food and beverage businesses).

Conclusion

Navigating Thailand’s legal landscape can be complex, especially for foreign investors unfamiliar with local laws and regulations. Whether you are planning to set up a new company, form a joint venture, or acquire an existing business, understanding these key laws is essential for ensuring compliance and long-term success.

If you would like expert assistance in structuring your business legally and efficiently in Thailand, we are here to help.