There are two sets of regulations that place work restrictions on foreigners in Thailand. A Royal Decree which list occupations closed to foreigners, and a Law which closes certain activities to foreigners.
 

RESTRICTED OCCUPATIONS

A Royal Decree in 1973 listed 39 occupations that were than closed to aliens. This list has been amended on several occasions by subsequent Royal Decrees, the latest one in 1979. Prohibited occupations are:
 

• Labour
• Work in agriculture, animal breeding forestry, fishery or general farm supervision
• Masonry, carpentry, or other construction work
• Wood carving
• Driving motor vehicles or non-motorised carriers, except for piloting international aircraft
• Shop attendant
• Auctioning
• Supervision, auditing or giving services in accounting, except occasional international auditing
• Gem cutting and polishing
• Hair cutting, hair dressing and beautician work
• Hand weaving
• Mat weaving or making of wares from reed, rattan, kenaf, straw or bamboo pulp
• Manufacture of manual fibrous paper
• Manufacture of lacquerware
• Thai musical instrument production
• Manufacture of nielloware
• Goldsmith, silversmith and other precious metal work
• Manufacture of bronzeware
• Thai doll making
• Manufacture of mattresses and padded blankets
• Alms bowl making
• Manual silk product making
• Buddha image making
• Manufacture of knives
• Paper and cloth umbrella fabrication
• Shoemaking
• Hat making
• Brokerage or agency work, except in international business
• Dressmaking
• Pottery or ceramics
• Manual cigarette rolling
• Legal or litigation service
• Clerical or secretarial work
• Manual silk reeling and weaving
• Thai character type-setting
• Hawking business
• Tourist guide or tour organising agency
• Architectural work
• Civil engineering work

THE FOREIGN BUSINESS ACT

The Foreign Business Act (the Act) was  approved on 15 October 1999 by the Senate and on 20 October 1999 by the House of Representatives, and it was published in the Government Gazette on December 4, and it will be enforced from March 4, 2000.
The Act repeals and replaces the 1972 National Executive Council Announcement No. 281 (or Alien Business Law, ABL).

As with the Alien Business Law,  the businesses attached to the Act are still divided into three categories - List 1, List 2, and List 3. The ABL divided businesses into Annex A, Annex B and Annex C.

However, the business categories in the Act have been substantially changed from  those of the ABL. Under the Act, a Foreign Business Board will review the businesses listed at least once a year, and present it  to the Commerce Minister. The Commerce Minister, acting in terms of the recommendations of the Foreign  Business Board, is empowered to issue  Ministerial Regulations.

The Foreign Business Board will consist of 19 committee members from both government and private agencies. The latter will include the Thai Chamber of Commerce and the Federation of Thai Industries. A maximum of five experts can also sit on the committee.

List 1 activities are strictly prohibited to aliens. List 2 is prohibited to aliens unless permission is granted by the Commerce Minister by and with an appropriate Cabinet resolution. Alien juristic entities allowed to engage in the businesses in List 2 must meet the following two condition:

1. At least 40 percent of all of the shares are held by Thai persons or non-alien juristic entities

2. Two-fifths of the members of the Board of Directors are Thai.

List 3 is prohibited to aliens unless permission is granted by the Director-General of the Department of Commercial Registration, Ministry of Commerce, by and with approval of the Foreign Business Board.

An alien can engage in businesses in List 2 and/or List 3 if he is a promoted investor in accordance with either the Investment Promotion Act, Industrial Estate Authority of Thailand Act, or other laws. They must then notify the Commerce Minister.
 
 
 

MAJOR FEATURES OF THE FOREIGN BUSINESS ACT COMPARED WITH THE ALIEN BUSINESS LAW
 

DEFINATION OF ALIEN

Alien Business Law

1. A natural person or a juristic person who is not of Thai nationality;

2. A juristic entity of which foreigners hold one-half or more of either the number of the shares or the value of the shares;

3. A juristic entity of which foreigners account for one-half or more of the shareholders;

4. A limited partnership or a registered ordinary partnership with a foreign managing  partner or a foreign manager.

Bearer (no name) certificate shares of a limited company shall be considered shares owned by aliens, unless otherwise prescribed by Ministerial Regulation..
 

Foreign Business Act

1. A natural person who is not of Thai nationality;

2. A juristic entity which is not registered in Thailand;

3. A juristic entity incorporated in Thailand with foreign shareholding accounting for one-half or more of the total number or value of shares’

4. A limited partnership or registered ordinary partnership whose managing partner or manager is a foreigner.

Bearer (no-name) certificate shares of a limited company shall be considered shares owned by aliens, unless otherwise prescribed by Ministerial Regulation.
 

