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1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

Thailand continues to welcome investment from all countries and seeks to avoid dependence on any one country as a source of investment. Many companies are carefully considering market factors, including the country’s declining competitiveness relative to other countries in the region, when making future investment decisions.

The FBA prescribes a wide range of business that may not be carried out by foreigners unless a relevant license has been obtained or an exemption applies. The term “foreigner” includes Thai registered companies where half or more of the capital is held by non-Thai individuals, foreign registered companies, and Thai registered companies which are themselves majority foreign-owned.

BOI, Thailand’s investment promotion agency, assists Thai and foreign investors to start and conduct businesses in targeted economic sectors by offering both tax and non-tax incentives.

Limits on Foreign Control and Right to Private Ownership and Establishment

There is no general prohibition against foreigners or domestic private entities, but various acts proscribe certain foreign-ownership restrictions, primarily in services such as banking, insurance, and telecommunications. The FBA details certain types of business activities reserved for Thai nationals. Foreign investment in those businesses must comprise less than 50 percent of share capital, unless specially permitted or otherwise exempt.

The following three lists, attached as FBA annexes, detail restricted businesses for foreigners:

List 1. This contains activities prohibited to non-nationals, including newspaper and radio broadcasting stations and businesses; rice and livestock farming; forestry and timber processing from a natural forest; fishery in Thai territorial waters and specific economic zones; extraction of Thai medicinal herbs; trading and auctioning of antique objects or objects of historical value from Thailand; making or casting of Buddha images and monk alms bowls; and land trading.

List 2. This contains activities related to national safety or security, and activities related to arts and culture, tradition, folk handicrafts, or natural resources and the environment. Restrictions apply to the production, sale and maintenance of firearms and armaments; domestic transportation by land, water, and air; trading of Thai antiques or art objects; mining, including rock blasting and rock crushing; and timber processing for production of furniture and utensils.

A foreign majority-owned company can engage in List 2 activities if Thai nationals or legal persons hold not less than 40 percent of the total shares and the number of Thai directors is not less than two-fifths of the total number of directors.

List 3. Restricted businesses in this list include accounting, legal, architectural, and engineering services; retail and wholesale; advertising businesses; hotels; guided touring; selling food or beverages; and other service-sector businesses.

Thailand does not maintain an investment screening mechanism, but investors could receive additional incentives/privileges if they invest in priority areas, such as high-technology industries.

The U.S. Commercial Service, U.S. Embassy Bangkok, is responsible for issuing a certification letter to confirm that the applicant is qualified to apply for protection under the Treaty of Amity. The applicant must first obtain documents verifying that the company has been registered in compliance with Thai Law. Upon receipt of the required documents, the U.S. Commercial Service office will then certify to the Foreign Administration Division, Department of Business Development, Ministry of Commerce (MOC) that the applicant is seeking to register an American-owned and managed company or that the applicant is an American citizen and is therefore entitled to national treatment under the provisions of the Treaty. For more information on how to apply for protection under the Treaty of Amity, please e-mail:

Other Investment Policy Reviews

The World Trade Organization conducted a Trade Policy Review of Thailand in November 2015. .

Business Facilitation

The MOC’s Department of Business Development (DBD) is generally responsible for business registration, which can be performed online or manually. The legal requirement for the process to be completed in Thai language has caused foreign entities to spend three to six months to complete the process as they typically need to hire a law firm or consulting firm to handle their applications. Firms engaging in production activities also need to register with the Ministry of Industry and the Ministry of Labor and Social Development.

To operate restricted businesses as defined by the FBA’s List 2 and 3, non-Thai entities must obtain a foreign business license, approved by the Council of Ministers (Cabinet) and/or Director-General of the MOC’s Department of Business Development, depending on the business category.

Effective June 9, 2017, the MOC removed certain business categories from FBA’s Annex 3 list, such as regional office services and contractual services provided to government bodies and state-owned enterprises, which contributed to a 4.6 percent drop in foreign business permission requests. The MOC expects the number of applications to rise in 2018 due to Thailand’s improved World Bank Ease of Doing Business ranking and Royal Thai Government (RTG) policies to attract more foreign investment.

American investors who wish to take majority shares or wholly own businesses under FBA’s Annex 3 list may apply for protection under the U.S.-Thai Treaty of Amity.

Americans planning to invest in Thailand are advised to obtain qualified legal advice, especially considering Thai business regulations are governed predominantly by criminal, not civil, law. Foreigners are rarely jailed for improper business activities, but violation of business regulations can carry heavy criminal penalties. Thailand has an independent judiciary and government authorities are generally not permitted to interfere in the court system once a case is in process.

As of March 2018, the MOC’s Department of Business Development has reportedly been working on additional FBA changes, particularly the clarification of the definition of “foreigner” to bring in line with international practices, and possible removal of certain service businesses from FBA’s List 3. The DBD is expected to complete the review by May 2018.

