The Ministry of Commerce has issued a ministerial regulation removing certain businesses from the category of restricted business activities under the Foreign Business Act ("FBA"), effective from 9 June 2017.
The exempted businesses can be divided into two groups, as follows:
- Group 1
Businesses governed by the laws on financial institutions such as financial institution businesses; connected businesses or necessary businesses for financial institutions; other businesses of financial institutions; and businesses of companies within the financial business group of financial institutions.
- Group 2
Businesses covered by specific laws such as asset management businesses; representative offices; regional offices; and business operators who are contracted to provide services to government agencies or state-owned enterprises.
Group of Business 1. Businesses governed by the laws on financial institutions
Scope of Business Activity
The following 14 businesses are financial institution businesses and related or necessary businesses for operating financial institution business; other businesses of financial institution; and businesses of companies within the financial group of financial institution:
1. operating commercial banking business;
2. operating business as a representative office of foreign bank;
3. providing Shariah banking services;
4. acting as a banking agent;
5. providing escrow account and escrow agent service;
6. operating private repurchase (private repo) transactions business;
7. acting as an agent in accepting insurance applications and collecting insurance premiums or fees of export guarantee and loan guarantee to clients;
8. providing financial services to financial institutions, companies within the financial group, the Bank of Thailand, and government entities;
9. renting immovable properties;
10. purchasing or accepting the transfer of debtors under the loan transactions;
11. providing cash management service;
12. providing document preparation service relating to the clients' businesses;
13. acting as an agent in receiving payments (collection agent) or accepting applications; and
14. operating hire-purchase and leasing business.
Group of Business 2. Businesses covered by specific laws
Scope of Business Activity
Business covered by specific laws are:
1. asset management businesses governed by the law on asset management companies;
2. service businesses as a representative office of a foreign juristic person in relation to an international trading business, according to the Regulations of the Office of the Prime Minister Concerning the Establishment of the Visa and Work Permit Center B.E. 2540;
3. service businesses as a regional office of a foreign juristic person in relation to an international trading business, according to the Regulations of the Office of the Prime Minister Concerning the Establishment of the Visa and Work Permit Center B.E. 2540;
4. service business operators who have entered into a contract with government agencies under the law on budget procedures; and 5. service business operators who have entered into a contract with state-owned enterprises under the law on budget procedures.
The exemption of commercial banking business as well as representative offices of foreign banks is not new as they have already been exempted under the previous ministerial regulation. As the above businesses are now exempted from the licensing requirements under the FBA, foreign companies wishing to operate these businesses in Thailand will no longer require a foreign business license. However, the foreign companies will still be subject to licensing requirements and foreign shareholding limit requirements under specific regulations, particularly for those operating businesses under Group 1.
Foreign companies operating Group 2 businesses will not be subject to the foreign business license requirements under the FBA. However, in order to comply with the requirements for preparation and filing of accounts under the Accounting Act, foreign companies operating Group 2 businesses must request a registration number and notify the authority of the place they are operating the businesses in Thailand, pursuant to the Notification of the Department of Business Development.