SHAREHOLDING LIMIT IN OTHER BUSINESS

Alien Business Law

An alien as a permit holder or shareholder or partner of a juristic entity under the alien definition, shall not become a partner or shareholder in any other partnership or company with more than one-third of the total shares of the company or with more than one-third of the total capital of the partnership, or buy out such businesses, unless permission has been granted by the Director-General, who may prescribe certain conditions.

Foreign Business Act
None
 

MINIMUM CAPITAL

Alien Business Law
None

Foreign Business Act

The minimum capital is three million baht for businesses listed in the Act, and two million baht for businesses not listed in the Act. However, the minimum capital requirement shall not been imposed in cases of re-investment.
 

LIST OF PROHIBITED AND RESTRICTED BUSINESSES

Alien Business Law

Businesses subject to the Act are classified into three categories - Annex A, Annex B, and Annex C.

Any businesses specified in Annex A are strictly prohibited to aliens.

An alien cannot engage in any businesses in Annex B and/or Annex C unless he is granted investment promotion by the Board of Investment.

An alien cannot engage in any businesses in Annex C unless he is granted permission by the Director-General.
 

Foreign Business Act

Businesses subject to the Act are classified into three categories  - List 1, List 2, and List 3.

List 1 consists of businesses strictly prohibited to aliens.

List 2 is prohibited to aliens unless permission is granted by the Commerce Minister by and with appropriate Cabinet resolution. Alien juristic entities allowed to engage in the businesses in List 2 must meet the following two conditions:

1. At least 40 percent of all the shares are held by Thai  persons or non-alien juristic entities. (The minimum threshold may be lowered to 25 percent given reasonable grounds.)

2. Two-fifths of the members of the Board of Directors are Thai.

List 3 is prohibited to aliens unless permission is granted by the Director-General of the Department of Commercial Registration, Ministry of Commerce, by  and with approval of the Foreign Business Board.

An alien can engage in business in List 2 and/or List 3 if he is a promoted investor in accordance with either the Investment Promotion Act, Industrial Estate Authority of Thailand Act, or other laws.
 
 

CHANGES IN BUSINESS CATEGORIES ATTACHED

Alien Business Law

Wholesales of all kinds of products (Annex C) except those specified in Annex A, and retailing of all products (Annex B and Annex C), require an investment promotion by the Board of Investment, or a permission by the Director-General or the Department of Commercial Registration, Ministry of Commerce.

Broker or agent business (Annex A) is prohibited to aliens.

All kinds of Businesses in services are specified in Annex A, Annex B, and Annex C. Those are under the Law. Particularly, accounting, legal, and architectural services are under Annex A, while engineering service is under Annex C.

Building construction business is under Annex A, and other construction businesses are under Annex C.

The business of Internal trade concerning local agricultural products and advertising is under Annex A.
 

Foreign Business Act

The businesses of wholesale and retail of all kinds of goods still require licensing under List 3 except a wholesale business which the minimum capital of each store is 100 million baht or more, and a retail business which the total minimum capital is 100 million baht or more, or the minimum capital of each store is 20 million baht or more.

The business of broker or agent is under  List 3 and may be engaged in by aliens if such aliens obtain a Foreign Business License. However, the business as the following is exempt from the Act:

Trading in securities or services concerning future trading in agricultural commodities, financial instruments or securities;

Trading in or the procurement of goods and services needed for production by, or providing the services of, an enterprise in the same group;

Trading, purchasing (for other) or distributing or finding domestic or overseas markets for selling goods made domestically or imports as an international trading business, with a minimum capital of the alien of at least 100 million baht; and 

Other lines of business stipulated in Ministerial Regulations.

While all types of service business (except for those to be prescribed in Ministerial Regulations) are under List 3 and can be licensed, a major change has been to allow for accounting, legal, and architectural services (previously not capable of licensing), and engineering service to be licensed.

The business of construction is capable of licensing under List 3: however, it is exempt from the Act in case of its business relates to:

Construction of things that provide basic services to the public with respect to public utilities or communications and which require the use of special instruments, machinery, technology, or expertise in construction and a minimum capital of the alien of at least 500 million baht;

Other categories of construction as stipulated in Ministerial Regulations.

Domestic trade concerning indigenous agricultural produce or products not prohibited by any other law, and advertising are in List 3 and may be engaged in by aliens if such aliens obtain a Foreign Business License.
 
 

REVISION OF PROHIBITED AND RESTRICTED BUSINESSES

Alien Business Law

An alien can engage in any businesses listed in Annex A or Annex B if permitted by a Royal Decree. An amendment of Annex C can only be made by a Royal Decree.