A company is required to have registered capital of two million Thai baht per foreign employee in order to obtain work permits. Foreign employees must enter the country on a non-immigrant visa and then submit work permit applications directly to the Department of Labor. Application processing takes approximately one week. For more information on Thailand visas, please refer to .

On February 1, 2018, the Thai government launched the Smart Visa program for foreigners with technology specializations in ten targeted industries. Foreigners would be granted a maximum four-year visa to work in Thailand without need for work permit and would enjoy relaxed immigration rules for their spouses and children. More information is available at .

Employment applications in Thailand often state a preferred applicant gender and age although Thailand’s Constitution guarantees equality for all persons and prohibits discrimination on 12 specified grounds. Indigenous minorities, such as highlanders, forest dwellers and “sea gypsies” who often lack legal status work more than the general populace in agriculture, home work, and in self-employment micro businesses, which are not fully covered by labor and social security laws.

Outward Investment

Thai companies are expanding and investing overseas, especially in neighboring ASEAN countries to take an advantage of lower cost of production; but also in the United States, Europe and Asia. A stronger domestic currency, rising cash holdings, and subdued domestic growth are helping to drive outward investment. Food, agro-industry, and chemical sectors account for the main share of outward flows. Thai corporate laws allow outbound investments in the form of an independent affiliate (foreign company), as a branch of the Thai legal entity, or by a financial investment abroad from a Thai company. BOI and the MOC’s Department of International Trade Promotion (DITP) share responsibility for promoting outward investment, with BOI focused on outward investment in major countries and the DITP covering smaller markets.

9. Corruption

Thailand has the legal framework and a range of institutions to counter corruption. The Organic Law on Counter Corruption criminalizes corrupt practices of public officials and corporations, including active and passive bribery of public officials. The anti-corruption laws extend to both family members of officials, and to political parties.

Thai laws include the concept of a ‘jointly interested bidder’ that constitutes a conflict of interest. A jointly interested bidder is a natural or juristic person who has an interest, directly or indirectly, in the business of another natural or juristic person who tenders bids for work for the same project. Thai Procurement Regulations prohibit collusion amongst bidders. If an examination confirms allegations or suspicions of collusion among bidders, the names of those applicants have to be removed from the list of competitors.

In December 2016, Thailand adopted its first national government procurement law, based on the UNCITRAL model laws and the WTO Agreement on Government Procurement. The law will apply to all government agencies, local authorities, and state-owned enterprises, and aims to improve transparency. Officials who violate the law will be subject to 1-10 years imprisonment and/or a fine of up to USD 11,000.

Since 2010, the Thai Institute of Directors (IOD) has built an anti-corruption coalition of Thailand’s largest businesses. Coalition members sign the Collective Action Against Corruption Declaration and pledge to take tangible, measurable steps to proactively reduce corruption-related risks that are verified by third party certification. The Center for International Private Enterprise (CIPE) equipped IOD and its coalition partners with an array of tools for training and collective action, based on examples from CIPE’s programs around the world.

The Anti-Corruption Organization of Thailand (ACT) was established in 2011 to pressure the government to create laws that can reduce levels of corruption. ACT has 51 member organizations drawn from the private, public and academic sectors. Their signature program is the “integrity pact.” Drafted by ACT and the Finance Ministry and based on a tool promoted by Transparency International, the pact forbids bribes from signatory members in bidding for government contacts. Member agencies and companies must adhere to strict transparency rules by disclosing bidding information–such as the terms of reference and the cost of the project–easily available to the public.

Thailand is a party to the UN Anti-Corruption Convention, but not the OECD Anti-Bribery Convention.

Thailand’s Witness Protection Act offers protection to witnesses, including NGO’s, who are eligible for special protection measures in anti-corruption cases. Witnesses may request police protection subject to the witness’s consent.

Transparency International’s Corruption Perceptions Index ranked Thailand 96 out of 180 countries in 2017 (1=best; 180=worst). According to some studies, a cultural propensity to forgive bribes as a normal part of doing business and to equate cash payments with finders’ fees or consultants’ charges, coupled with the low salaries of civil servants, encourages officials to accept illegal inducements. U.S. executives with experience in Thailand often advise new-to market companies that it is far easier to avoid corrupt transactions from the beginning than to stop such practices once a company has been identified as willing to operate in this fashion. American firms that comply with the strict guidelines of the Foreign Corrupt Practices Act (FCPA) are able to compete successfully in Thailand. U.S. businessmen say that publicly affirming the need to comply with the FCPA helps to shield their companies from pressure to pay bribes.

Resources to Report Corruption

Contact at government agency or agencies are responsible for combating corruption:

International Affairs Strategy Specialist
Office of the National Anti-Corruption Commission
361 Nonthaburi Road, Thasaai District, Amphur Muang Nonthaburi 11000, Thailand
Tel: +662-528-4800

Contact at “watchdog” organization:
Dr. Mana Nimitmongkol
Secretary General
Anti-Corruption Organization of Thailand
44 Srijulsup Tower, 16th floor, Phatumwan, Bangkok 10330
Tel: +662-613-8863

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The Lessons of 1989: Freedom and Our Future