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foreign business license in thailand

Foreign Business License Application in Thailand

As stated, foreigners seeking to engage in List 3 activities as per Thailand Foreign Business Law are required to apply for and obtain a Foreign Business License prior to commencing operations.

The Foreign Business Act sets forth the process by which the Foreign Business Committee (“Committee”) reviews the application. It states that the Committee is required to rule on the application within 60 days of submission. However, the application process in general has 2 district steps as follows:

(1) The process by which the presiding official at the Ministry of Commerce (MOC) accepts the application for review by the Committee

An application for a Foreign Business License is submitted to the MOC together with all required documents and information. The presiding MOC official, who is in charged with accepting the application will normally not do so until he is satisfied that all documents are in order. The official will perform the preliminary inspection upon presentation but usually he will require the person submitting the application to leave it for later inspection. The time frame for the official’s review of the application is not specified by statute.

In order to avoid these delays, make sure that the person designated to submit the application is familiar with the intended operations of the company to respond on the spot to the official’s questions regarding the application. In the case that the official requests additional documents and/or information, make sure the designated person supplies those documents in a timely fashion.

(2) The Committee’s actual review of the application.

Once the official accepts the application and issues a receipt, the sixty-day consideration period begins. The factors considered by the Committee when reviewing applications are:

– The advantages and disadvantages to the nation’s safety and security

– Public order, good morals, art, culture and traditions of the country

– Technology transfer and research and development

– Economic and social development

– Natural resources, conservation, energy and environment, consumer protection, size of the enterprises, employment

Technology transfer and research and development (R&D) are probably the most important. In 2004, the Ministry issued a document advising foreign investors on how they should describe technology transfer in the license application. Technology here is not just limited to R&D and use of sophisticated equipment, but also specifically includes “administration, management and marketing”. In addition, any planned programs the company has with Thai universities are taken under consideration by the committee.

In the event that the Foreign Business License application is rejected, the law requires that the MOC inform the applicant within 15 days of the decision. The notification of rejection must be in writing and expressly state the reasons why the application was rejected.

If the application is rejected, the applicant has the right to appeal the decision. The appeal must be submitted within 30 days of the date on which the applicant received the rejection notice. The Minister of Commerce is required to rule on the appeal within 30 days of receipt. The decision of the Minister shall be final.

Interested foreigners, who wish to operate a foreign business in Thailand, contact MSNA for further assistance in application for a Foreign Business License.

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Foreign Business License in Thailand

A foreign business can operate in Thailand by obtaining a Foreign Business License. Hence, the foreign business applicant that has a good chance to be granted a “Foreign Business License” has to have all these 3 characteristics:

  1. Being a juristic person (company) registered overseas or Thailand (for example, a Thai registered company with majority foreign ownership).
  2. Going to operate business to provide products or services to the private sector, including the private parties that have contracts with government agencies or with other private parties.
  3. Having a service contract or sale contract that specifies the name of the foreign business applicant as the contractual party with another private party and the products or services to be provided must involve high-level technology or require specialized skills.

If the applicant is certain that its business has all the above characteristics, here are some criteria to meet in order to be successful in getting the Foreign Business License:

a. The foreign business products or services should involve high-level technology or require specialized skills, which are beneficial for technology transfer to the Thai people;

b. The foreign business products or services should contribute toThailand’s basic public utilities which are beneficial to its socio-economic development (for example, transportation system, tele-communication system)

c. The foreign business should know what industries will most benefit from its products or services and what industrial sectors will the products or services help to grow and become more competitive and more successful.

d. The foreign business needs to have a sales or service contract with the name of the client as the contractual party with the company, showing the scope of the sales or services, terms and conditions and the length of the sales or service period.

Contact MSNA, your business partner in Thailand to your company a Foreign Business License.

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Do You Need A Foreign Business License?

Remember if your foreign majority owned company does exports from Thailand or manufacturing of goods in Thailand, you do not need to obtain a Foreign Business License. And if you are Australian or Japanese or American, you may not have to obtain a Foreign Business License but please read on..

Australia

Thailand and Australia have Thai – Australia Free Trade Agreement. The persons who conduct the business according to the Foreign Business Act and who are under Thai – Australia Free Trade Agreement condition can request for the Certificate of Business Operation from the Bureau of Foreign Business Administration, Department of Business Development details of which are included in Guideline for Requesting Business Operations Certificate according to Section 10 of Foreign Business Acts B.E.2542 under Thai – Australia Free Trade Agreement

Here is the full version of Thai – Australia Free Trade Agreement.

Japan

Since Thailand and Japan have the JTEPA agreement, the persons who conduct the business according to the Foreign Business Act and who are under JTEPA condition can request for the Certificate of Business Operation from the Bureau of Foreign Business Administration, Department of Business Development details of which are included in Request for Business Operations Certificate under JTEPA.

Here is the full Japan – Thailand Economic Partnership Agreement.

USA

Thailand and the USA signed the Treaty of Amity (the Treaty of Amity and Economic Relations between the Kingdom of Thailand and the United States of America) on 29 May 1966. Because of the Treaty of Amity, American citizens and American majority owned companies can operate their business in Thailand without having to have a Foreign Business License. However, they still have to request for the Certificate of Business Operation from the Bureau of Foreign Business Administration, Department of Business Development of the Ministry of Commerce, Thailand.

Here is the full version of Treaty of Amity between Thailand and U.S.A.

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Obtaining a Foreign Business License to do business in Thailand

If you are a foreign majority owned company, you will need to obtain a License to Operate Business. If you are a US majority owned company, because of the Treaty of Amity between Thailand and USA, you will request for a Certificate of Business Operation. Some Australian and Japanese citizens and companies may not have to apply for a Foreign Business License (thus only have to request for a Certificate of Business Operation) if certain conditions are met under the Thai – Australian Free Trade Agreement or the JTEPA (Japan Thailand Economic Partnership Agreement). An application must be submitted to the Bureau of Foreign Business Administration, Department of Business Development of the Ministry of Commerce, Thailand with applicable fees. Usually it takes a few months to get a Foreign Business License but only less than a month to get a Certificate of Business Operation in case of American majority owned companies or Australian or Japanese under the trade agreements mentioned above.

The application usually contains details of your company’s profile, type of applied business, characteristics of business and stages of operation, capital structure, business structure, size of business, technology transfer plan, and employment. You may want to hire a lawyer or a good Thai accounting firm with lots of experience in the field like MSNA to obtain the Foreign Business License for you. It is not an easy task if you do not do it all the time to prepare such an application.

In June 2010, the Department of Business Development issued an application preparation handbook to help foreign businesses understand what they need to submit to get the Foreign Business License.

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