Thailand to ease restrictions on foreign entrepreneurs

Foreigners looking to set up a business in Thailand may soon find it easier to do so. The Cabinet has approved a proposal to relax rules under the Foreign Business Act. It is planned to increase the permissible share of foreign participation and expand the list of industries open to foreign investors.

Currently, foreigners can own no more than 49 percent of a Thai company. In addition, access to a number of areas is closed to them. These restrictions have long been a source of discontent among international entrepreneurs, especially those launching start-ups or small businesses and counting on investment and modern technology. Often, businesses are registered through Thai partners-nominees, which is legally controversial and carries risks.

According to Deputy Government Spokesman Karom Polpornklang, the Ministry of Commerce has been instructed to prepare specific proposals. The authorities want to move from a policy of protecting local businesses to supporting them, so that Thai companies can more confidently compete with foreign ones.

The reform has received support from key government agencies, including the ministries of finance, trade, labor, and the interior, as well as the Board of Investment and the National Economic and Social Development Council. The Ministry of Finance has emphasized that the law needs to be updated, especially regarding the rules that determine which industries foreigners can enter and what stakes they can have in companies.

Currently, many sectors, including land trading, mining, forestry, and legal services, are completely closed to foreign investors. In other cases, participation is possible only with special permission, such as a Foreign Business License, BOI promotion status, or Treaty of Amity registration, which is available to US citizens. These procedures are complex, expensive, and time-consuming, making it especially difficult for small businesses.

The reform aims to remove these barriers. One of the key points will be a revision of the permissible share of foreign ownership. The exact parameters have not yet been announced, but the new limit is expected to be higher. This should attract more investors and reduce the need to use nominees.

The changes will be especially beneficial for startups. Karom noted that such companies depend on foreign investment and technology, which are currently limited by outdated regulations. The updated legislation should speed up the introduction of innovation and increase Thailand’s competitiveness in promising industries.

While the exact timing has not yet been announced, several ministries are already working on the details. Discussions are currently underway on which industries will open to foreigners and how ownership rules will be adjusted.