Commerce Ministry details plan to remove nine businesses from foreign licensing list
Thailand says the move is not a full liberalisation, but a regulatory clean-up to reduce duplicated licensing while keeping sector-specific oversight.
Poonpong Naiyanapakorn, director-general of the Department of Business Development (DBD), has clarified details of the Commerce Ministry’s proposal, approved by the Cabinet, to remove nine business activities from the annex of the Foreign Business Act B.E. 2542 (1999). The move would allow foreign investors to operate in those businesses without having to seek permission from the Commerce Ministry under the Act.
The businesses are divided into three groups.
Group 1: Businesses already governed by specific laws and regulators
The first group covers businesses already supervised by dedicated laws and agencies.
They include telecommunications services under Type 1 telecommunications business licences, in line with the law on telecommunications business; treasury centre businesses under exchange control laws; and various forms of secured lending businesses governed by securities and exchange laws and derivatives laws.
Also included are services as an agent, trader, consultant or fund manager for derivatives contracts where the underlying goods or reference variables are not covered by the Derivatives Act B.E. 2546 (2003).
The group also covers forward trading of agricultural products on a futures exchange, where delivery or receipt of agricultural products takes place at warehouses designated by the futures exchange.
Group 2: Services provided only to affiliated companies
The second group covers services provided only within the same corporate group.
These include administrative management, human resources and information technology services provided to affiliated companies, as well as domestic debt guarantee services for companies within the same group.
Poonpong said these activities are internal services used to manage liquidity and operations within a corporate group, and therefore do not compete with Thai businesses.
Group 3: Other specific businesses
The third group includes the business of leasing part of a space for the installation of electronic devices used in financial services, vending machines, or automated service machines to serve and facilitate company employees.
It also includes petroleum drilling services, which are provided specifically to concessionaires.
Of the nine activities, eight are being proposed through a draft ministerial regulation. The exception is the forward trading of agricultural products on a futures exchange, which falls under Group 1 and will be proposed through a draft royal decree.
Commerce Ministry says this is not full liberalisation
Poonpong said the Cabinet proposal to remove the nine businesses from the annex of the Foreign Business Act should not be seen as opening the market freely to foreigners or allowing them to compete unfairly with Thai businesses.
He said the change is instead a regulatory improvement designed to remove legal duplication and make it easier for legitimate foreign investors to invest in Thailand lawfully.
The aim is to attract investment capital and advanced technology, while helping develop the capacity of Thai workers and businesses so they can compete internationally. He said this is in line with the government’s investment promotion policy.
Even after these businesses are removed from the annex of the Foreign Business Act, foreign investors wishing to set up companies in Thailand must still register with the Department of Business Development under the Commerce Ministry.
They must also continue to seek approval from the relevant sector regulators.
For example, telecommunications businesses must still obtain approval from the National Broadcasting and Telecommunications Commission (NBTC). Treasury centre businesses must still obtain approval from the Bank of Thailand. Securities and derivatives businesses must still seek approval from the Securities and Exchange Commission (SEC), while petroleum drilling businesses must still obtain approval from the Energy Ministry.
The only change is that they will no longer need to seek a separate foreign business licence from the Commerce Ministry under the Foreign Business Act.
Poonpong said this would greatly reduce duplicated approval procedures and help strengthen Thailand’s competitiveness.
National interest remains the priority
The Commerce Ministry insisted that the proposal has been made with the national interest as the main priority.
It said the government remains focused on protecting Thai operators and business sectors in which Thai companies are not yet ready to compete with foreign firms, so that they are not placed at a disadvantage.
The ministry said the reform would help create a better balance, reduce inequality in doing business, attract more foreign investment into Thailand, and stimulate fair competition. This would also give consumers more choices and better access to quality goods and services.
The ministry added that foreign investors would bring not only capital, but also advanced technology and specialist expertise into Thailand. This could support technology and knowledge transfer to Thai entrepreneurs and employees, helping upgrade specialist skills in the Thai labour force.
It said the change would help Thai businesses develop further and support Thailand’s ambition to become a regional and global hub for services and investment in the future.
At the same time, the ministry said it would continue to step up efforts to prevent and suppress businesses that intentionally avoid the law by using Thai nominees on behalf of foreign nationals.
Government rejects claims of unrestricted market access
Rachada Dhnadirek, spokesperson for the Prime Minister’s Office, on Wednesday clarified reports claiming that the government is allowing foreigners to operate businesses without seeking permission, saying the claim was a misunderstanding of the substance of draft subordinate legislation under the Foreign Business Act 1999.
Rachada said the draft law was not intended to open the door for foreigners to run businesses without supervision. Instead, it updates certain business categories, most of which involve advanced technology or sectors already governed by specific laws and strictly supervised by state agencies.
The aim, she said, is to reduce duplication in approval procedures, make business operations more convenient and bring regulations in line with the modern economic context.
“The government confirms that all economic measures must go hand in hand with protecting the country’s interests, Thai entrepreneurs and economic security. This regulatory update is about improving supervisory efficiency, not liberalising without control as misunderstood,” Rachada said.
Rachada said the move was intended to reduce duplicate procedures, improve investment flexibility and enhance the country’s competitiveness. It does not mean the government is abolishing supervision or allowing foreigners to operate businesses freely and without conditions.
She added that the government remains committed to protecting Thai entrepreneurs. In the case of the “software development business”, the Commerce Ministry has already removed it from the draft ministerial regulation after concerns were raised by relevant agencies over possible impacts on Thailand’s digital industry. The decision was made to strike a balance between promoting investment and safeguarding the competitiveness of domestic operators.
Foreign business operations under List Three
Foreign business operations under List Three of the Foreign Business Act B.E. 2542 (1999) refer to businesses in which Thai nationals are not yet ready to compete with foreigners. Foreigners may operate these businesses only after obtaining permission from the Director-General, with the approval of the Foreign Business Committee. They include:
- Rice milling, and the production of flour from rice and field crops.
- Fisheries, limited to aquaculture.
- Forestry from planted forests.
- Production of plywood, veneer board, chipboard or hardboard.
- Production of lime.
- Accounting service businesses.
- Legal service businesses.
- Architectural service businesses.
- Engineering service businesses.
- Construction.
- Brokerage or agency businesses.
- Auctions.
- Domestic trade in indigenous agricultural products or produce not otherwise prohibited by law, except futures trading of agricultural products on the Agricultural Futures Exchange of Thailand, or domestic receipt of agricultural products without delivery.
- Retail trade of all types of goods with total minimum capital of less than 100 million baht, or with minimum capital of each store of less than 20 million baht.
- Wholesale trade of all types of goods with minimum capital of each store of less than 100 million baht.
- Advertising businesses.
- Hotel businesses, except hotel management services.
- Guided tour businesses.
- Sale of food or beverages.
- Plant propagation, breeding or improvement businesses.
- Other service businesses, except service businesses prescribed in ministerial regulations.
