Foreign Shareholding — the 49% Line, Nominees and Lawful Structures

They should cover the activities you will genuinely carry out plus foreseeable follow-on activities, because work-permit applications, sector licences and tax refunds are all checked against the registered objectives. Conversely, listing restricted activities from the Foreign Business Act lists that you do not actually perform invites extra scrutiny for a company with foreign shareholders.

If the company operates a business listed in the annexes to the Foreign Business Act 1999, foreign shareholding is capped at 49% unless a licence or certificate is obtained. For businesses outside the restricted lists — many manufacturing activities, for example — 100% foreign ownership is permitted with no licence. So the first question is always whether your activity sits in List 1, 2 or 3.

Yes. Section 36 of the Foreign Business Act prohibits Thai nationals from holding shares on behalf of, or assisting, a foreigner to operate a business in circumvention of the Act, with fines and imprisonment. The DBD periodically verifies the source of funds of Thai shareholders. We do not accept nominee structures, and will instead propose lawful routes: an FBL, the Treaty of Amity, or BOI promotion.

Workable, disclosable tools include drafting the directors' authority so the foreign side signs binding documents, issuing preference shares with voting rights set out in the registered articles, and requiring quorum or special resolutions for key matters. All of this must appear in the registered articles rather than a side letter — hidden control agreements are exactly what triggers a nominee finding.

Yes. Under the Foreign Business Act, a juristic person becomes a 'foreigner' when foreigners hold half or more of the shares. A company held 49% foreign and 51% Thai remains a Thai juristic person and may operate restricted businesses without an FBL, but the Thai shareholders must be genuine investors able to evidence their funds.

When the entity qualifies as a foreigner — half or more foreign shareholding — and will operate a business in List 2 or List 3 of the Foreign Business Act. Applications go to the DBD with a business plan, financial projections, technology-transfer details and Thai employment plans. The statutory review period is roughly 60 days from a complete filing, though in practice you should allow more.

Under the Foreign Business Act the minimum is THB 2 million for a business not requiring a licence, and THB 3 million per licensed business category for List 2 or List 3 activities, remitted according to the schedule set by ministerial regulation. That threshold is separate from the Department of Employment's THB 2 million registered-capital benchmark per work permit.

Generally yes, except for activities in List 1 of the Foreign Business Act or where a BOI announcement sets a specific Thai-shareholding condition. After the promotion certificate is issued, the company still applies to the DBD for a certificate to operate so that its foreign-business status is fully documented.

The Department of Employment benchmark is THB 2 million of paid-up registered capital per foreign employee. Where the company is majority foreign-owned and assessed under the Foreign Business Act, the figure can be THB 3 million per licensed business category. BOI-promoted companies follow the conditions of their promotion certificate instead.

Navigation in Thai waters is regulated by the Marine Department; Thai-flagged vessels are subject to Thai-ownership requirements under Thai vessel legislation, and water transport is a restricted activity for foreigners. A common structure separates the vessel-owning entity from the service operator — which must be designed to comply genuinely, not through nominee holdings.

If the activity is listed in the schedules to the Foreign Business Act B.E. 2542, majority foreign ownership requires a Foreign Business Licence, a treaty right such as the US Treaty of Amity, or BOI promotion. Activities outside the restricted lists, including many manufacturing lines, can be 100% foreign-owned without any additional licence.

A nominee is a Thai national holding shares on behalf of a foreigner without real investment or real control. Section 36 of the Foreign Business Act penalises both the Thai nominee and the foreigner using them, with fines and imprisonment, and the court may order the shareholding unwound. The DBD increasingly asks Thai shareholders to evidence the source of their investment funds. Use an FBL, Amity certificate, BOI promotion, or design the business outside the restricted lists instead.

A Thai company with foreign holding of no more than 49% may buy land, but the Land Office will scrutinise the source of the Thai shareholders' funds to guard against nominee holding. BOI-promoted companies, and companies permitted under specific statutes, may own land for the promoted project within prescribed limits and must use it only for the approved purpose.

Our advisory team has handled corporate registration and cross-border document work for more than fifteen years and can cover the whole cycle: shareholding structure review against the Foreign Business Act, name reservation and incorporation, meeting documents, translation and legalisation of overseas corporate documents, director and address changes, monthly accounting and eventual liquidation. Clients gain the most from the structure review before filing, because corrections afterwards cost far more time.