In brief
The Cabinet has approved in principle the removal of nine businesses from the requirement to obtain a Foreign Business License or Foreign Business Certificate under the Foreign Business Act B.E. 2542 (the FBA) as proposed by Ministry of Commerce (the MOC).
The rationale for such removal is to reduce regulatory duplication in cases where certain businesses are already subject to specific laws and supervision by sectoral regulators. In addition, some of these businesses are primarily intended to provide services to affiliated and group companies, while others are aimed at supporting employee benefits. These initiatives are designed to eliminate legal duplication and enhance the ease of doing business for foreign investors in Thailand.
In more detail
The proposed removal covers nine businesses, which are grouped into three main categories based on regulatory rationale:
1.Businesses subject to specific laws and regulatory approvals
These businesses are already governed by specific laws and regulatory approvals from other authorities, and therefore approval under the FBA is considered duplicative.
- Telecommunications service under a Type 1 telecommunications license (regulated under the telecommunications business laws) for telecommunications business operators who own no telecommunications network
- Treasury center business (regulated under exchange control laws)
- Provision of services as an agent, dealer, advisor, or fund manager in relation to derivatives contracts where the underlying goods or reference variables are not governed by the Derivatives Act
- Trading in agricultural futures on a derivatives exchange (where delivery or receipt of the agricultural products is to be made in warehouses designated by the derivatives exchange)
- Other businesses under the law governing securities and exchange (the scope of businesses to be covered by this exemption remains to be clarified)
2. Provision of service businesses for affiliated and group companies
These are businesses that provide services exclusively within affiliated and group companies and therefore are considered to have limited impact on competition with Thai business operators.
- Administrative management, human resources management, and IT management services provided to affiliated and group companies
- Financial guarantee for affiliated companies (limited to domestic guarantees only)
3. Other supporting service businesses
These businesses are considered ancillary or operationally necessary, with limited competitive impact.
- Leasing of space for installation of electronic devices, such as financial service machines or vending machines, for employee convenience
- Petroleum drilling services, which are provided only to concessionaires
The above draft will be submitted to the Office of the Council of State for further review and comments. It is important to review the precise scope of the business activities that will be removed once they have been approved by the relevant authorities and subsequently submitted to the Cabinet for acknowledgement.
We will keep you apprised of any further developments. In the meantime, if you have any questions, please feel free to contact us.
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Pichayapa Aroonrat, Associate, has contributed to this legal update