FBA ENTITY CLASSIFICATION
What Is a Foreign Company Under Thailand’s Foreign Business Act?
A status test for the legal entity, followed by a separate test for its business activities.
A foreign company under Thailand’s Foreign Business Act is not limited to a company incorporated overseas. The Act also captures specified Thai registered entities, including a company with at least half its capital shares or investment held by the relevant foreign persons. Exactly 50% meets that threshold; Thai incorporation alone does not make an entity non-foreign under the Act.
Key takeaways
- Classify the legal entity rather than its trading name or office location.
- A corporate shareholder needs its own status assessment.
- Foreign status is not itself a ban on owning or operating a company.
- Directorship, tax residence and immigration rights answer different questions.
In this article
Read “foreigner” as an entity classification
The BOI headquarters portal’s statutory definition includes non-Thai individuals, entities not registered in Thailand, and specified Thai registered entities. For a company, the relevant capital threshold is at least one half. It also addresses holdings through specified entities and partnerships with a foreign managing partner or manager. Check the actual entity category rather than applying the company percentage to every legal form.
A company registered in Thailand can still be a foreigner under the FBA. Conversely, foreign status does not automatically prohibit every activity. Classifying the investor or company comes before determining what it proposes to do and which operating conditions apply.
The Thailand company registration requirements establish the entity’s formation record. Use its legal name and corporate records for the status assessment; a Thai address, local staff or a Thai bank account cannot replace the statutory test.
Classify the proposed company
Use the legal entity and capital records to establish which status test applies.
Complete a status worksheet before selecting a licence route
This worksheet illustrates the classification sequence. The simple percentages assume equal capital shares, direct individual holders and no additional entity-specific complication. It does not resolve nominee conduct or another statute’s ownership restrictions.
| Entity facts | FBA starting result | Record to establish |
|---|---|---|
| Company incorporated overseas | Foreign entity | Foreign registration and identity |
| Thai company, 50 of 100 equal shares held by foreign individuals | At the foreign threshold | Capital and shareholder allocation |
| Thai company, 49 of 100 equal shares held by foreign individuals | Below this direct threshold | Genuine holders and complete structure |
| Thai company with a corporate shareholder | Classify that holder before completing the analysis | Upstream entity and ownership evidence |
Do not assume that a Thailand incorporated shareholder is automatically a Thai holder for this purpose. Document the relevant corporate ownership chain and apply the statutory categories. Where several layers, unusual capital rights or uncertain records are involved, obtain a specific classification rather than guessing from a group chart.
The distinctions in the ownership percentage and genuine-investment boundary remain relevant even below the direct foreign threshold. An arithmetic result is not an endorsement of the arrangement.
Keep status, governance and operating permission separate
Director nationality and voting arrangements should not be substituted for the capital-based company test. They can matter to governance, evidence requirements or the wider legality of the arrangement, but require their own analysis. Record the question being answered before drawing a conclusion.
Likewise, FBA classification is not a decision about tax residence, land rights, a professional licence or a foreign director’s right to work. Section 13 addresses matters specifically governed by other laws; the official English translation assists reading alongside the controlling Thai text.
Refresh the worksheet before a share transfer, capital issue, upstream ownership change or change in entity form. Record the effective date and the before-and-after facts. A classification made for last year’s shareholders may not describe the company after an investment round.
Check a changing ownership chain
Identify upstream holders and proposed transactions before relying on an old classification.
Record the company status, then test its actual activities
Close the definition question with an identified entity, the evidence used, the relevant statutory category and the date assessed. If the company is foreign, move to the activity analysis; if it is below the threshold, retain the separate genuineness and sector-law checks.
Do not turn either result into a blanket statement that the business is approved. The next decision needs the actual contracts, services, products and intended operations, followed by the permission, exemption or certificate analysis appropriate to those facts.
Move from status to activity
Use a documented entity classification as the input to the operating-permission review.
Frequently asked questions
Does the company name need to include “foreign”?
The FBA status test does not depend on that label in the trading name. Use the statutory facts and official corporate records.
Does a Thai passport held by one director decide the company’s status?
No. Apply the relevant entity test, including the capital holders for a company, rather than treating one director’s nationality as decisive.
Does a BOI certificate make an entity cease to be foreign?
Do not confuse a permission or promoted-project route with the entity classification. Establish the certificate’s scope separately.
Can I use this classification for every Thai law?
No. Other statutes can define status or impose conditions differently. Identify the law relevant to the particular right or transaction.
