Executive Summary

Thailand, the second largest economy in the Association of Southeast Asian Nations (ASEAN) after Indonesia, is an upper middle-income country with pro-investment policies and a well-developed and growing infrastructure platform. Since the May 2014 coup, the military has ruled over an interim government, legislature, and other entities tasked with developing and implementing reforms. The country is currently undergoing a royal and political transition following the October 2016 death of the beloved King Bhumibol Adulyadej, who had reigned for 70 years, and the April 6, 2017 promulgation of the country’s 20th constitution, paving the way for elections in 2018. Despite the upheaval, Thailand continues to maintain an open, market-oriented economy and encourages foreign direct investment (FDI) as a means of promoting economic development, employment, and technology transfer. In recent decades, Thailand has been a major destination for FDI, and hundreds of U.S. companies have invested successfully in the Thai economy. Thailand continues to welcome investment from all countries and seeks to avoid dependence on any one country as a source of investment. After the post-coup downturn, continued economic recovery and growth will continue to be important to maintaining investor confidence.

The Foreign Business Act (FBA) of 1999 continues to govern most investment activity by non-Thai nationals. Many U.S. businesses also enjoy investment benefits through the U.S.-Thailand Treaty of Amity and Economic Relations (AER), originally signed in 1833. The Treaty allows U.S. citizens and businesses incorporated in the United States or in Thailand that are majority-owned by U.S. citizens to engage in business on the same basis as Thai companies (national treatment) and exempts them from most restrictions on foreign investment imposed by the Foreign Business Act, although some types of business remain excluded under the Treaty. Notwithstanding their Treaty rights, many U.S. investors also choose to form joint ventures with Thai partners who hold a majority stake in the company, leveraging their partner’s knowledge of the Thai economy and local regulations.

The Thai government maintains a regulatory framework that broadly encourages investment and, with some exceptions, largely avoids market-distorting support for specific sectors, though the process of rule-making is not always transparent. Government policies generally do not restrict the free flow of financial resources to support product and factor markets, and credit is generally allocated on market terms rather than by “directed lending.”

The Board of Investment (BOI) is Thailand’s central investment promotion authority and offers investment incentives uniformly to both qualified domestic and foreign investors through clearly articulated application procedures. BOI in 2014 announced a new strategy to promote foreign direct investment over a seven-year period from 2015-2022, which awards privileges based on the types of projects, emphasizing those that employ high technology. The government is also developing Special Economic Zones, mainly in border areas, which will offer additional tax and non-tax benefits to investors.

In 2016 the government launched a new “Thailand 4.0” strategy as a continuation of the previous “Digital Economy Initiative” to upgrade the country’s technological capacity, foster indigenous creative industries, and develop new engines for growth and innovation to increase competitiveness and lift the economy out of the “middle income trap.” This ambitious plan encompasses many elements across nearly all sectors, from agriculture to robotics, and includes a significant emphasis on developing small and medium enterprises (SMEs) and encouraging public digital learning and literacy to ensure sustainable and inclusive growth. Many of the planned projects could provide ample opportunity for investments in the targeted sectors, such as infrastructure, technology, processed foods, aviation, robotics, and medical/biotechnology.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2016 101 of 175 http://www.transparency.org/
World Bank’s Doing Business Business Report “Ease of Doing Business” 2016 46 of 190 doingbusiness.org/rankings
Global Innovation Index 2016 52 of 128 https://www.globalinnovationindex.org/
U.S. FDI in Partner Country ($M USD, stock positions) 2015 $11,295 http://www.bea.gov/
World Bank GNI Per Capita 2015 $5,720 http://data.worldbank.org/

Policies Towards Foreign Direct Investment

Despite the May 2014 coup and continued rule by an interim military-led government, Thailand continues to maintain an open and market-oriented economy, encouraging FDI as a means of promoting economic development, employment, and technology transfer. In recent decades, Thailand has been a major destination for FDI, and hundreds of U.S. companies have successfully invested in the Thai economy. The country continues to welcome investment from all countries and seeks to avoid dependence on any one country as a source of investment. Economic growth, which slowed after the coup, has recovered to some extent in 2016-17, but structural factors in the economy remain a challenge to long-term growth. Many companies are also carefully considering market factors, including the country’s declining competitiveness relative to other countries in the region, when making future investment decisions.

In the wake of the 1997-98 Asian Financial Crisis, Thailand embarked on an International Monetary Fund (IMF)-sponsored economic reform program designed to foster a more competitive and transparent climate for foreign investors. Legislation in 1999 established a new bankruptcy court, reformed bankruptcy and foreclosure procedures, and allowed creditors to pursue payment from loan guarantors. Other 1999 reforms include amendments to the Land Code, Condominium Act, and the Property Leasing Act, all of which liberalized restrictions on property ownership by non-Thais, and passage of the Foreign Business Act (FBA).

Foreign companies are free to open and maintain bank accounts in foreign currency. However, Thailand retains, to some extent, investment control, as under certain circumstances, foreign investors that were previously granted national treatment are subject to some reservations, particularly in the service sector.

Limits on Foreign Control and Right to Private Ownership and Establishment

According to the Foreign Business Act 1999 (FBA), certain types of business activities are reserved for Thai nationals only. Foreign investment in those businesses must comprise less than 50 percent of share capital, unless specially permitted or otherwise exempt. While there have been some changes to List 3, there are no amendments to the FBA planned.

The following three lists, attached as annexes to the FBA, detail restricted businesses for foreigners:
List 1. This contains activities prohibited to non-nationals, including:

  • Newspaper or radio broadcasting stations and radio and television station businesses
  • Rice farming and growing plantations or crops
  • 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
  • Land trading

List 2. This contains activities related to national safety or security, or those which affect arts and culture, tradition, folk handicrafts, or natural resources and the environment. Among other things, they include:

  • 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.
  • Timber processing for production of furniture and utensils.

Note: 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.

Exceptions are those which receive:

  • Permission from the Minister of Commerce with approval by the Cabinet (if there is a reasonable cause, the Minister, with the approval of the Cabinet, may reduce the Thai shareholding requirement, which cannot be less than 25 percent of the total shares)
  • Investment promotion from the Board of Investment
  • Authorization by the Industrial Estate Authority of Thailand
  • Permission under a treaty to which Thailand is bound

List 3. This contains activities in which there are economic protections for Thai nationals. Among other things, they include:

  • Accounting, legal, architectural, or engineering services
  • Retail and wholesale
  • Advertising businesses
  • Hotels
  • Guided touring
  • Selling food or beverages
  • Any kind of service business

There are exceptions to List 3 for those which receive the following:

Permission from the Director-General of the Department of Business Development at the Ministry of Commerce, with approval by the Foreign Business Committee, on obtaining a Foreign Business License.

Investment promotion from the Board of Investment or from the Industrial Estate Authority of Thailand, on obtaining a Foreign Business Certificate from the Director-General of the Department of Business Development at the Ministry of Commerce.

Protection under a treaty or obligation to which Thailand is bound, including: US Treaty of Amity and Economic Relations; Thai-Australia Free Trade Agreement (TAFTA); Japan-Thailand Economic Partnership Agreement (JTEPA); and ASEAN Framework Agreement on Services (AFAS), on obtaining a Foreign Business Certificate from the Director-General of the Department of Business Development at the Ministry of Commerce.

Further restrictions on foreign ownership in specific sectors, such as telecommunications, banking, or insurance, are regulated in specific laws pertaining to these sectors, such as the Telecommunications Business Act (2006), the Financial Institution Business Act (2008), the Life Insurance Act (1992), and the Non-Life Insurance Act (1992).

The U.S.-Thai Treaty of Amity and Economic Relations of 1833, commonly referred to as the Treaty of Amity, is a special economic relationship between the U.S. and the Thailand that gives special rights and benefits to U.S. citizens who wish to establish their businesses in Thailand. The Treaty of Amity was amended in 1966 and provides two major benefits:

American companies are permitted to maintain a majority shareholding or to wholly own its company, branch office, or representative office located in Thailand.

American companies receive national treatment, meaning U.S. firms may engage in business on the same basis as Thai companies, and are exempt from most of the restrictions on foreign investment imposed by the Alien Business Law of 1972.

Despite the Treaty of Amity, there are still certain restrictions on U.S. investment as follows:

  • Land ownership
  • Engaging in inland transportation and communication industries
  • Engaging in fiduciary functions
  • Engaging in banking involving depository functions
  • Engaging in domestic trade in indigenous agricultural products
  • Exploiting land or other natural resources

The U.S. Commercial Service, which operates from the U.S. Embassy Bangkok, is responsible for issuing a certification letter to confirm that the U.S. business 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 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: ktantisa@trade.gov.

