Applications for Permission for Carrying on a Service Business

Chalermchai Intarasupa | 16 June 2011

A. FBL Application

In order to obtain the FBL, the applicant must file an application and supporting documents with the MOC, and the MOC will consider and make its decision (objection or approval) on the application within 60 days following the application filing date. If the application is approved, the MOC will issue the FBL to the applicant within 15 days following the permission date. One criterion, among others, of the MOC in deciding whether to grant the FBL for a service business is that the company’s initial capital in carrying out the service business must not be less than Baht 3 million.

In granting an FBL, the MOC will consider each FBL application by taking into account the advantages and disadvantages to the country of the business applying for the FBL in various aspects, e.g., security, economic and social development, and technology improvement. The FBL application is a time-consuming process. Even though the MOC is required by the FBA to complete its consideration of the FBL application within 60 days after officially accepting the FBA applications, based on our experience, it may take up to six months before the MOC officials can officially accept the FBA applications as they will carefully check and study the contents of the FBL application so that they will be able to prepare an internal report summarizing the contents of the FBL application for review by their superior.

B. Protection under Thai – US Treaty

Generally, US nationals (natural persons or legal entities) can engage in most businesses in Thailand under the protection of the Thai – US Treaty on an equal basis with Thai nationals, except for the following businesses: communications (telecommunications), transportation, fiduciary functions, banking (involving depository functions), the exploitation of land, or other natural resources, and domestic trade in indigenous agricultural products.  In order to obtain protection under Thai – US Treaty, the company must:

  • be incorporated or registered under the laws and regulations of Thailand or one of the States within the United States;
  • have more than half of its capital held by US nationals with the majority of the individual shareholders or partners or members of such juristic person having US nationality;
  • have more than half of the directors being US and/or Thai nationals;
  • ensure that if any director is acting as an authorized director by him/herself to bind a company, that authorized director cannot be a national of a third country, but must be a US or Thai national; and
  • ensure that if there are several directors who can jointly sign on behalf of a company, at least half of those authorized directors must be US or Thai nationals and the remaining directors can be nationals of third countries.

In applying for protection under the Thai – US Treaty, the applicant must obtain a Certification Letter from the U.S. Embassy in Thailand certifying its qualification under the Thai – US Treaty and then submit the application form and supporting documents to the MOC. Upon the satisfaction of the completeness of the documents submitted and provided that the applicant’s qualification meets the aforementioned criteria, it will take approximately five business days for the U.S. Embassy to issue the Certification Letter and approximately one month for the MOC to issue the Business Certificate to the applicant. The applicant is permitted to carry on its business in Thailand upon receiving the Business Certificate.