Foreign Ownership: Ownership Ratio Table | DoingBusinessThailand.com

Foreign Ownership: Ownership Ratio Table |

January 6 2012 Categories: Doing Business In Thailand No comments yet

In this post I tried to make a table that shows for each type of activities the percentage of foreign ownership allowed in Thailand. This kind of exercise is always difficult because there are so many variables applicable that the table format is not always ideal. Anyway this is a work in progress and we will try to improve the presentation over the next weeks.

WARNING:

The % of foreign ownership applicable in this table are for all foreign investors excepted:

(1) US Citizens who are still benefiting of the THAI US Amity Treaty protection pending the negotiation of a FTA.

(2) Citizens of countries that have a FTA Agreement with Thailand (Japan, Australian) as they might have additional benefits not applicable to the rest of the world

NOTE:

The table shows the basic percentage of foreign ownership allowed to foreign investor per type of activities without taking into account available overrides and promotion.

There are existing overrides that may allow foreign investors to acquire a higher % of foreign ownership in certain type of businesses. Those overrides are:

(1) Applying and Obtaining a Foreign Business License (Activities Listed under List 2 and List 3 of the Foreign Business Act) See however my post on the Investing in Thailand: Obtaining a Foreign Business License as to the chances a foreign investor actually has to obtain said license.

(2) Applying and Obtaining a BOI Promotion: Please see my post Investing in Thailand: What is BOI promotion? and other related post. Another override is to invest into a Industrial Park under the IEAT.

We would appreciate your feedback on how we could improve this table:

ACTIVITIES	MAXIMUM FOREIGN OWNERSHIP ALLOWED	REMARKS
This table is applicable to Foreign Citizens who are not National from the US or from a country that has a FTA with Thailand
ACTIVITIES WHERE FOREIGN INVESTORS MAY OWN THE MAJORITY OF THE BUSINESS UP TO 100%
All manufacturing activities which are not prohibited or restricted underList 1, List 2 or List 3 of the FBA	up to 100%
FOREIGN BUSINESS LIST 1
(1) Newspaper business, radio broadcasting or television station business.	49%	Business that foreign investors are not permitted to operate for special reasons. Note that BOI promotion for many agricultural activities will not anymore include foreign ownership privilege. Always check the BOI eligible activities list to see if the activity you are interested to invest into is among the activities promoted by the BOI
(2) Rice farming, farming or gardening.	49%
(3) Animal farming.	49%
(4) Forestry and wood fabrication from natural forest.	49%
(5) Fishing of marine animals in Thai waters and within specific Thai economic zones.	49%
(6) Extraction of Thai herbs.	49%
(7) Trading and auctioning Thai antiques or national historical objects.	49%
(8) Making or casting Buddha images and monk alms bowls.	49%
(9) Land trading.	49%


FOREIGN BUSINESS ACT LIST 2
*Businesses related to national safety or security*	49%	Foreign Investors may apply for a Foreign Business License and if successful may receive the permission from the cabinet to own the majority of the company In many sectors the chance to obtain a Foreign Business License is remote. Another override is to apply for a BOI promotion as BOI promotion often comes with a 100% ownership privilege
(1) Production, selling, repairing and maintenance of:	49%
(a) Firearms, ammunition, gunpowder, explosives.	49%
(b) Accessories of firearms, ammunition, and explosives.	49%
(c) Armaments, ships, aircraft, or military vehicles.	49%
(d) Equipment or components, all categories of war materials.	49%
(2) Domestic land, waterway or air transportation, including domestic airline business.	49%
Group 2: Businesses involving art and culture, traditional and folk handicraft:
(1) Trading antiques or art objects which are Thai arts and handicraft.	49%
(2) Production of carved wood.	49%
(3) Silkworm farming, production of Thai silk yarn, weaving Thai silk or Thai silk pattern	49%
printing.	49%
(4) Production of Thai musical instruments.	49%
(5) Production of goldware, silverware, nielloware, bronzeware or lacquerware.	49%
(6) Production of crockery of Thai arts and culture.	49%
Group 3: Businesses affecting natural resources or environment:
(1) Manufacturing sugar from sugarcane.	49%
(2) Salt farming, including underground salt.	49%
(3) Rock salt mining.	49%
(4) Mining, including rock blasting or crushing.	49%
(5) Wood fabrication for furniture and utensil production	49%
FOREIGN BUSINESS LICENSE LIST 3
Businesses in which Thai nationals are not yet ready to compete with foreigners:	49%	Foreign Investors may apply for a Foreign Business License and if successful may receive the permission from the DBD to own the majority of the company In many sectors the chance to obtain a Foreign Business License is remote. Another override is to apply for a BOI promotion as BOI promotion often comes with a 100% ownership privilege
(1) Rice milling and flour production from rice and farm produce.	49%
(2) Fishery, specifically marine animal cultures.	49%
(3) Forestry from forestation.	49%
(4) Production of plywood, veneer board, chipboard or hardboard.	49%
(5) Production of lime.	49%
(6) Accounting service business.	49%
(7) Legal service business.
(8) Architectural service business.	49%
(9) Engineering service business.	49%
(10) Construction, except for:	49%
(a) Construction rendering basic services to the public in public utilities or transportrequiring special tools, machinery, technology or construction expertise with a capital of 500,000,000 THB or more	up to 100%


(b) Other categories of construction as prescribed by the ministerial regulations.
(11) Broker or agent business, except:	49%
(a) Being broker or agent for underwriting securities or services connected with future trading of commodities or financing instruments or securities.	up to 100%

(b) Being broker or agent for trading or procuring goods or services necessary for production or rendering services amongst affiliated enterprises

(c) Being broker or agent for trading, purchasing or distributing or seeking both
domestic and foreign markets for selling domestically manufactured or imported
goods in the manner of international business operations with a foreign minimum
capital of Baht 100 million or more.
(d) Being broker or agent of other categories as prescribed by the ministerial regulations.
	49%
(12) Auction, except:	49%
(a) Auction in the manner of international bidding not being an auction of antiques,historical artifacts or art objects which are Thai works of arts, handicraft or antiques or having historical value.	up to 100%
	up to 100%
(b) Other categories of auction as prescribed by the ministerial regulations.	49%
(13) Internal trade connected with native products or produce not yet prohibited by law.	49%
(14) Retailing of all categories of goods having a total minimum capital of less than Baht 100 million or having a minimum capital for each shop of less than Baht 20 million.	49%
Retailing of all categories of goods having a total minimum capital of MORE than Baht 100 million or having a minimum capital for each shop of MORE than 20,000,000 THB per shop	up to 100%


(15) Wholesaling all categories of goods having minimum capital of each shop less than 100 millions THB	49%
(15) Wholesaling all categories of goods having minimum capital of each shop MORE than 100 millions THB	up to 100%
(16) Advertising business.	49%
(17) Hotel business, except for hotel management service.	49%
Hotel management service.	up to 100%
(18) Guided tour.	49%
(19) Selling food or beverages.	49%
(20) Plant cultivation and propagation business.	49%
(21) Other categories of service business except those prescribed in the ministerial regulations	49%
OTHER TYPE OF BUSINESS
Insurance Business	Less than 25%
Bank Business	Less than 25%	But exception granted by the Thai Government
Owning and running a Boat	Less than 25%	Please see BOI promotion however

Note: This post is an excerpt of Rene Philippe Dubout next book: “How to Invest Safely Into Thailand” to be published in January 2010

About the Author:

The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.

http//:www.renephilippe.com

Originally posted 2009-11-17 04:56:52.

Doing Business in Thailand