Under the Foreign Business Act B.E. 2542 (1999) (“FBA”), Thailand imposes restrictions on certain business activities conducted by foreign nationals through the “Foreign Business Lists” (Lists 1, 2, and 3). The primary objective of the FBA is to protect Thailand’s economic interests, national security, and the competitiveness of domestic enterprises.
In recent years, however, the Thai government has demonstrated an increasingly liberal approach toward foreign investment, particularly in industries relating to digital technology, logistics, and modern service sectors. As a result, certain business categories have gradually been “removed” or exempted from the Foreign Business Lists in order to encourage foreign direct investment and enhance Thailand’s competitiveness in the global economy.
Most recently, the government has proposed removing additional categories of businesses from the scope of the FBA on the basis that many industries are already regulated under sector-specific legislation and supervised by specialized regulatory authorities. Accordingly, dual regulation under the FBA may no longer be necessary. Businesses likely to benefit from such liberalization include intra-group services, information technology businesses, treasury center operations, and industries already regulated by specific authorities, such as telecommunications and financial services.
These developments represent a significant transformation in Thailand’s investment landscape. Historically, many foreign investors were required to adopt complex structures, such as joint ventures with Thai shareholders, applications for Foreign Business Licenses (“FBLs”), or investment promotion privileges from the Thailand Board of Investment (“BOI”) in order to legally operate their businesses in Thailand.
The Concept of Removing Businesses from the Foreign Business Lists
The removal of businesses from the Foreign Business Lists refers to the issuance of ministerial regulations or governmental notifications exempting certain business categories from the restrictions imposed under the FBA. As a result, foreign investors may be permitted to hold 100% ownership in such businesses without the need to obtain an FBL or rely upon nominee structures.
This policy direction reflects Thailand’s gradual transition from a traditionally protectionist regime toward a more open and internationally competitive economic framework, particularly in sectors where Thailand seeks foreign expertise, technology, and investment capital.
In practice, businesses are commonly exempted from FBA restrictions through three principal mechanisms:
- The issuance of ministerial regulations under the FBA exempting certain business categories;
- Special rights granted under international treaties, such as the Treaty of Amity between Thailand and the United States; and
- Investment promotion privileges granted by the Thailand Board of Investment (“BOI”), permitting foreign investors to hold full ownership in certain promoted activities.
Examples of Businesses Receiving Liberalization or Relaxation of Restrictions
In recent years, various industries have benefited from relaxed foreign ownership restrictions. For example, software businesses and digital platform operations have been actively promoted as part of Thailand’s New S-Curve Industries under the country’s digital economy policy. These businesses frequently receive BOI promotion privileges and, in many cases, may operate with full foreign ownership.
International Distribution Centers (“IDCs”) and certain logistics businesses have likewise benefited from liberalization measures aimed at strengthening Thailand’s position as a regional trade and transportation hub.
In addition, Thailand has increasingly opened its market to advanced technology sectors, including artificial intelligence (AI), cloud services, data centers, intra-group services, and digital management systems. The government views these industries as essential infrastructure for the modern economy and recognizes Thailand’s growing dependence on foreign expertise and investment in these sectors.
Implications for Nominee Structures
One of the most significant implications of removing businesses from the Foreign Business Lists is the reduced necessity for nominee structures.
Historically, certain foreign investors utilized Thai shareholders as “nominees” in order to circumvent restrictions imposed under the FBA. Such arrangements may constitute violations of Thai law if it can be demonstrated that the Thai shareholders did not make genuine investments or lacked actual control over the business.
Today, Thai authorities are increasingly scrutinizing the identity of the “beneficial owner” through examinations of financial records, voting rights, fund flows, and corporate governance structures. Consequently, where foreign investors are permitted to hold shares directly, nominee structures have become both unnecessary and legally high-risk in many circumstances.
This trend also reflects the growing emphasis placed by Thai regulators on the principle of “substance over form,” whereby authorities evaluate the actual economic reality and control structure of a business rather than merely its documentary form.
Liberalization Does Not Eliminate Regulatory Oversight
Although certain businesses may be removed from the Foreign Business Lists, foreign investors remain subject to numerous other Thai laws and regulations, including tax laws, labor laws, the Personal Data Protection Act (“PDPA”), competition law, and industry-specific regulatory frameworks.