Other Investment Policy Reviews

The World Trade Organization (WTO) conducted a Trade Policy Review of Thailand in November 2015. Information is available on the WTO website .

Business Facilitation

Any entity wishing to do business in Thailand must register with the Department of Business Development at the Ministry of Commerce, which generally takes three to six months to complete. Online business registration is only minimally functional and the forms are in Thai; therefore, foreigners typically hire a local law firm or consulting firm to handle their applications. Firms engaging in production activities need to register with the Ministries of Industry and Labor and Social Welfare. The majority of the manufacturing activities do not restrict foreign ownership. The World Bank’s 2016 Ease of Doing Business Report ranks Thailand 18 of 190 countries globally for the ease of Registering a Business. The process takes at least 25 days and includes five separate procedures.

If the entity non-Thai national and wishes to operate restricted businesses as defined by the Foreign Business Act, it must obtain a foreign business license, which must be approved by the Council of Ministers (Cabinet) or Director-General of Department of Business Development at the Ministry of Commerce, depending on the applicable category of restricted business.

Effective February 11, 2016, the Department Business Development (DBD) of the Ministry of Commerce removed four categories from the List 3 of the Foreign Business Act: commercial banking, bank representative offices, life insurance, and property and casualty insurance. Businesses in these sectors will no longer have to seek operating licenses from the DBD, as they are subject to specific banking laws and regulations of the Bank of Thailand and the Office of Insurance Commission, respectively. The aim is to reduce the number of redundant laws and regulations and to promote foreign businesses in Thailand.

American investors who wish to take majority shares or wholly own businesses under the Annex 3 list of the Foreign Business Act, may apply for protection under the U.S.-Thai Treaty of Amity. For more information, visit the U.S. Commercial Service’s website .

Prospective U.S. investors are advised to obtain qualified legal advice. Such advice is particularly important given that Thai business regulations are governed predominantly by criminal, not civil, law. While foreigners are rarely jailed for improper business activities, violation of Thai 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.

Below are the main types of business structures that are set up by U.S. companies in Thailand:

  • Partnership: Thai and Western concepts of partnership are broadly similar. Thailand provides for three general types of partnerships: unregistered ordinary partnerships, registered ordinary partnerships and limited partnerships.
  • Limited companies: There are two types of limited companies; private companies, which are governed by the Civil and Commercial Code, and public companies, which are governed by the Public Company Act.
  • Private Limited Companies: A private limited company is formed through a process which leads to the registration of a Memorandum of Association (Articles of Incorporation) and Articles of Association (By-laws), as its constitutive documents – a process similar to that of Western corporations. A minimum of seven shareholders is required at all times. A private limited company may be wholly owned by aliens; however, in those activities reserved for Thai nationals, foreign participation is generally allowed up to a maximum of 49 percent. The registration fee for a private limited company is 5,500 baht per million baht of capital, or approximately $157 per $28,571 of capital.
  • Public Limited Companies: These companies, subject to compliance with the prospectus, approval, and other requirements, may offer shares, debentures and warrants to the public, and may apply to have their securities listed on the Stock Exchange of Thailand (SET). A minimum of 15 promoters is required for the formation and registration of the memorandum of association of a public limited company, and the promoters must hold their shares for a minimum of two years before they can be transferred. The Board of Directors of a public limited company must have a minimum of five members, at least half of whom are Thai nationals. The registration fee is 2,000 baht per million baht of capital (approximately $35 per $28,571 of capital) for a public limited company.
  • Joint Venture: A joint venture may be described in accordance with general practice as a group of persons (natural and/or juristic) entering into an agreement in order to carry on a business together. It has not yet been recognized as a legal entity under the Civil and Commercial Code. However, income from a joint venture is subject to corporate taxation under the Revenue Code, which classifies it as a single entity.

Representative Office: A representative office is limited to engaging in non-profit activities. In order to form a representative office, at least one of the following purposes would need to be sought for the purposes of limited “non-trading” activities:

  • To search for a source of goods or services in Thailand for the headquarters overseas
  • To check the quality and quantity of a product ordered by the headquarters overseas
  • To give advice to headquarters about goods to order
  • To supply information about headquarters’ products to customers in Thailand
  • To report economic movement in Thailand to headquarters

Steps to Establishing a Company

  • Step 1: Corporate Name Reservation

The name must be reserved, and must not be the same as or similar to that of other companies. Certain names are not allowed, as detailed in the name reservation guidelines issued by the Business Development Office of the Ministry of Commerce. The approved corporate name is valid for 30 days. No extension is allowed.

  • Step 2: Filing of Memorandum of Association

A Memorandum of Association to be filed with the Business Development Office must include the name of the company that has been successfully reserved, the province where the company will be located, its business objectives, the capital to be registered, and the names of the seven promoters. The capital information must include the number of shares and the par value. Although there are no minimum capital requirements, the amount of capital should be respectable and adequate for the intended business operation.

  • Step 3: Convene a Statutory Meeting

Once the share structure has been defined, a statutory meeting is called, during which the articles of incorporation and bylaws are approved, the Board of Directors is elected, and an auditor appointed. A minimum of 25 percent of the par value of each subscribed share must be paid.

  • Step 4: Registration

Within three months of the date of the Statutory Meeting, the directors must submit an application to establish the company. Company registration fees are 500 baht per 100,000 baht of registered capital. The minimum fee is 5,000 baht; the maximum is 250,000 baht.

  • Step 5: Tax Registration

Businesses liable for income tax must obtain a tax I.D. card and number for the company from the Revenue Department within 60 days of incorporation or the start of operations. Business operators earning more than 600,000 baht per annum must register for VAT within 30 days of the date they reach 600,000 baht in sales.

For a private or public limited company, if 50 percent or more of the company’s shares are owned by a foreigner, the company will be considered foreign and subject to the Foreign Business Act, which prohibits the operation of certain business activities unless approvals are obtained from the Ministry of Commerce (MOC). Foreign investors usually carry on business through a limited company, branch or representative office.

The most frequently utilized type of legal entity in Thailand is the limited-company, which is similar in structure to the Limited Liability Company (LLC) in the United States. A limited-company is owned by a minimum of three shareholders and managed by at least one director. It has the advantage of being a stand-alone company under Thai law.

As for company registration in Thailand, it is important to be aware that at least 51 percent of a company’s shares must be held by Thai citizens, except as allowed by the aforementioned Treaty of Amity. The remaining shares may be held by foreigners. In spite of this, it is still possible for a foreigner to maintain controlling interest in a company by issuing two separate classes of shares: ordinary and preferred. Shareholders with ordinary shares have more voting rights in the company. At least one director is chosen by the shareholders. Only the director(s) is authorized to sign anything on behalf of the company, and individual shareholders are only liable for their percentage of shares.

A company is required to have registered capital of two million Thai baht per foreign employee in order to obtain work permits. For example, a company with two non-Thai employees is required to have a registered capital of at least four million Thai baht (approximately USD $116,600). Foreign employees must enter 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 the website  of Ministry of Foreign Affairs.

According to the Institute for Small and Medium Enterprises Development of the Ministry of Industry, small and medium enterprises are defined as follows:

Production and Service Sectors:

Medium: fixed assets not over 200 million Thai Baht (approximately USD $5.8 million); fewer than 200 employees

Small: fixed assets not over 50 million Thai Baht (approximately USD $1.45 million); fewer than 200 employees

Trading Sector:


Wholesale: fixed assets not over 100 million Thai Baht (approximately USD $2.91 million); fewer than 50 employees

Retail: value of fixed assets not over 60 million Thai Baht (approximately USD $1.74 million); fewer than 50 employees


Wholesale: fixed assets not over 50 million Thai Baht (approximately USD $1.45 million); fewer than 25 employees

Retail: fixed assets not over 30 million Thai Baht (approximately USD $875,000); fewer than 15 employees

In an effort to narrow the gap between SMEs and large corporations, Thai government agencies give certain incentives, such as tax breaks, to SMEs with Thai majority shareholding and large corporations that assist them with services such as loans or accounting advice.

Outward Investment

Thai companies have been successfully expanding and investing overseas, including in the U.S., but especially in neighboring countries such as Laos. The responsibility for promoting outward investment within the Thai government is currently split between the Board of Investment and the Ministry of Commerce’s Department of International Trade Promotion (DITP), with the BOI focusing on outward investment in major countries, and the DITP covering the rest. There is discussion of possibly dividing responsibilities along manufacturing and non-manufacturing lines in the future.

