What is a Foreign Business License (FBL) in Thailand?
While the 51/49 Thai to foreign shareholding structure is often identified as a suitable option for foreign business owner-operators, the option of 100% foreign ownership through the Ministry of Commerce’s Foreign Business License (FBL) is a welcome alternative. This FBL is different to a Foreign Business Certificate (FBC) through which a business may perform restricted activities with authorisation from the Board of Investment or an international treaty, although the terms FBC and FBL are often used interchangeably. It gives 100% ownership and control to the company’s investors as standard, similar to in the case of BOI companies.
On the other hand, whereas applications for investment promotion are made through the BOI, a separate government entity with a set of requirements that the company/project must meet in order to get promoted, the FBL application is made to the same government ministry as limited companies are registered with. The application for an FBL involves reviewing the company’s business plans to ensure it is not in conflict with any restrictions and then preparing the following documents:
- Certificate and business registration documents of the legal entity
- Identification documents of the foreign applicant and local representative in Thailand
- Supporting documents from the legal owner of the property being used as the local business registration address
- Details of business type and any licensing requirements
- Financial statement and other tax/accounting related documents
- A business plan covering a three-year period
- Nomination information of the company’s directors and shareholders along with supporting passport copies and address details
- Minimum investment amount in Thailand along with a breakdown of the investment
Documents from overseas will need to be signed by the authorised director of the foreign entity, notarised by a Notary Public and legalised by the Thai Embassy/Consulate in said country.
After the documents are submitted to the Ministry of Commerce, the application will be reviewed and the entire process takes between 4 and 6 months. The criteria that may be taken into consideration include factors such as benefits to the economy, social development, environmental protection, consumer protection, technology transfer and research and development conducted; including that the business’s intended activities are not in direct competition with those of Thai companies.
Please be advised that approval of the registration is at the discretion of the responsible government officials.
Applying for an FBL, among other licenses, undoubtedly requires expertise and recommendation. We do provide assistance completing an initial review of eligibility, which allows us to explore the likelihood of the FBL application being approved prior to you engaging us for the actual application. Feel free to reach out to our FBL lawyers, and we would be pleased to advise on the process – as well as on any alternative registration options you may find suitable or more appropriate for your business plans.