Can a Chinese-invested factory in Thailand be 100% foreign-owned?

01How the Foreign Business Act decides whether your company is foreign

Start with how the test works. The Foreign Business Act (FBA) decides whether a company is a foreign company by looking at whether non-Thai shareholding reaches 50% — Thai shareholders have to hold more than half before the company is not treated as a foreign juristic person. Whether a foreign juristic person is then restricted is a second question: whether the business falls on one of the FBA's three restricted lists.

Manufacturing itself is generally not on any of the three lists. A Chinese-invested manufacturer setting up a plant in Thailand can normally be wholly or majority foreign-owned, without finding a Thai shareholder to make up a ratio. What actually goes wrong is almost always one of the three things below. See how the three restricted lists work.

02Do not let listed activities slip into your scope of business

This is where companies come unstuck most often. At registration the objects clause tends to pick up trading, retail, distribution, leasing and installation engineering services alongside manufacturing — and those are precisely the items sitting on the FBA's second and third restricted lists, where a foreign company needs a licence before it operates. The situations we see most:

• Reselling group products. Beyond selling what the plant makes, taking other products of the parent company and selling them in Thailand is trading and distribution in nature, and lands on a list.
• Charging for installation and commissioning. Installing equipment for customers and billing engineering services separately may be treated as a listed engineering service.
• Renting out plant or equipment. Renting spare capacity to outsiders is leasing, which is also within the scope of the lists.

Operating a restricted business without a licence, or outside the scope of one, carries imprisonment of up to three years or a fine of 100,000 to 1,000,000 baht under section 37 of the FBA. It is not something you settle afterwards by filing a form.

03Registered capital, and money that has actually been paid in

The FBA sets a minimum capital requirement for a foreign company operating in Thailand, and restricted-category business is held to a higher standard. One authoritative guide records that standard as not less than 25% of the estimated average annual operating expenses for the first three years of operation, but published versions differ on this point, so the figure that applies to you should be taken from the current published text of the Department of Business Development (DBD) rather than from any secondary summary.

Breaching the minimum capital requirement carries a fine of 100,000 to 1,000,000 baht, plus a further daily fine of 10,000 to 50,000 baht.

What matters more is that the money is real. A Thai shareholder with no capacity to fund the subscription, no trace of involvement in the business, and a dividend arrangement that plainly does not match the registered shareholding is exactly the pattern regulators and due diligence teams look for when they screen for nominee structures.

Nominee shareholding is a criminal red line, not a fallback option. Putting shares in the name of a Thai friend or employee to make up the Thai ratio is a criminal offence under section 36 of the FBA: imprisonment of up to three years or a fine of 100,000 to 1,000,000 baht. A foreign party that knowingly goes along with it commits the offence too, and directors may be personally liable. It should not appear in any structure. See where the nominee line falls.

04Adding a business line later touches the lists again

Being clean at incorporation does not keep you clean. A year or two in, plenty of plants add trading, after-sales repair, or a group shared function — finance, HR or IT shared services. Every addition means running the lists again.

There are two lawful routes. One is to apply to the Department of Business Development (DBD) for a Foreign Business Licence (FBL) covering the List 3 activity. The other applies where the company already holds BOI promotion and the business falls within the promoted scope: under section 12 of the FBA it only has to notify and collect a certificate, the authority must issue that certificate within 30 days of receiving the application, and the corresponding FBA restrictions are waived for the promotion period.

One further point to keep in view: in 2026 the Thai cabinet approved a draft amendment that would move nine businesses, intra-group shared services among them, off the restricted list. It has not been published in the gazette and is not in force, so it cannot be used as a current rule.

05Why there is no generic answer here

What the three have in common is that the conclusion depends on how the objects clause in your articles is written, how the capital is actually paid in, and which route you take when you add a line of business. None of that has a general answer. It has to be worked through by our advisers, clause by clause, against your articles of association, your BOI approval and the contracts the business actually performs.

Thai rules on foreign market access are in the middle of several parallel amendment tracks. What is above reflects the rules at the date checked; before acting on a specific case, take the current published texts of the DBD and the BOI as authoritative. What the company and shareholding engagement covers.