Foreign Business License (FBL)
- Purpose: Grants permission to foreigners to operate a business restricted under the Foreign Business Act (FBA). Aims to attract businesses that significantly benefit the Thai economy.
- Approval: Issued by the Ministry of Commerce, Department of Business Development.
- Activities: Allows activities like:
- Service businesses where foreign expertise is needed
- Export-oriented manufacturing
- Businesses offering technology transfer
- Process:
- Complex and discretionary – approval is not automatic
- Involves case-by-case assessment of the business's benefit to Thailand
- Ownership: May allow for majority foreign ownership in certain cases, even in restricted sectors.
Foreign Business Certificate (FBC)
- Purpose: Confirms a foreign company's right to engage in restricted business activities under specific exemptions. This includes:
- Companies under the US-Thai Treaty of Amity
- Businesses promoted by the Board of Investment (BOI)
- Businesses operating within the Industrial Estate Authority of Thailand (IEAT)
- Approval: Issued by the Ministry of Commerce, Department of Business Development,
- Activities: The FBC itself doesn't grant new permissions, rather it allows businesses to operate as legally outlined by their special status (Treaty, BOI, IEAT).
- Process:
- More procedural compared to FBL
- Required to confirm legal status to operate restricted businesses under exemptions
- Ownership: Dependent on the underlying exemption. For example, the US-Thai Treaty allows majority US ownership in most sectors.
In Summary
- FBL: A proactive license sought by foreign companies to gain entry into restricted sectors based on their merits.
- FBC: A confirmatory document required for companies already holding exemptions under treaties or promotions.
Example:
A US company specializing in software development wants to open a branch in Thailand. Software development is restricted under the FBA.
- They could:
- Apply for an FBL, demonstrating the value their business would bring to Thailand's technology sector.
- If they don't get the FBL, they could still apply for the FBC under the US-Thai Treaty of Amity if eligible, allowing them to operate.
Important Notes:
- Overlapping terminology: The terms are sometimes used loosely, adding to the confusion.
- Professional Advice: Since these regulations are complex, always consult lawyers specializing in Thai corporate law for the most accurate and up-to-date guidance regarding your specific business activity.