The 1966 iteration of the U.S.-Thai Treaty of Amity and Economic Relations (AER) allows U.S. citizens and businesses incorporated in the U.S. or in Thailand that are majority-owned by U.S. citizens, to engage in business on the same basis as Thai nationals. Under the AER, Thailand is permitted to apply restrictions to U.S. investments only in the fields of communications, transport, banking, the exploitation of land or other natural resources, and domestic trade in agricultural products.

In October 2002, the U.S. and Thailand signed a bilateral Trade and Investment Framework Agreement (TIFA). The TIFA establishes a Trade and Investment Joint Council (TIJC), which serves as a forum for discussion of bilateral trade and investment issues such as intellectual property rights, customs, investment, biotechnology, and other areas of mutual concern.

Thailand has signed Bilateral Investment Treaties (BIT) with: Argentina, Bahrain, Bangladesh, Belgium-Luxembourg Economic Union, Bulgaria, Cambodia, Canada, China, Croatia, Czech Republic, Egypt, Finland, Germany, Hong Kong, Hungary, India, Indonesia, Israel, Jordan, Democratic People’s Republic of Korea, Republic of Korea, Lao People’s Democratic Republic, Myanmar, Netherlands, Peru, Philippines, Poland, Romania, Russian Federation (signed, not in force), Slovenia, Sri Lanka, Sweden, Switzerland, Taiwan, Tajikistan (signed, not in force), Turkey, United Kingdom, Vietnam, and Zimbabwe (signed, not in force). Thailand is a member of the Regional Comprehensive Economic Partnership (RCEP), currently under negotiation, which may include investment provisions.

Thailand has had a bilateral tax treaty with the U.S. since 1996. Thailand signed the U.S.-Thailand Foreign Account Tax Compliance Act on March 4, 2016. Enacting legislation is currently before the National Legislative Assembly, and is expected to come into force in late 2017.

Transparency of the Regulatory System

Since the May 2014 coup and installation of the military-led government and legislature, investors have noted a marked lack of transparency in the rule-making process across a broad range of sectors. There have been many examples in the past three years of laws being drafted in line ministries with little or no input from stakeholders, particularly international investors. In some cases, laws have been passed quickly through the “rubber stamp” legislature, or ministries have issued sudden notifications directed through the use of the Prime Minister’s authority under Article 44 of the interim constitution. Foreign investors have, on occasion, expressed frustration that draft regulations are not made public until they are finalized, and that on occasion when they can submit comments, they are not taken into consideration. Non-governmental organizations are actively consulted by the government on policy related to pharmaceuticals, alcohol, infant formula, and meat imports, especially within the health sphere. In other areas, such as digital and cybersecurity laws, there have been instances in which public outcry over leaked government documents has led to withdrawal and review of proposed legislation.

U.S. businesses have repeatedly expressed concern about the lack of transparency in the Thai customs regime and the significant discretionary authority exercised by Customs Department officials. The U.S. government and private sector have also expressed concern about the inconsistent application of Thailand’s transaction valuation methodology and repeated use of arbitrary values by the Customs Department. In March 2017, the National Legislative Assembly passed a long-awaited amendment to the Customs Act, but the final law does little to reduce the issue of direct monetary “reward” payments to customs officials based on the amount of duties and fees owed. Thailand submitted its acceptance of the protocol for the WTO Trade Facilitation Agreement in October 2015 and the agreement entered into force in February 2017, but the customs penalty and reward scheme has not been addressed in Thailand’s commitments thus far.

The lack of consistent and predictable enforcement of government regulations remains problematic for investment in Thailand, and has been a notable problem in the realm of intellectual property rights protection, as described in the U.S. Trade Representative’s annual Special 301 report. Gratuity payments to civil servants responsible for regulatory oversight and enforcement remain a common practice. Firms that refuse to make such payments can be placed at a competitive disadvantage when compared to other firms in the same field.

International Regulatory Considerations

Thailand is a member of the WTO and notifies most draft technical regulations to the Technical Barriers to Trade (TBT) Committee, and, to a lesser extent, the Sanitary and Phytosanitary Measures (SPS) Committee. Thailand does not always follow WTO or other international standard setting norms or guidance, preferring to set its own standards in many cases. On agricultural issues, Thailand often seems to use the European system.

Legal System and Judicial Independence

Thailand has a civil code, commercial code, and a bankruptcy law. Monetary judgments are calculated at the market exchange rate. Decisions of foreign courts are not accepted or enforceable in Thai courts. Disputes such as the enforcement of property or contract rights have generally been resolved through the Thai courts. Thailand has an independent judiciary that is generally effective in enforcing property and contractual rights. However, the legal process is slow in practice, and litigants or third parties sometimes affect judgments through extra-legal means.

There are three levels to the judicial system in Thailand: the Court of First Instance, which handles most matters at inception, the Court of Appeals, and the Supreme Court. There are specialized courts such as the Labor Court, Family Court, Tax Court, the Central Intellectual Property and International Trade Court, and the Bankruptcy Court.

Thailand has recently established the new Specialized Appeal Courts to handle appeals from specialized courts. Previously, all specialized cases were appealed directly to the Supreme Court, but now the Supreme Court has discretion over whether to take a case that has been decided by the Specialized Appeal Court. If the Supreme Court decides not to take up a case, the decision of the Specialized Appeal Court stands.

Laws and Regulations on Foreign Direct Investment

The Foreign Business Act (FBA) of 1999 continues to govern most investment activity by non-Thai nationals. In 2016, the FBA opened some additional business sectors to foreign investment; however, foreign investment in most service sectors is limited to 49 percent ownership. Other key laws governing foreign investment are the Alien Employment Act B.E. 2521 (1978) and the Investment Promotion Act B.E. 2520 (1977).

Many U.S. businesses enjoy investment benefits through the U.S.-Thailand Treaty of Amity and Economic Relations (AER), originally signed in 1833. The 1966 iteration of the Treaty allows U.S. citizens and businesses incorporated in the United States, or in Thailand that are majority-owned by U.S. citizens, to engage in business on the same basis as Thai companies (national treatment), exempting them from most restrictions on foreign investment imposed by the Foreign Business Act.

The Financial Institutions Business Act, passed at the end of 2007, unified the legal framework and strengthened the Bank of Thailand’s (the country’s central bank) supervision and enforcement powers. The Act gave power to the Bank of Thailand to raise foreign ownership limits for existing local banks from 25 percent to 49 percent on a case-by-case basis. The Act also allows the Minister of Finance to authorize foreign ownership above 49 percent if recommended by the central bank. Further details are available on the Bank of Thailand website .

Apart from acquiring shares of existing local banks, foreign banks can enter the Thai banking system by obtaining new licenses from the central bank and the Ministry of Finance.

The 2008 Life Insurance Act and the 2008 Non-Life Insurance Act apply a 25 percent cap on foreign ownership of insurance companies and on foreign boards of directors. However, in January 2016 the Office of the Insurance Commission (OIC, the primary regulator) provided notification that any Thai insurance company wishing to have one or more foreigners holding more than 25 percent (but no more than 49 percent) of its total voting shares, or to have foreigners comprising more than a quarter (but less than half) of its total directors, may apply for approval by the OIC for both life and non-life insurance companies. Meanwhile, any foreign national who wishes to hold more than 10 percent of the voting shares in an insurance company must seek approval from the OIC. With approval of the OIC, a foreign national can acquire up to 49 percent of the voting shares. Any foreign shareholder holding more than ten percent of the voting shares prior to the effective date of the notification is grandfathered in and may maintain their current shareholding, but must obtain OIC approval to further increase shareholding. The OIC’s latest notification (in Thai language only) is posted on the OIC’s website .

In addition, the Finance Minister, on the recommendation of the OIC, has discretion to permit greater than 49 percent foreign ownership and a majority of foreign directors, only where the operation of the insurance company may cause loss to insured parties or to the public.

More information on Thailand’s “One Start One Stop” investment center is available on their website . Investors in Thailand can visit the physical office, located on the 18th floor of Chamchuri Square, on Rama 4/Phayathai Road in Bangkok.

Competition and Anti-Trust Laws

In 1999, Thailand enacted the Trade Competition Act, together with the Price of Goods and Services Act, to strengthen the government’s ability to regulate market monopolies and price fixing. The Trade Competition Act applies to all business activities with the exception of state-owned enterprises, cooperatives, agricultural and cooperative groups, government agencies, and certain enterprises exempted by the law. The law established a Trade Competition Commission with the authority to place limitations on market share and revenues of firms with substantial control of individual market sectors, to block mergers, and other forms of business combinations, and to levy fines for price fixing and other proscribed activities. Since the law’s implementation, several foreign motorcycle distributors were found guilty of violating the law by forcing sales agencies to sell only their brands.