For example, digital platform businesses may still be required to comply with regulations governing digital platform services, while data center operators may be subject to telecommunications regulations, cybersecurity laws, and personal data protection requirements.
Similarly, businesses operating within regulated sectors such as telecommunications, finance, or energy may still require licenses and approvals from the relevant sector-specific regulatory authorities, notwithstanding any exemption under the FBA.
In other words, liberalization of foreign ownership rules does not necessarily reduce legal risk; rather, it shifts the nature of the risk from “structural risk” toward “regulatory and compliance risk.”
Future Outlook
Thailand’s evolving regulatory landscape indicates a gradual transition toward a more open economic system, particularly in industries driven by technology and innovation.
Nevertheless, such liberalization is expected to occur on a “selective liberalization” basis. Businesses relating to national security, natural resources, or industries deemed to directly affect domestic Thai operators are likely to remain restricted, while sectors capable of attracting foreign investment, technology, and expertise are expected to become increasingly accessible.
Accordingly, the critical issue for foreign investors is no longer merely the percentage of foreign shareholding permitted, but rather how to structure their businesses in compliance with Thai law, manage regulatory compliance risks, and establish transparent and accountable governance systems.
In an era where regulators place increasing importance on substance over form, the legitimacy and transparency of a business structure may become just as important as the commercial viability and profitability of the investment itself.
What Are “New S-Curve Industries”?
“New S-Curve Industries” refer to Thailand’s designated “industries of the future,” identified by the Thai government as new engines for driving national economic growth under the Thailand 4.0 policy. These industries focus on technology, innovation, and high value-added activities, replacing traditional industries that have begun to reach maturity.
The concept of the “S-Curve” derives from the growth curve of a business or industry, which typically begins with slow growth, followed by rapid expansion, and eventually reaches a saturation point. “New S-Curve” industries therefore represent the creation of a new wave of economic growth through emerging high-potential industries.
Thailand divides its target industries into two categories:
First S-Curve Industries
These are traditional industries in which Thailand already possesses strong capabilities but seeks to upgrade through technology and innovation, including:
- Next-Generation Automotive;
- Smart Electronics;
- Affluent, Medical, and Wellness Tourism;
- Agriculture and Biotechnology; and
- Food for the Future.
New S-Curve Industries
These are emerging industries that the Thai government seeks to develop as new growth engines for the economy, including:
- Robotics and Automation;
- Aviation and Logistics;
- Biofuels and Biochemicals;
- Digital Industries; and
- Comprehensive Healthcare / Medical Hub.
Today, the New S-Curve concept has expanded further to include industries such as AI, electric vehicles (EVs), clean energy, health technology, data centers, smart cities, and soft power industries, particularly within the Eastern Economic Corridor (“EEC”), where significant tax and investment incentives are available.
From both legal and investment perspectives, New S-Curve industries are particularly significant because qualifying businesses may receive:
- BOI investment promotion privileges;
- Permission for 100% foreign ownership;
- Exemptions from certain restrictions under the FBA;
- Tax incentives; and
- Easier visa and work permit procedures for foreign specialists.
Examples include:
- Software and AI platforms → Digital Industry;
- EV battery manufacturing → Next-Generation Automotive;
- Health Tech / Telemedicine → Medical Hub;
- Drone and automation technologies → Robotics; and
- Bio-plastics → Biochemical Industry.
Accordingly, when investors ask whether a particular business falls within the scope of a “New S-Curve Industry,” they are effectively asking whether such business may qualify for BOI promotion or other special investment privileges offered by the Thai government.
Disclaimer
This article has been prepared solely for general informational purposes and does not constitute legal advice. The information contained herein may not be exhaustive and may not reflect the most current legal developments. Readers should not rely upon this article as a substitute for legal advice from qualified legal professionals, who must assess the specific facts and circumstances of each case. The publication or use of this article does not create a lawyer-client relationship. All rights reserved under the Copyright Act B.E. 2537 (1994).
Author: Pinprapus Chartikavanich
Date: 25 May 2026