In the previous issue, we introduced the basic regulatory
requirements of the Foreign Business Act ("FBA") for foreign
investment, as well as the eligibility requirements and application procedures
for a Foreign Business License ("FBL").
Although the FBA delineates the regulatory
boundaries for the business conducted
by foreigners in Thailand through the
"Three Lists", with the development of the social economy and the
flourishing of commercial activities, the Thai Ministry of Commerce has also
enacted separate ministerial regulations that expressly provide that certain
specific service businesses do not fall within the service businesses restricted to foreign operation
under List Three of the FBA and are therefore not required to obtain a Foreign
Business License to engage in such businesses. In this issue, we will introduce
the service businesses that are exempt from applying for a Foreign Business
License as stipulated by the Thai Ministry of Commerce.
I.
Relevant Regulations
Following the enactment and coming into force
of the FBA, the Thai Ministry of Commerce has, since 2013, enacted and promulgated the following
ministerial regulations, which expressly provide that no Foreign Business
License is required to engage in certain specified service industry businesses:
On March 11, 2013, the Minister of Commerce
of Thailand issued the Ministerial Regulation on the Determination of Service
Businesses Not Requiring a Foreign Business License;
On February 11, 2016, the Minister of
Commerce of Thailand issued the Ministerial Regulation on the Determination of
Service Businesses Not Requiring a Foreign Business License (No. 2);
On May 26, 2017, the Minister of Commerce of
Thailand issued the Ministerial Regulation on the Determination of Service
Businesses Not Requiring a Foreign Business License (No. 3);
On June 13, 2019, the Minister of Commerce of
Thailand issued the Ministerial Regulation on the Determination of Service
Businesses Not Requiring a Foreign Business License (No. 4).
II.
Businesses Expressly Not Required to Obtain a Foreign Business License
The four ministerial regulations above
collectively provide for 12 categories of service industry businesses that do
not require a Foreign Business License. The specific businesses are as follows:
•
Securities businesses and other
businesses prescribed under the Securities and Exchange Act:
–
Securities
trading;
–
Investment
advisory;
–
Securities
distribution;
–
Securities
lending;
–
Mutual
fund management;
–
Private
fund management;
–
Venture
capital management;
–
Securities
financing;
–
Financial
advisory services;
–
Securities
registration services;
–
Custody
of assets of securities company clients or futures trading clients;
–
Acting
as asset custodian for private funds;
–
Acting
as trustee for mutual funds;
–
Acting
as representative of bondholders.
•
Futures contract businesses
conducted pursuant to the Futures Trading Act:
–
Acting
as a futures contract dealer;
–
Acting
as a futures contract advisor;
–
Acting
as a futures contract fund manager.
•
Trust businesses under the Trust
for Capital Market Transactions Act
•
Financial institution
businesses, businesses related to or necessary for the operation of financial
institutions, other businesses of financial institutions, and businesses of
companies in financial business groups, conducted pursuant to the Financial Institution
Business Act:
–
Commercial
banking business;
–
Service
businesses operating as a representative office of a bank;
–
Providing
financial services in accordance with Islamic law;
–
Acting
as a representative of a financial institution;
–
Providing
deposit services with conditional withdrawal by client instruction and welfare
management businesses;
–
Engaging
in repurchase transactions in the private sector;
–
Receiving
applications and collecting premiums or service fees for export insurance and
loan guarantees on behalf of financial institutions;
–
Providing
financial business services for financial institutions, companies in financial
business groups, banks
in Thailand, and government agencies;
–
Leasing
real estate;
–
Purchasing
or transferring loan debts;
–
Providing
cash management services;
–
Providing
document preparation services related to clients' businesses;
–
Providing
debt repayment agent or requesting agent services;
–
Providing
installment and leasing services;
•
Life insurance businesses
prescribed under the Life Insurance Act
•
Non-life insurance businesses
prescribed under the Non-Life Insurance Act
•
Asset management businesses
pursuant to the Emergency Decree on Asset Management Companies
•
Businesses conducted as a
representative office of a foreign juristic person engaged in international
trade services, pursuant to the Regulation of the Prime Minister’s Office on
the Establishment of the Visa and Work Permit Center (B.E. 2540)
•
Businesses conducted as a
regional office of a foreign juristic person engaged in international trade
services, pursuant to the Regulation of the Prime Minister’s Office on the
Establishment of the Visa and Work Permit Center (B.E. 2540)
•
Service businesses conducted as
a contracting party with government agencies pursuant to the Budget Procedures
Act
•
Service businesses conducted as
a contracting party with state-owned enterprises pursuant to the Budget
Procedures Act
•
Domestic loan services, rental
services for office space with public
utilities, and consulting services limited to the following areas: management,
marketing, human resources and information technology services, conducted
between related juristic persons in the following circumstances:
–
A
shareholder or partner holding more than half of the shares or partnership
interests in one juristic person also holds more than half of the shares or
partnership interests in another juristic person;
–
A
shareholder or partner holding no less than 25% of the shares or partnership
interests in one juristic person also holds no less than 25% of the shares or
partnership interests in another juristic person;
–
One
juristic person directly holds no less than 25% of the shares or partnership
interests in another juristic person;
–
Directors
or partners having majority management authority in one juristic person also
have majority management authority in another juristic person.