A draft amendment to the Trade Competition Act is currently under consideration in the National Legislative Assembly and is expected to enter into force in 2017. Under the draft law, the office of Trade Competition Commission (OTCC) will become an independent agency and the main enforcer of the new Act. The OCTT is comprised of seven members subject to Cabinet approval, with the Prime Minister replacing the Minister of Commerce as the chair. The draft law will apply to state-owned enterprises, except those state-owned enterprises that are required by law or government policies related to national security, public benefit, common interest and public utility. Major areas of focus under the new laws include: unlawful exercise of market dominance; mergers or collusions that could lead to monopoly, unfair competition and restricting competition; and unfair trade practices. Merger control thresholds will be stated in notification and regulations which will be issued after the draft law has come into force.

The draft broadens the definition of a business operator to include affiliates and group companies, and broadens the liability of directors and management to be subject to criminal and administrative sanction if their actions (or omissions) resulted in violation. The penalty under the Act is also increased, and failure to comply with the provisions in the Act may result in a jail terms of up to six years and/or fines not exceeding twelve million baht (USD $343,000). The penalty may be doubled in cases of repeated offenses. Many observers see the draft amendment as a potential improvement that is more closely aligned with international standards.

The government continues to have the authority to control the price of specific products under the Price of Goods and Services Act. The Department of Internal Trade under the Ministry of Commerce administers this law and interacts with the affected companies, though only the Committee on Prices of Goods and Services makes the final decision on what products to add or remove from price controls. As of January 2017, out of 47 controlled commodities and services, only sugar is subject to a price ceiling. Aside from these 47 controlled commodities, raising the prices of practically any consumer products is prohibited without first notifying the Committee. The government also uses its controlling stakes in major suppliers of products and services such as Thai Airways and PTT to influence prices in the market. Thailand has extensive legislation aimed at the protection of the environment, including the National Environmental Quality Act, the Hazardous Substances Act, and the Factories Act. Food purity and drug efficacy are controlled and regulated by a Food and Drug Administration with authority similar to its U.S. counterpart. Likewise, labor and employment standards are set and administered by the Ministry of Labor.

Expropriation and Compensation

Private property can be expropriated for public purposes in accordance with Thai law, which provides for due process and compensation. In practice, this process is seldom used and has been principally confined to real estate owned by Thai nationals and needed for public works projects. U.S. firms have not reported any problems with property appropriation in Thailand; however, the Embassy has received reports of conflicts over land title authenticity in areas that the government has designated as national park land.

Dispute Settlement

ICSID Convention and New York Convention

Thailand is a signatory to the New York Convention, and enacted its own rules on conciliation and arbitration in the Arbitration Act of 2002. Thailand signed the Convention on the Settlement of Investment Disputes (ICSID) in 1985, but has not yet ratified the Convention.

Investor-State Dispute Settlement

There have been several notable cases of investor-state disputes in recent years. In 2003, the Civil Court of Thailand upheld a 6.2 billion baht (USD $190.4 million) international arbitration award against the Expressway and Rapid Transit Authority of Thailand (ETA, a Thai government agency), in favor of Bangkok Expressway, PLC (a Thai-foreign joint venture company). In 2009, Walter Bau AG (a foreign contractor) was awarded approximately 30 million Euros in an international arbitration case regarding construction of the Don Muang tollway. Subsequently, the Thai Cabinet issued a resolution prohibiting the inclusion of arbitration in public-private contracts without prior approval by the Cabinet. Since then, the Cabinet has granted approval in several cases for an arbitration clause to be included in contracts. Local law firms allege that Thai courts have refused, in some instances, to enforce international arbitration awards based on interpretations which are not in keeping with international norms.

International Commercial Arbitration and Foreign Courts

Thailand’s national Arbitration Act of 2002, which was modeled in part after the United Nations Commission on International Trade Law (UNCITRAL) Model law, governs domestic and international arbitration proceedings and states that “in cases where an arbitral award was made in a foreign country, the award shall be enforced by the competent court only if it is subject to an international convention, treaty, or agreement to which Thailand is a party.” The Thai Arbitration Institute of the Alternative Dispute Resolution Office, Office of the Judiciary, and the Office of the Arbitration Tribunal of the Board of Trade of Thailand provide arbitration services to proceedings held within Thailand. In addition, the semi-public Thailand Arbitration Center offers mediation and arbitration for civil and commercial disputes. There are only very limited circumstances under which a court can set aside an arbitration award. Thailand does not have a BIT or a Free Trade Agreement (FTA) with the United States.

Bankruptcy Regulations

Thailand’s bankruptcy law allows for corporate restructuring similar to U.S. Chapter 11, and does not criminalize bankruptcy. While bankruptcy is under consideration, creditors can request the following ex parte applications from the court: an examination by the receiver of all assets of the debtor and/or that the debtor attend questioning on the existence of assets; a requirement that the debtor provide satisfactory security to the court; and immediate seizure of the debtor’s assets and/or evidence in order to prevent the loss of destruction of such items. The World Bank’s 2016 Ease of Doing Business report ranks Thailand 23 of 190 countries globally for the ease of resolving insolvency, with the process taking approximately 1.5 years.

The law stipulates that all applications for repayment must be made within one month after the Court publishes the appointment of an official receiver. If a creditor eligible for repayment does not apply within this period, he forfeits his right to receive payment or the Court may cancel the order to reorganize the business. Receivers may only claim repayment on debts that occurred before the Court issued the reorganization order, regardless of whether the debt has matured or is conditional. For debts incurred between the time of the Court issued reorganization order and appointment of a receiver, creditors do not need to apply for repayment, but must officially ask the receiver in writing for the claim prior to the meeting to discuss the plan. As for the actual repayment of debts, the receiver may authorize payments. However, only debts that have not been opposed by the official receiver, the other creditors, or the debtor may be repaid. If any person opposes a filing, the receiver shall investigate the matter and approve, partially approve, or dismiss the application. Any objections to the orders issued by the receiver may be filed with the Court within 14 days after learning of the issued order.

Investment Incentives

The Board of Investment (BOI), established by the Investment Promotion Act of 1977, is Thailand’s central investment promotion authority. The BOI offers investment incentives uniformly to both qualified domestic and foreign investors with a clear articulation of the application procedures. Good governance is one of the key factors to manage and supervise the application for tax and duty privileges. Complete information on BOI’s updated policies, programs, incentives, and application procedures can be found on the BOI website .

Effective January 1, 2015, the BOI launched a new investment incentive policy that gives preferential benefits to investment projects based on the level of technology involved in the activities. Firms employing a high level of advanced technologies qualify for the maximum incentive package, including an eight-year exemption from corporate income taxes, while activities that do not employ advanced technology, but are nevertheless still important to the supply chain, no longer receive any exemption. All companies may be eligible for other privileges if they engage in activities otherwise considered valuable, such as R&D, advanced technology training, or acquiring licenses to commercialize technology.

Two of the most significant privileges offered by the BOI for promoted projects are:

Tax privileges, such as corporate income tax exemption, tariff exemption, reduction on import machinery and tariff exemption, or reduction on imported raw material

Non-tax privileges, such as permission to own land, permission to bring foreign experts to work on the promoted projects, exemption on foreign ownership of companies, and exemption from work permits and visa rules.

The Thai government in 2016 launched a new “Thailand 4.0” strategy as a continuation of the previous “Digital Economy Initiative” to upgrade the country’s technological capacity, foster indigenous creative industries, and develop new engines for growth and innovation to increase competitiveness and lift the economy out of the “middle-income trap.” This ambitious plan encompasses many elements across nearly all sectors, from agriculture to robotics, and includes a significant emphasis on developing SMEs and encouraging public digital learning and literacy to ensure sustainable and inclusive growth. As part of Thailand 4.0, the government has introduced new industrial policies to support the development of five new industries and upgrade five existing industries as follows:

New Industries:

  • Robotics
  • Medical hub
  • Aviation industry
  • Bioeconomy
  • Digital

Existing Industries:

  • Modern automotive
  • Smart electronics
  • High-income tourism and healthcare tourism
  • Agricultural and biotechnology
  • Food processing

These policies will be used to develop a new industrial area called the “Eastern Economic Corridor” (EEC), spanning the three provinces of Chachengsao, Chonburi, and Rayong, which will be built on the existing Eastern Seaboard industrial area that has been an investment destination for 30 years. The Thai government’s objective is to establish the EEC as the primary investment and infrastructure hub in ASEAN, serving as a central gateway to East Asia and to South Asia. The current EEC plans call for the creation of new, smart cities, a digital park, a data center, and new facilities for next generation automotives, aviation, robotics, and smart electronics. During the course of 2017, the government plans to launch five high priority projects in the EEC including upgrading U-Tapao airport; building a high-speed rail between U-Tapao, Don Muang, and Suvarnabhumi airports; commencing bidding for the third phase of expansion at Laem Chabang Port; working to identify investors for the target industries; and identifying the location of the new smart city. The entire EEC development project is estimated to cost $43 billion over the first five years, with 20 percent coming directly from government funding, and the remaining 80 percent through public-private partnerships.

