The Foreign Business Operations Act, BE 2542 (1999) (FBOA) contains three lists of businesses that foreigners are restricted from participating in.
List 3 includes subsection 21, a catchall provision for “Other services”. This subsection is broadly interpreted to cover services which are supplementary to the main business of a company, which includes back office services.
In 2018, the Ministry of Commerce reviewed the restricted business activities under List 3 to determine possible amendments that could facilitate business operations in Thailand.
On September 18 2018, the Foreign Business Committee passed a resolution to exclude from the licensing requirement under the FBOA three back office service activities provided to affiliates and group companies. This was because these services were not considered to be directly related to restricted professions, and would not directly compete with Thai business operators. This resolution would allow foreigners to operate such business activities without specific authorisation from the Ministry of Commerce, and to freely compete with Thai back office service providers.
After a subsequent review process, the Cabinet approved a draft Ministerial Regulation on May 14 2019. The Ministerial Regulation exempts from the licensing requirements under the FBOA specific back office services performed by foreigners, as follows¹:
- lending money to affiliates and group companies in Thailand;
- leasing office space and providing utilities services to affiliates and group companies; and
- providing consultation and advice to affiliates and group companies in the following fields:
- management administration;
- human resources; and
- information technology.
The definitions of “affiliate” and “group company” are included in the Ministerial Regulation and will be available once the Ministerial Regulation is made public.
¹ After this Ministerial Regulation is issued by the Ministry of Commerce, a foreign business licence will not be required for a foreigner to conduct the exempt business activities.
Tel: +66-2-266-6485 Ext 151
Tel: +66-2-266-6485 Ext 145
Tel: +66-2-266-6485 Ext 148
Chandler MHM Limited
7th-9th, 12th and 16th Floors
20 North Sathorn Road
Bangkok 10500, Thailand
We will provide further updates once the Ministerial Regulation is released to the public and subsequently upon it becoming effective.
This publication is intended to highlight an overview of key issues for ease of understanding, and not for the provision of legal advice. If you have any questions about this publication, please contact your regular contact person(s) at Mori Hamada & Matsumoto or Chandler MHM Limited, or any of the Key Contacts listed in the far-right column.