Foreign Business Act

An amendment of List 1 and Chapter 1 of List 2 can only be made by an Act. Other amendments will require a Royal Decree. The Foreign Business Board is required to review and revise the business listed at least once a year and to present an opinion as to any changes to the Commerce Minister.
 

PENALITIES

Alien Business Law
A fine of 30,000-500,000 baht

Foreign Business Act
A fine of 100,000-1,000,000 baht and imprisonment of no more than three years
 
 

LIST OF BUSINESS ACTIVITIES

LIST 1
Business that aliens are not permitted to do for special reasons:

1. Newspaper undertakings and radio and television station undertakings

2. Lowland farming/upland farming, or horticulture

3. Raising animals

4. Forestry and timber conversions from natural forests

5. Fishing for aquatic animals in Thai waters and Thailand’s exclusive economic zones

6. Extraction of Thai medical Herb’s

7. Trade in and auctioneering of Thai ancient objects or ancient objects of national historical value

8. Making or casting Buddha images and making monk’s bowls

9. Dealing in land.

LIST 2
Businesses concerning national security or safety with an adverse effect on art and culture, customs or native manufacture/handicrafts, or with an impact or natural resources and the environment.
 

BUISNESSES CONCERNING NATIONAL OR SAFETY

(1)  Production, disposal (sale) and overhaul of:

(a) Fire arms, ammunition gunpowder and explosives

(b) Components of fire arms, gunpowder and explosives

(c) Armaments, and military vessels, aircraft or conveyances

(d) All kinds or war equipment or their components.

(2) Domestic transport by land, water or air inclusive of the undertaking of domestic aviation.
 

BUISNESSES WITH AN ADVERSE AFFECT ON ART AND CULTURE, CUSTOMS OR NATIVES MANUFACTURE /HANDICRAFTS

(1) Dealing in antiques or objects of art and works of art, and Thai handicrafts

(2) Production of wood carvings

(3) Raising silkworms, producing Thai silk thread and weaving or printing patterns on Thai  silk textiles

(4) Production of Thai musical instruments

(5) Production of articles of gold or silver, nielloware, nickel-bronze ware or laqurware

(6) Production of crockery and terra cotta ware that is Thai art of culture.
 

BUISESSES CONCERNING NATURAL RESOURCES AND THE ENVIROMENT

(1) Production of Sugar from sugarcane

(2) Salt farming, inclusive of making salt from salty earth

(3) Making rock salt

(4) Mining, inclusive of stone blasting or crushing

(5) Timber conversions to make furniture and articles of wood.
 

LIST 3

BUISNESSES WHICH THAIS ARE NOT READY TO COMPETE IN UNDERTAKINGS WITH ALIENS

(1) Rice milling and production of flour from rice and farm crops

(2) Fishery, limited to propagation of  aquatic animals

(3) Forestry from replanted forests

(4) Production of plywood, wood veneer, chipboard or hardboard

(5) Production of natural lime

(6) Accounting service undertakings

(7) Legal service undertakings

(8) Architectural service undertakings

(9) Engineering service undertakings

(10) Construction except:

(a) Construction of things that provide basic services to the public with respect to public utilities or communications and which require the use of special instruments, machinery, technology or expertise in construction and a minimum capital of the alien of a least 500 million baht

(b) Other categories of construction as stipulated in ministerial regulations

(11) Brokerage or agency undertakings except:

(a) Trading in securities or services concerning futures trading in agricultural commodities, financial instruments or securities

(b) Trading in or the  procurement of goods or services needed for production by or providing the services of and enterprise in the same group

(c) Trading, purchasing (for others) or distributing or finding domestic or overseas markets for selling goods made domestically or imports as an international trading business, with a minimum capital of the alien of at least 100 million baht

(d) Other lines of business stipulated in ministerial regulations

(12) Auctioning, except:

(a) International bidding that is not bidding in antiques, ancient objects or objects of art that are Thai works of art, handicraft or ancient objects, or of historical value

(b) Other types of auction as stipulated in ministerial regulations.

(13) Domestic trade concerning indigenous agricultural produce or products not prohibited by any present law

(14) Retail trade in all kinds of goods where the total minimum capital is 100 million baht or more, or the minimum capital of each  store is 20 million baht or more

(15) Wholesale trade in all kinds of goods with a minimum capital for each store of more than 100 million baht

(16) Advertising undertakings

(17) Hotel undertakings, except for hotel management services

(18) Sale of food or beverages

(19) Plant breeding and propagating, or plant improvement undertakings

(20) Doing other service businesses except for service businesses prescribed in ministerial regulations.