The EEC Act is expected to pass this year, and will provide for numerous investment incentives and privileges. Investors will be able to access long-term land leases (50+49 years), and the PPP approval process will be shortened to three months. The Board of Investment will offer up to 15 years corporate income tax exemption for strategic projects in the EEC. There will be a 17 percent maximum personal income tax for investors, managers, and experts who are employed by companies in target industries with headquarters and facilities situated in the EEC. Investment projects with a significant R&D, innovation, or human resource development component may be eligible for additional grants and incentives.

Foreign Trade Zones/Free Ports/Trade Facilitation

The Industrial Estate Authority of Thailand (IEAT), a state-enterprise under the Ministry of Industry, established the first industrial estates in Thailand, including Laem Chabang Industrial Estate in Chonburi Province (eastern) and Map Ta Phut Industrial Estate in Rayong Province (eastern). Foreign owned firms have the same investment opportunities as Thai entities, but the IEAT Act requires the IEAT Committee to consider and approve the amount of space/land a foreign owned firm plans to buy or lease in industrial estates. In practice, there is no record of disapproval for the requested amount of land. Private developers have become heavily involved in the development of these estates. The IEAT currently operates 9 estates, plus 39 more in conjunction with the private sector in 15 provinces nationwide. Private sector developers operate over 50 industrial estates, most of which have received promotion privileges from the Board of Investment.

The IEAT established 12 special IEAT Free Zones (renamed from export processing zones or free trade zones), reserved for the location of industries manufacturing for export only, to which businesses may import raw materials and export finished products free of duty (including value added tax). These zones are located within industrial estates, and many have customs facilities to speed processing. The free trade zones are located in Chonburi, Lampun, Pichit, Songkhla, Samut Prakarn, Bangkok (at Lad Krabang), Ayuddhya, and Chachoengsao. In addition to these zones, factories may apply for permission to establish a bonded warehouse within their premises to which raw materials, used exclusively in the production of products for export, may be imported duty free.

In addition, Thailand is increasingly focusing on trade with neighboring countries to improve trade and investment, and is establishing Special Economic Zones (SEZs) in many provinces including Tak, Nong Khai, Mukdahan, Sa Kaeo, Trad, Narathiwat, Chiang Rai, Nakhon Phanom, and Kanchanaburi. Business sectors and industries that might benefit from incentives offered in the SEZs include logistics, warehouses near border areas, distribution, services, tourism, labor-intensive factories, and manufacturers using raw materials from neighboring countries.

Performance and Data Localization Requirements

Performance Requirements

The employment of foreigners is governed by the Foreign Employment Act and the Foreign Business Act. Both laws set employment preferences in favor of Thai nationals. Though requirements may vary, generally, employers must hire four Thais for every one foreign employee. Without exception, foreign private sector employees require work permits, which are granted by the Ministry of Labor. When considering whether to grant a work permit, the Ministry considers:

  • Whether the job could be done by a Thai employee
  • Whether the foreigner is qualified for the job
  • Whether the job fits the present economic needs of the Kingdom

Different requirements apply to companies promoted by the BOI, which typically result in greater flexibility and ease in obtaining work permits for foreign nationals.

Such schemes apply equally to senior management and boards of directors. According to the Foreign Business Act, if a foreigner is the managing partner or the manager, the company is subject to the restrictions applicable to foreign businesses and the Foreign Business License application.

Requirements to obtain visas, residency permits, or work permits are not excessively onerous as to inhibit the mobility of foreign investors and their employees.

Thai law requires foreign workers to have a work permit issued by the Ministry of Labor in order to work legally in Thailand; Thai law also reserves 39 occupations for Thai workers and will not grant work permits for foreigners to engage in these occupations, including lawyers, architects, and civil engineers. Foreigners found to be working without work permits could be imprisoned up to five years and/or fined between 2,000 and 100,000 Thai baht (approximately USD $60 to USD $3,000).

Factors that influence the granting of work permits include the degree of specialization required by the position, the size of the firm in terms of number of employees and registered capitalization, and the ratio of Thai nationals to foreigners employed by the firm. Foreigners working for the Thai government or working on projects promoted by the BOI usually have little difficulty obtaining work permits and typically receive their permits within seven days of application. Work permits in other areas are sometimes difficult to obtain. The duration of work permits is generally tied to the length of stay permitted by the person’s visa.

U.S. citizens can enter Thailand without a visa for visits of up to thirty days. In order to apply for a work permit, a foreigner must enter Thailand on a non-immigrant visa (issued at Thai embassies and consulates) for a stay of three months or, for foreigners with well-defined work or business plans, for a stay of one year. Issuance of the three-month visa is usually completed within two or three days; the one-year visa requires approval from the Immigration Bureau of the Royal Thai Police in Bangkok. Upon obtaining a work permit, a holder of a three-month visa may apply for a one-year visa, which generally can be extended every year. Foreigners holding nonimmigrant visas who have lived in Thailand for at least three consecutive years may apply for permanent residence in Thailand if they meet strict criteria regarding investment or professional skills.

Despite the fact that Thailand generally welcomes foreign investment, some sectors are subject to foreign equity restrictions, as described in earlier sections. Exceptions from the restrictions of the Foreign Business Act can be granted as promotional privileges by the BOI or IEAT, or, as a temporary measure, in the form of government approval issued by the Thai government.

Exceptions can also be provided based on international treaties Thailand has entered into. U.S. companies or nationals under the Treaty of Amity and Economic Relations between Thailand and the U.S. (Treaty of Amity) can be eligible for “national treatment,” where, with some exceptions, they are treated in the same way as Thai nationals. Other international treaties, such as the Thai-Australia Free Trade Agreement (TAFTA), the Japanese Thai Economic Partnership Agreement (JTEPA) or the ASEAN Comprehensive Investment Agreement (ACIA), also provide for exceptions, but these have mostly not yet been implemented under Thai laws.

Under the laws regulating exceptions from foreign investment restrictions, the authorities issuing such exceptions have been provided with bureaucratic discretion as to whether the exception will be granted.

Localization Requirements

The Thai government does not currently have any specific statutory law governing “forced localization” policies in which foreign investors must use domestic content in goods or technology, though use of domestic content receives additional preference in procurement. There are currently no requirements for foreign IT providers to turn over source code and/or provide access to surveillance; however, the Thai government is in the process of drafting new laws and regulations on cybersecurity and personal data protection that may affect all businesses and consumers in Thailand. Thailand is also implementing a new requirement that debit transactions utilize the services of a domestic debit card network. The Thai government has said there are no plans to extend this requirement to credit cards. Regarding Thailand’s import permitting process for several agricultural products, there are separate domestic absorption rate requirements to purchase local product at fixed prices.

Real Property

According to the Thai laws, foreigners are not allowed to own land in Thailand. If they are interested in owning a real estate, they can purchase unit of apartments or condo as long as at least 51 percent of the building is owned by Thais. Property rights are guaranteed by the Constitution against being condemned or nationalized without fair compensation. Secured interests in property are recognized and enforced. Thailand has a civil law system under which all laws are embodied in statutes or codes promulgated by the government. This practice is in contrast to the common law system in many Western countries, where court interpretations of statutes serve as governing legal precedent. There is an independent judiciary that provides a forum for settlement of disputes. Agencies of the government, as parties to commercial contracts, may be sued in the courts, and cannot raise a defense of sovereign immunity. However, state property is not subject to execution. There are four basic codes: Civil and Commercial Code, Criminal Code, Civil Procedure Code, and the Criminal Procedure Code. Decisions and rulings of the judiciary and civil service can have considerable force as precedents.

