Doing Business in Thailand

This is my second post on the subject of Minimum Capital Requirement. I will discuss this time the minimum capital requirement for foreign BOI promoted companies. For Non BOI companies please refer to my previous post Doing Business in Thailand: Minimal Capital Requirements dated of 21 January 2010. 

According to a recent official ruling from the Department of Business Development the minimum capital requirement for a BOI companies will depend of whether the promoted company only conduct a business promoted by the Board of Investment or whether it will exercise a non promoted business as well.

If a foreign company exercise a business activity that is promoted by the BOI the minimum capital requirement will be as required by the Board of Investment in relation to this activity.

If a foreign owned company has obtained a BOI license to exercise a business activity which is promoted by the BOI and wishes also to exercise an activity which is not promoted by the BOI but is regulated by the Foreign Business Act then the minimum capital requirement will be the Capital Requirement under BOI + the Capital Requirement under FBA.

For example a foreign owned company that has a BOI license authorizing it to manufacture and sell products also want to exercise an activity regulated under the Foreign Business Act list 2 or list 3 such as for example trading third parties products and goods (other than those it manufacture) then the company would have to fulfill both BOI and FBA capital requirement.

If the company  BOI  license required a minimum paid up capital of 30,000,000 THB and if the foreign company also wants to exercise the brokerage/trading activity (under the form of a foreign majority owned company) without applying for a foreign business license (Exeption of FBA list 3 Section 11.C) then the foreign company will have to have a paid up capital of 30,000,000 THB (BOI) + 100,000,000 THB (FBA 11.c) that is to say 130,000,000 THB. If the foreign company wants to exercises other activities also listed in the FBA list 3 then it will have to fulfill the capital requirement for each of those activities as explained in my previous post on the subject (please see above for the reference)

Note that: if the additional activity the foreign company wishes to exercise in addition of the BOI promoted business is an activity which is not listed under FBA list 1, 2 or 3 the minimum capital requirement for this additional activity will be 2,000,000 THB only (section 14 of the FBA)

Note that: I did not mention in this post the case where the foreign owned company would exercise an additional activity under Foreign Business Act List 1. The reason is of course because foreign owned company may not at all exercise activities listed under FBA list 1

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

 © Copyrights 2009 – Rene Philippe Dubout – This article may be reprinted if information about the author, the websites, and the URLs remain intact.

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