A number of years ago, a client wished to establish a base in Thailand for its software operations. It chose Thailand over India because of its preferred infrastructure.

We advised obtaining BOI approval for the incentives offered. On the issue of foreign ownership, I told them not to put it in their presentation but ask the BOI officials at the end of the meeting if 100% foreign ownership would be acceptable - almost as an afterthought.

It was at a time that the Thai Government was courting international tech companies. Not only was 100% foreign ownership acceptable but they did not need to locate in Bangkok's Software Park which was a normal Board of Investment condition at the time for software businesses. They could set up near their other offices on Rama 4. (At the time, Software Park had no vacancies so this was a practical solution.) So enthusiastic was the BOI that they invited them to attend an international BOI roadshow before formal approval was granted.

From a sketch outline on a piece of paper in a meeting room, the operation grew to around 500 employees.

The Thai Government has now indicated that it proposes to amend the Foreign Business Act to deal with the issue of control and nominee arrangements.

Others have stated that any amendments should also include a relaxation of the number of business activities restricted to Thais under the FBA's Schedules, particularly Schedule 3. I agree.

The reality is that a vast number of non-US Treaty and non-BOI approved foreign-controlled businesses in Thailand operate under nominee style arrangements. These can vary from bare nominee arrangements to more sophisticated arrangements involving preference shares, voting and management control.

We used to call this the Nominee Spectrum - with bare nominees at the dark grey (riskier) end and more sophisticated models at the lighter grey end. But it was all grey and relied on the Ministry of Commerce's interpretation of the FBA - not looking behind share ownership at the issue of control.

Over the years, the MOC has clamped down on certain arrangements such as preference shares but this only resulted in the emergence of more sophisticated arrangements.

A more vigorous crackdown may be about to occur.

The MOC has announced a review of the FBA with particular emphasis on complex cross-shareholding structures and a significant increase in penalties to deter violations of the FBA, including asset seizures and tougher criminal penalties.

The MOC is at an early stage on its reform road and the final outcome is yet to be determined. Any real reform of the issue of control is likely to necessitate the unwinding of many foreign-controlled businesses in Thailand that would fail any scrutiny.

Thai Government to Reform Foreign Business Act

April 2026

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