Intellectual Property Rights
Widespread commercial intellectual property (IP) counterfeiting and piracy continue to plague intellectual property rights (IPR) owners in Thailand. The lack of sustained, proactive, and coordinated enforcement and prosecution remains a substantial problem. While online and mobile device piracy has increasingly overtaken physical content piracy, counterfeit and pirated products are still readily accessible and widespread throughout the country in the retail marketplace.

In 2007, Thailand was placed on the U.S. Trade Representative’s (USTR) Special 301 Priority Watch List, where it has remained to date. In addition, a number of retail markets and online websites in Thailand have been noted on the USTR Notorious Markets Reports. These designations reflect an overall non-deterrent and insufficient enforcement system for intellectual property. The Department of Intellectual Property (DIP) recently introduced an intellectual property roadmap that calls for intensifying efforts to combat piracy.

Patents, Data, Trade Secrets, and Plant Variety Protection

Thailand’s patent regime generally provides minimal protection for most inventions, with notable exceptions in the areas of business method patents, biotechnology, and pharmaceutical patents. While Thailand is a member of both the Paris Convention on the Protection of Industrial Property and the Patent Cooperation Treaty (PCT), the Department of Intellectual Property has struggled until recently to examine patent applications and issue patents in a timely fashion, with examination taking, on average, six to eight years in some technology sectors, and as high as 15-18 years for pharmaceutical patents. While patent filings have steadily increased over recent years, patent issuance numbers have not kept pace, and there is a significant current backlog in applications pending examination and action. In early 2017, there were approximately 36,000 patent applications pending for examination and granting.

In order to resolve the backlog problem, the DIP has increased the number of patent and trademark examiners. In addition, the government has issued a special order under Section 44 of the Interim Constitution for issuing patents for those applications for which an invention that has already been issued a patent overseas, subject to certain exceptions and conditions, which are still under discussion. In the longer term, DIP has announced its plans to amend the Patent Act to permit faster and more efficient examining of applications.

In addition to the delays in obtaining pharmaceutical patents, the U.S. pharmaceutical industry has expressed concerns regarding inadequate regulatory data protection and weak patent protection and enforcement regimes. Issued by the Ministry of Public Health, the implementation regulations for the 2002 Trade Secrets Act do not provide data exclusivity that would prevent unfair commercial use. A reported increase in the number of pharmaceutical copies receiving Thai FDA approval while the original product is still under patent illustrates the lack of necessary legislation and a linkage system for protection.

In addition to poor IP protection, the pharmaceutical industry has also expressed concerns with market access in Thailand‘s procurement regulations. Specifically, Thai regulations require public hospitals to purchase their medicines and medical supplies from the state-owned Government Pharmaceutical Organization (GPO), which sets a ceiling purchasing price, or “Median Price” for public procurement. Such price fixing creates market distortion that reduces the availability of innovative medicines to Thai patients and may prevent public hospitals and patients from gaining access to certain life-saving medicines.

Registration of new plant varieties under the Plant Variety Protection Act of 1999 began only in April 2006, due to a lengthy delay in issuance of implementing regulations. The private sector has expressed ongoing concerns about the overall implementation and enforcement of the Act, noting wide availability of pirated counterfeit seeds and other products in Thailand. The United States has repeatedly urged Thailand to strengthen the 1999 Act to make it fully consistent with the 1991 International Convention for the Protection of New Varieties of Plants (UPOV) and to accede to this Convention as well.


Thailand’s copyright law became effective in March 1995, and was amended in 2014 (entered into force in 2015) to create “fair use” exceptions for disabled users and criminalize unauthorized video filming in cinemas, as well as introducing an option for right holders to obtain a court order to force online service providers to take down infringing content. However, the amendments do not provide adequate protections against the circumvention of technological protection measures (TPMs) and the unauthorized modification of rights management information, and they also lack clarity in the operation of the notice-and-takedown procedures.

Trademarks and Geographical Indications

The current Thai trademark law was revised in 1992, to increase penalties for infringement and extend protection to service, certification, and collective marks, and streamline application procedures. Subsequent amendments in 2000 and 2014 have made significant improvements in the Act. Thailand is currently in the process of joining the Madrid Protocol.

The Geographical Indications Act was enacted in September 2003, and went into effect in April 2004. The legislation allows rights holders to seek protection for indications that identify a good as originating in the territory of a member or a region or locality in that territory, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographic origin. The existence of a similar previously registered trademark does not constitute grounds for refusal of a GI registration in Thailand. To date, protection has been extended to only one U.S. geographical indication.

IP Enforcement

Thailand enforcement efforts to protect IPR have been inconsistent. Corruption and a cultural climate of leniency complicate both enforcement actions and the prosecution of cases. Pirates, including those associated with transnational crime syndicates, have responded to intensified levels of enforcement with intimidation against rights holders’ representatives and enforcement authorities.

The Thai Government established a National Intellectual Property Policy Committee, comprised of top-level representatives from 11 agencies, with a mission to formulate policies and strategies for promoting intellectual property, fight against IPR infringements, and improve intellectual property laws and their implementation, but little has come from this effort. In 2013, it created a National Intellectual Property Rights Center of Enforcement with the support of 25 relevant governmental agencies, with the objective to ensure effective interagency cooperation for IPR enforcement; however, it has been superseded by a newly mandated Sub-Committee on the Enforcement of Intellectual Property, chaired by the Deputy Prime Minister, and coordinated by the Internal Security Operations Command.

While Thailand has had a specialized intellectual property court since 1997, the Court rarely imposes deterrent sentences in criminal cases and civil damages for IPR infringement are usually insufficient to compensate adequately a right holder for its injuries, with the recovery of reasonable costs and attorneys’ fees being rare. In December 2015, a new law was passed authorizing the creation of a Special Court of Appeal, which hears appeals from the Central Intellectual Property and International Trade Court and administrative appeals from the Department of Intellectual Property. The Special Court of Appeal began operations in October 2016. The Supreme Court now has discretionary review over IP cases which are viewed as being in the public interest or public order, or for the purpose of developing legal interpretation, or when the judgment or order of an appeal court is contrary to the final judgment or order of other courts.

While copyright-focused industry associations have noted a slight decline in the amount of pirated goods in the retail marketplace, this is attributed more to the substantial shift of distribution to online and mobile device environment than a result of government law enforcement efforts or a decrease in the acceptance and tolerance of content piracy in society. Digital copyright issues are inadequately addressed under the Thai copyright law, and law enforcement agencies lack sufficient expertise, resources, and political direction to tackle the pervasive problem. Cable and broadcast satellite signal piracy continues to be a major problem throughout Thailand, as pirate providers expand their operations in the provinces and online streaming. The book and journal publishing industry continues to face widespread photocopy piracy.

In late 2016, amendments to the Computer Crime Act of 2007 were enacted by the National Legislative Assembly, including a provision to empower officials to request the courts to block websites that contain IPR infringing content. The amendment will enter into force in May 2017.

Trademark infringement and counterfeiting remain serious problems. U.S. companies with an established presence in Thailand and a record of sustained cooperation with Thai law enforcement officials have had some success in defending trademarks, but the process remains time-consuming and costly. Penalties for proven trademark violations are too low/light to have a deterrent effect.

IPR Enforcement Statistics (2014-2016), provided by DIP

Relevant Agencies





Seized Items


Seized Items


Seized Items

The Royal Thai Police
The Trademark Act 5,960 669,957 158 10,882
The Copyright Act 3,592 308,235 5,012 2,646,258
The Patent Act 13 1,137 1,504 130,492
The Compact Disk Production Act 359 68,727 7,849 952,233
Film and Videotape Act, Consumer Protection Act
Criminal Code, Customs Act, Revenue Act
Cosmetic Act, GI Protection Act


9,924 1,048,056 7,849 952,233 6,674 2,787,632
Department of Special Investigation (DSI)
The Trademark Act 14 147,835 38 713,165 23 1,545,055
The Copyright Act
The Patent Act


14 147,835 38 713,165 23 1,545,055
Thai Customs
Customs Act 809 341,907 846 2,223,288 814 1,213,454


10,747 1,537,798 8,733 3,888,686 7,511 5,546,141

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ 

The U.S. Department of Commerce has positioned IP attachés in key markets around the world.

