Three lawful routes past the foreign shareholding cap

01Route one: exemption through promotion status

A foreign person who has obtained investment promotion, or written permission under the industrial estate legislation for export trade or industry, and whose business falls in the second or third schedule of restricted activities, only needs to notify the department and obtain a certificate — no separate ordinary business licence is required. Once the department has verified the promotion certificate or permit, it must issue the certificate within 30 days of receiving the application.

For the duration of that promotion or permit, the foreign person is exempted from the restrictions of the Act (the statute lists a small number of provisions that remain).

The practical value of this: it is the direct statutory basis for the statement that promotion status can lift the ordinary shareholding restrictions — not a loose policy claim. An adviser explaining this to you should be able to point to the notification-and-certificate mechanism and the 30-day issuing period. Being able to describe the mechanism, and not being able to, are two different levels of reliability.

02Route two: treaty-based eligibility

Companies qualifying under a treaty or free trade agreement between Thailand and certain countries may likewise notify and obtain a certificate, exempting them from restrictions under several provisions, with the same 30-day issuing period.

One caution matters here: the treaty exempts restrictions on shareholding in the business, not the restriction on land ownership. Some companies read the exemption as covering land purchase as well — these are separate questions, and holding land requires its own route. Chinese-invested companies should note in particular that whether this route is available depends on whether an agreement exists between Thailand and the parent company's home country.

03Route three: other legislation taking precedence

Where another statute already makes specific provision for foreign shareholding, partnership, investment or operating permission in a given sector, that statute governs and the Foreign Business Act no longer applies. Telecommunications and finance are examples of sectors with their own legislation.

The use of this provision is to establish which framework applies first: does your business sit in the general restricted schedules, or under a sector statute? The thresholds, the approving authority and the caps differ. Get the framework wrong and everything built on it is wasted.

04Why a nominee is not among the three

Because it is not an exemption — it is circumvention. The law contains specific anti-avoidance provisions on holding shares in the name of a Thai person for a foreigner; a finding carries criminal liability and can render the shareholding arrangement itself void. Verification at the registration stage has been tightening in recent years, and detection methods with it.

A more practical point: the risk in a nominee structure is asymmetric — the criminal exposure and the loss fall on you, while the person who suggested it usually bears no consequence at all. An adviser who proposes a nominee to solve a shareholding problem has, in that proposal, given you the strongest risk signal you will get.

05The order to work through

The routes above are not alternatives to pick from — they are a sequence, and taking them out of order is what produces the nominee arrangement:

• First, establish where the business falls. General manufacturing that is not in the restricted schedules can usually be wholly foreign-owned in the first place, which makes a nominee entirely unnecessary — this single step disposes of a large share of the cases where people believe they have no choice.
• If it is restricted, look at the promotion route first. Whether promotion is obtainable turns on the activity item and the project conditions — the same exercise as tier assessment.
• Then check treaty eligibility and sector legislation.
• Only if none of the three works does the conversation turn to joint venture design — and that means arranging control through the articles, the board and a shareholders' agreement, not through a name on a share register.