Foreign ownership under the Foreign Business Act

Under section 4 of the Foreign Business Act B.E. 2542, a company registered in Thailand is a foreigner where at least one half of its capital shares are held by foreigners, counting individuals who are not of Thai nationality, juristic persons not registered in Thailand and Thai-registered companies that are themselves foreign under this test. Section 8 then sorts business activity into three lists. No foreigner may operate a business in List One. List Two needs permission from the Minister with the approval of the Council of Ministers. List Three needs permission from the Director-General with the approval of the Commission. Section 36 makes it an offence for a Thai national, or a juristic person that is not a foreigner under the Act, to act as a foreigner's nominee in holding shares so that the foreigner can operate a business in circumvention of the Act, and for the foreigner who allows that to be done, carrying imprisonment of up to three years or a fine of one hundred thousand to one million baht or both, with an order from the court that the shareholding cease. Section 41 puts the same penalty on directors who connive at an offence or fail to take reasonable action to prevent it. On land, section 96 of the Land Code gives the Director-General power to dispose of land where it appears that a person has acquired it as owner in place of an alien. These articles set out what those provisions say and what officials examine under them. They do not tell you what any particular arrangement is, and they do not tell you what to do about one.