For Southeast Asia, please contact:

Teerin Charoenpot
Senior Intellectual Property Specialist
USPTO/Commercial Section, U.S. Embassy Bangkok

Capital Markets and Portfolio Investment

The Thai government maintains a regulatory framework that broadly encourages and facilitates portfolio investment and largely avoids market-distorting support for specific sectors. The Stock Exchange of Thailand (SET) is the country’s national stock market, which was set up under the Securities Exchange of Thailand Act B.E. 2535 (1992). There is sufficient liquidity in the markets to allow investors to enter and exit sizeable positions. Government policies generally do not restrict the free flow of financial resources to support product and factor markets. The Bank of Thailand, the country’s central bank, has respected IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions. Credit is generally allocated on market terms rather than by “direct lending.” Foreign investors are not restricted from borrowing on the local market. In theory, the private sector has access to a wide variety of credit instruments, ranging from fixed term lending to overdraft protection to bills of exchange and bonds. However, the private debt market is not well developed, and most corporate financing, whether for short-term working capital needs, trade financing, or project financing, requires borrowing from commercial banks or other financial institutions.

Money and Banking System

Thailand’s banking sector, with 15 domestic commercial banks, is healthy with low rates of non-performing loans (around 3 percent in December 2016) and a high ratio of capital funds/risk assets (capital adequacy) of 17.4 percent in December 2016. Thailand’s largest commercial bank is Bangkok Bank, with assets totaling USD $80.4 billion as of December 2016. The combined assets of the five largest commercial banks totaled USD $350.9 billion, or 76.6 percent of the total assets of the Thai banking system.

Thailand’s central bank is the Bank of Thailand (BOT), which was established in 1942 and is governed by an appointed Governor with a five-year term. The BOT prints and issues banknotes and other security documents (i.e. Bank of Thailand bonds), promotes monetary stability and formulates monetary policies, manages the BOT’s assets, provides banking facilities to the government, acts as the registrar of government bonds, and provides banking facilities for financial institutions.

There are currently 12 registered foreign bank branches and four foreign bank subsidiaries operating in Thailand. Foreign commercial banks can set up a branches in Thailand; Ministry of Finance issues licenses and Bank of Thailand issues advice. Subsidiary licenses that allow existing foreign bank branches in Thailand to upgrade to subsidiaries were introduced in 2012. Both a foreign commercial bank branches are limited to three branches/ATMs and foreign commercial bank subsidiaries are limited to 20 branches or 20 off-premise ATMs per subsidiary. Foreign banks must maintain minimum capital funds of 125 million baht (USD $3.87 million at 2016 exchange rate) invested in government or state enterprise securities, or directly deposited in the Bank of Thailand. The number of expatriate management personnel is limited to six people at full branches, although the Thai authorities frequently grant exceptions on the basis of need. There are no records of loss among banks in the past three years.

Non-residents can open and maintain foreign currency accounts without deposit and withdrawal ceilings. Any deposits in the Thai Baht currency must be derived from one of the following sources: conversion of foreign currencies, payment of goods and services, or a capital transfers. Any withdrawals are permitted, except the withdrawal of funds for credit to another non-resident person or purchase of foreign currency involving an overdraft.

In general, a commercial bank in Thailand provides services of accepting deposits from the public, granting credit, buying and selling of foreign currencies, buying and selling of bills of exchange, which includes discounting or re-discounting bills of exchange, accepting, and guaranteeing of bills of exchange. Furthermore, commercial banks also provide credit guarantees, payment, remittance and financial instrument for risk management such as interest rate derivatives and foreign exchange derivatives. Additional business to support capital market development, such debt and equity instruments, is allowed. A commercial bank may also provide other services that enhance its efficiency, such as bank assurance and e-banking.

Foreign Exchange and Remittances

Foreign Exchange

There are no limitations placed on foreign investors for converting, transferring, or repatriating funds associated with an investment; however, supporting documentation is required. Any person who brings foreign currency into or out of Thailand exceeding USD $20,000 or the equivalent must declare the amount at a Customs checkpoint. Investment funds are allowed to be freely converted into any currency.

The exchange rate is generally determined by a managed float system. The exchange rate movements have also been determined by market fundamentals; however, during the period of excessive capital inflows (i.e. exchange rate speculation), the central bank has stepped in to prevent extreme movements in the currency and to reduce the duration and extent of the exchange rate’s deviation from the equilibrium.

Remittance Policies

There are no time limitations on personal remittances. In addition, there are no limitations on the inflow or outflow of funds for remittances of profits or revenue.

Sovereign Wealth Funds

Thailand currently does not have a sovereign wealth fund, and there are no indications that the Bank of Thailand is pursuing the creation of such a fund.

Thailand’s 55 state-owned enterprises (SOEs) have total assets of USD $382.5 billion and a combined net income of USD $5.5 billion. They employ around 270,000 people, or 0.7 percent of the Thai labor force. Thailand’s SOEs operate primarily in service delivery, in particular the energy, telecommunications, transportation, and financial sectors. The full list of SOEs list is published under the website of the State Enterprise Policy Office under the Ministry of Finance.

The government generally defines SOEs as special agencies established by law for a particular purpose that are 100 percent owned by the government (through the Ministry of Finance as a shareholder). Limited liability companies/public companies limited require 50 percent higher government ownership. Of the 55 total SOEs, 42 are wholly-owned and 13 are majority-owned. Twelve of these companies are limited liabilities. Five of them are publicly listed on the Stock Exchange of Thailand: Thai Airways International Public Company Limited, Airport of Thailand Public Company Limited, PTT Public Company Limited, MCOT Public Company Limited, and Krung Thai Bank Public Company Limited. By regulation, at least one-third of SOE boards must be comprised of independent directors.

Private enterprises can compete with SOEs under the same terms and conditions with respect to market share, products/services, and incentives in most sectors, but there are some exceptions, such as fixed line operations in the telecommunications sector.

According to officials at the State Enterprise Policy Committee (SEPO), which was established in 2014, SOEs adhere to the Organisation for Economic Co-operation and Development (OECD) Guidelines on corporate governance, including the state acting as an owner. The current guidelines are not yet sufficient to ensure a level playing field between SOEs and private sector enterprises, but the subcommittee of corporate governance has realized the importance of the issue, which is still under the process of consideration and review.

In general, SOE senior management reports directly to a line minister and to the SEPO. Corporate board seats are typically allocated to senior government officials or other politically-affiliated individuals. The SEPO Committee tries to limit political interference in board member appointments.

Privatization Program

The 1999 State Enterprise Corporatization Act provides the framework for the conversion of SOEs into stock companies, and corporatization is viewed as an intermediate step toward eventual privatization. (Note: “Corporatization” describes the process by which an SOE adjusts its internal structure to resemble a publicly-traded enterprise; “privatization” means that a majority of the SOE’s shares is sold to the public, and “partial privatization” refers to a situation in which less than half of a company’s shares are sold to the public.) Foreign investors are allowed to participate in privatization, but restrictions are applied in certain sectors, regulated by the Foreign Business Act (FBA) and the Act on Standards Qualifications for Directors and Employees of State Enterprises of 1975 and its series of amendments.

The new 15-member State Enterprises Policy Commission, or “superboard,” was established in 2014 to oversee reform of the country’s 55 SOEs. In March 2015, the superboard approved, in principle, the establishment of a holding firm to supervise 12 SOEs, which have been partially equitized and listed on the Stock Exchange of Thailand, while the State Enterprise Policy Office will be retained to supervise SOEs that have been established by specific laws, including the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority, and the Provincial Electricity Authority. The superboard is now in the process of pushing through a new law that will reform these SOEs and ensure transparent management decisions; however, privatization is not part of the process.

There is wide recognition and awareness of responsible business conduct (RBC) primarily in the area of corporate social responsibility (CSR) initiatives among Thai producers and consumers, but many Thai companies still lack a full understanding of the generally accepted CSR principles under the OECD Guidelines for Multinational Enterprises. CSR is most often identified as individual philanthropic projects or community service of companies, rather than as an overall corporate strategy aimed to improve the community in which the companies operate. Companies that pursue CSR are viewed favorably by the public.

Many business associations, including the American Chamber of Commerce (AmCham), Thai Chamber of Commerce (TCC), the Federation of Thai Industries (FTI), Joint Standing Committee on Commerce, Industry, and Banking of Thailand (JSCCIB) actively support the development of CSR programs in Thailand. Since 2007, the AmCham CSR Excellence Awards (AmCham ACE) have encouraged the expansion of CSR programs by identifying best practices of companies in Thailand. Many CSR programs incorporate the U.S. Mission’s Thai-U.S. Creative Partnership to work directly with local partner organizations on long-term projects training and promoting opportunities in innovative sectors, especially renewable energy, entrepreneurship, and health projects. The AmCham ACE program also tracks continuous improvement. Both the TCC and the FTI have undertaken several CSR projects over the past years. The JSCCIB has also established a CSR committee that consolidates reports on activities from both TCC and FTI members.

