The Ministry of Commerce will attach conditions to the Foreign Business License. These conditions include that the business bring into Thailand Baht 3,000,000 in capital during the first year. In cases where the businesses require licenses under the Lists Two and Three the minimum capital prescribed by the ministerial regulations is three million Baht. Retail and wholesaling business are covered by List Three and have much higher capital requirements. Foreigner may operate businesses under List Two only if at least 40% of the capital is Thai owned. Other conditions have not yet been announced.

Exceptions:

Under a Royal Decree of 1973, an "alien" enterprise granted promotional privileges by the Board of Investment is permitted to engage in a Category Two business. In addition, the Law is not applicable to aliens engaging in business by permission of the Thai Government for a definite duration, or by agreement between the Thai government and foreign governments. Thus, several American-owned enterprises have invoked the provisions of the Treaty of Amity and Economic Relations between Thailand and the United States to claim exemption from the Law. There is an accelerated procedure for issuing the necessary license or permit for aliens who have been granted promotion by the BOI. The Law does not apply to businesses not falling within Categories A, B or C.

Penalties: Unlike the previous Alien Business Law, the new Foreign Business Act provides for more severe criminal penalties. Any foreigner who operates a business excluded to foreigners by the Foreign Business law and without an Alien Business License is liable for a fine from 100,000 to 1,000,000 Baht and imprisonment of up to three years. Further, a Thai national or juristic person that assists a foreigner in avoiding the Foreign Business Act by means of holding shares as a nominee or being a nominal owner of the company shall also be liable for a fine of 100,000 to 1,000,000 Baht and imprisonment of up to three years.

 

Part 4