Overview of the Proposed Reform

On 12 May 2026, the Thai Cabinet approved in principle two draft subordinate instruments under the Foreign Business Act B.E. 2542 (FBA). The package comprises a draft Royal Decree amending categories of restricted businesses annexed to the FBA and a draft Ministerial Regulation prescribing businesses that foreign nationals may operate without obtaining a Foreign Business License (FBL). The policy objective is to improve ease of doing business and reduce regulatory redundancy in sectors where Thai operators are considered sufficiently competitive, where the regulated services are already supervised by specialist regulators, or where the relevant services are internal to a corporate group. The Ministry of Commerce has described the reform as a package covering nine business activities — eight service businesses proposed to be exempted through the draft Ministerial Regulation and one related to agricultural futures trading under the draft Royal Decree.

Current Status and Legal Effect

The measures remain draft instruments. They will not have legal effect until the final texts are signed and published in the Royal Gazette. Foreign-invested companies in Thailand should therefore continue to comply with existing FBA requirements until the legislation formally enters into force. The final legal effect will depend on the exact wording of the promulgated instruments. In particular, the availability of each exemption will need to be assessed against the actual activity conducted, the identity of the counterparty, the source of income, and any conditions or exclusions included in the final regulation. Foreign investors are therefore advised to monitor the drafting process and to seek qualified legal advice before restructuring their Thai operations in reliance on the proposed exemptions.

Existing FBA Framework

The Foreign Business Act B.E. 2542 regulates business operations by foreigners in Thailand. For these purposes, a foreigner generally includes a foreign individual, a foreign-incorporated entity, and a Thai-incorporated company in which foreigners hold at least half of the share capital or invested capital, subject to the statutory definition and specific structuring rules. Many service businesses fall within List Three of the FBA, which covers activities in which Thai nationals are not yet considered ready to compete with foreigners. Unless an exemption applies, a foreigner must generally obtain an FBL from the Ministry of Commerce before operating a restricted List Three business. The proposed reform is significant because it would remove the FBL requirement for specified service activities within the limits defined by the final instruments, while preserving sector-specific licensing requirements administered by other regulatory bodies.

The Eight Proposed Service-Business Exemptions

Telecommunication Services Without Network Infrastructure

Services where the operator does not own or control its own telecommunications network infrastructure would be exempt from FBL requirements. However, NBTC licensing and telecommunications sector regulations will remain applicable.

Treasury Centre and Financial Management Services

Group treasury, liquidity management, and related financial management functions for corporate groups would qualify for exemption. Bank of Thailand regulations, foreign-exchange controls, tax compliance, and BOI incentive conditions should be reviewed before implementation.

Internal Network Management Services

Intra-group administrative, human resources, information technology, and internal support services would be exempted. The intra-group nature of the service is critical — similar services provided to unrelated customers may remain restricted and subject to FBL requirements.

Domestic-Only Debt Guarantee Services

Guarantees of debts incurred domestically within the scope of the final regulation would be exempt. Cross-border guarantees and guarantees in foreign currency may fall outside the exemption scope.

Foreign Currency Debt Guarantee Services

A separate category for guarantees of debts denominated in foreign currency would also be exempt, subject to foreign-exchange regulatory compliance and Bank of Thailand notification or approval requirements.

Non-Life Insurance Brokerage Services

Brokerage services for non-life insurance products intermediated through licensed Thai brokers would not require an FBL, while the Office of Insurance Commission regulatory framework continues to apply.

Rental Services for Residential Buildings

The rental of residential buildings to group employees for housing purposes would be exempt. Commercial leasing and rental of properties to non-group tenants may remain restricted.

Other Rental Services for Residential Buildings

A related exemption covering additional categories of residential rental services by foreign companies for their employees, subject to conditions in the final regulation.

Practical Implications for Chinese Investors

Chinese companies operating in Thailand through regional headquarters, treasury centres, or shared-service hubs should assess whether their current activities would fall within the proposed exemptions. Companies that currently hold FBLs for activities covered by the exemptions may choose to allow their licenses to lapse once the regulation is formally enacted, though this decision should be deferred until the final text is published. Companies should also review their compliance documentation and internal service agreements to ensure that intra-group service arrangements can be properly documented and evidenced. The proposed reform does not reduce the need for proper corporate structuring, shareholder agreements, and BOI incentive applications, which remain critical for Chinese-invested enterprises in Thailand. We recommend that Chinese companies with Thai operations engage local legal counsel to conduct a gap analysis between their current licensing coverage and the proposed exemptions.

How We Can Help

Our team at Mahanakorn Partners Group in Bangkok can assist Chinese investors with FBA compliance assessment, BOI incentive applications, joint venture structuring, and ongoing regulatory monitoring. We provide Thai-language documentation support, coordinate with the Ministry of Commerce and the BOI, and advise on the full spectrum of foreign investment regulatory matters affecting Chinese enterprises in Thailand.

BOI Incentive Interactions

Chinese companies that secure BOI promotion certificates may benefit from additional licensing flexibilities under the proposed reform. BOI-promoted activities are already exempt from FBL requirements under section 16 of the FBA for the promoted activity itself. The proposed exemptions would extend similar treatment to auxiliary service activities that support the promoted operations, reducing the need for separate licensing for group treasury, internal IT, and HR shared services. This interaction between the BOI framework and the proposed FBA exemptions is significant for Chinese manufacturing and infrastructure investors who operate through regional holding structures with centralized service functions.

Transition Arrangements

Companies holding existing FBLs should consider the transition arrangements carefully once the regulations take effect. It is anticipated that existing license holders will be permitted to retain their licenses until expiry or to surrender them voluntarily. The Ministry of Commerce has not yet indicated whether fees paid for existing licenses would be refundable upon early surrender. Companies should also be aware that the proposed exemptions do not eliminate the obligation to comply with other regulatory requirements including tax registration, work permit and visa obligations, and annual financial reporting. The BOI supervisory framework continues to apply to promoted companies, including reporting obligations and investment conditions that may require ongoing licensing documentation regardless of the FBA exemption. Companies relying on the proposed exemptions should maintain clear documentation demonstrating that their activities fall within the exempted categories, including service agreements, organizational charts, and evidence that the services are provided to related parties where intra-group exemptions apply.

Transition Arrangements and Practical Guidance

Companies holding existing FBLs for activities covered by the proposed exemptions should plan for the transition period. It is expected that existing license holders will be permitted to retain their licenses until the scheduled expiry date or to surrender them voluntarily once the new regulations take effect. Companies should maintain clear documentation demonstrating that their activities fall within the exempted categories, including intra-group service agreements, organizational charts showing corporate structure, and evidence that services provided to group entities satisfy the related-party requirements of the regulation.