Although the government does not have a National Action Plan on RBC, nor does it currently maintain a National Contact Point (NCP) for OECD Guidelines for Multinational Enterprises, the government through various ministries, has taken several measures to encourage RBC that integrates sustainable business practices focused on respecting human rights, environmental protection, labor relations, and financial accountability. The Ministry of Industry under the Department of Industrial Works has encouraged the sector to implement their Corporate Social Responsibility (CSR-DIW) standards, giving them the potential to meet ISO 26000 standards (an international standard on Social Responsibility. The SET, under their sustainable stock exchange initiative, is encouraging listed companies to be conscious of social responsibility when conducting business by considering environmental, social, and corporate governance factors in their investment decisions. SET houses an active Social Responsibility Center which was created to provide sustainability guidelines as well as raise awareness among listed companies the importance of balancing the economy, society, and environment, under the corporate governance principles. In terms of transparency in the natural resources sector, the Thai government announced that it intended to join the Extractive Industries Transparency Initiative and apply Extractive Industry Transparency Initiative (EITI) standards in the energy sector.

There are several local NGOs that promote and monitor RBC and the majority operates freely, but a few face intimidation as a result of their work in monitoring civil rights issues.

Corruption is pervasive in both the private and public sectors, but the Government of Thailand and civil society actors strive to improve Thailand’s standing, with mixed results. Transparency International’s 2016 Corruption Perception Index ranked Thailand 101 of 176 countries globally, and 19 of 30 countries in Asia Pacific. 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.

Thailand’s anti-corruption laws extend to both family members of officials and to political parties. In order to provide fair competition, 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 also 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.

In recent years, the private sector has attempted to take the lead in fighting corruption through education and advocacy. 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.

In addition, the Anti-Corruption Organization of Thailand (ACT), founded in 2011, was established to pressure the government to create laws that can reduce levels of corruption. ACT recently 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.

Resources to Report Corruption

Contact at a government agency 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
Email: TACC@nacc.go.th

Contact at a “watchdog” organization:
Dr. Mana Nimitmongkol
Secretary General
Anti-Corruption Organization of Thailand
44 Srijulsup Tower, 16th floor, Phatumwan, Bangkok 10330
Tel: +662-613-8863
Email: mana2020@yahoo.com

Since the May 2014 military coup, political stability has improved, with fewer reported incidents of political violence. The coup followed seven months of anti-government protests and sporadic incidents of violence. Despite government efforts to promote political reconciliation, stark political divisions remain, as do continued restrictions on freedoms of assembly and speech. The deeply rooted political rifts, together with ongoing concerns about a slowing economy and delays in a return to elected government, present a potential risk for the reemergence of public protests or violence.

Political instability has plagued Thailand since 2005, beginning in 2006 with a military coup that ousted then Prime Minister Thaksin Chinnawat, followed by large-scale, sometimes violent protests by competing political factions, commonly known as “red shirts” and “yellow shirts,” in 2008, 2009, 2010, and 2014. The 2014 protests culminated in May with a military coup that instituted a military government that remains in power. Elections are tentatively planned for mid-2018. The death of the beloved King Bhumibol Adulyadej in October 2016 after 70 years on the throne was a blow to the country. King Maha Vajiralongkorn Bodindradebayavarangkun, formally known as King Rama X, ascended the throne in October 2016 following his father’s death.

Violence related to an ongoing Malay-Muslim insurgency in Thailand’s southernmost provinces continues. Efforts to end the ethno-nationalist insurgency, which, since 2004, has claimed almost 7,000 lives and caused over 12,000 mostly civilian injuries, have so far been unsuccessful. The government is currently engaged in peace talks with an insurgent umbrella group, but the principal insurgent faction refuses to participate. Almost all attacks have occurred in the three southernmost provinces of the country.

On August 11 and 12, 2016, a series of coordinated bombings and arson attacks targeting southern tourist sites outside of the three southernmost provinces killed four and injured at least 20.

In 2016, Thailand’s formal labor force was 38.3 million, or more than 56 percent of the population. Reported unemployment rates are well below full employment, at 1.0 percent overall. Unemployment among youth (defined as those aged 15 to 24) is around 3.5 percent, while it is only 0.5 percent for adults over 25 years old. Well over half the labor force (55.6 percent) earns income in the informal sector, including through self-employment and family labor. However, the proportion of workers in the informal sector has gradually declined, from 62 percent as of 2013, as Thailand experienced a structural transformation from a low productivity agricultural economy to a higher productivity manufacturing and service oriented economy. Thailand’s fertility rates are low and the population is aging, with population growth projected to become negative by 2025. This demographic shift, combined with inadequate social welfare programs for elder care, is exacerbating labor shortages in many sectors, especially among low-skilled working aged women.

Despite the advent of 15 years of universal, free education, Thailand continues to suffer from a skills mismatch that is impeding innovation and economic growth.

This labor shortage is among the chief factors that has attracted 2.5 million officially registered migrant workers to Thailand, plus an estimated 2.0 million more undocumented migrant workers. The majority of migrant workers are from Burma (67 percent), Cambodia (26 percent), and Lao PDR (7 percent). Only 14 percent of documented migrant workers entered the country through formal work agreement, or “MOU”, channels, which means that the vast majority of registered migrant workers in Thailand originally entered the country through unauthorized channels, often without any primary identity documents (passport nor identification card) from their origin countries. Undocumented migrant workers in Thailand remain vulnerable to intimidation, threats, and being cheated by employers, brokers, labor traffickers, and corrupt officials. Additional information on migrant workers issues and rights can be found in the U.S. Trafficking in Persons Report, as well as the Labor Rights section of the U.S. Human Rights report. Companies receiving Board of Investment privileges for manufacturing may not hire non-Thai workers.

Manufacturing firms in Thailand consider the lack of skilled workers a top constraint for further investment and growth in Thailand. However, as the second-largest economy in ASEAN, Thailand has an agile business sector and a large cohort of educated individuals who could increase productivity in the future.

The Overseas Private Investment Corporation (OPIC) provides debt financing, political risk insurance, and private equity capital to support U.S. investors and their investments. It does so under a bilateral agreement with Thailand. OPIC can provide debt financing, in the form of direct loans and loan guarantees, of up to USD $250 million per project for business investments with U.S. private sector participation, covering sectors as diverse as tourism, transportation, manufacturing, franchising, power, infrastructure, and others. OPIC political risk insurance for currency inconvertibility, expropriation, and political violence for U.S. investments including equity, loans and loan guarantees, technical assistance, leases, and consigned inventory or equipment is also available for business investments in Thailand. In addition, OPIC supports five private equity funds that are eligible to invest in projects in Thailand. In all cases OPIC support is available only where sufficient or appropriate investment support is unavailable from local or other private sector financial institutions.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2016 $406,840 2015 $395,200 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2016 $15,545 2015 $11,295 BEA data available at http://bea.gov/international/direct_investment_
Host country’s FDI in the United States ($M USD, stock positions) 2016 $3,868 N/A N/A BEA data available at http://bea.gov/international/direct_investment_
Total inbound stock of FDI as % host GDP 2016 $201,845 49.6% N/A N/A

*National Economic and Social Development Board for GDP; Bank of Thailand for FDI.

Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 183,277 100% Total Outward 70,318 100%
Japan 65,095 35.5% Cayman Islands 9,275 13.2%
Singapore 26,450 14.4% China, P.R.: Hong Kong 7,746 11.0%
United States 14,789 8.1% Mauritius 6,311 9.0%
Netherlands 11,483 6.3% Singapore 5,545 7.9%
China, P.R.: Hong Kong 9,633 5.3% British Virgin Islands 3,330 4.7%
“0” reflects amounts rounded to +/- USD 500,000.

This data is consistent with Thai government data. Sources of FDI are not tax havens.

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries 40,220 100% All Countries 14,893 100% All Countries 25,327 100%
China P.R. 6,655 17% Luxembourg 4,303 29% China P.R. 6,284 25%
United States 5,516 14% United States 3,972 27% Japan 2,888 11%
Luxembourg 4,590 11% Hong Kong 1,308 9% Hong Kong 2,309 9%
Hong Kong 3,617 9% Singapore 1,077 7% UAE 1,844 7%
Japan 3,451 9% Ireland 840 6% United States 1,544 6%

The Thai government does not publish comparable data. Sources of portfolio investment are not tax havens.

Greg Wong
Commercial Counselor
U.S. Embassy Bangkok
+662 205-5280

2017 Investment Climate Statements: Thailand
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