Foreign businesses seeking to set up a branch office must also obtain a Foreign Business License and adhere to the regulations under the Foreign Business Act. The Act draws a clear line on what activities are regulated and restricted to foreign companies. While some sectors are totally prohibited to foreign entities, others are open through the explicit permission of a designated government agency.

Since the branch office is an extension of the head office, this business entity is allowed to generate revenue in Thailand and must meet the requirements specified in the Foreign Business Act of 1999, such as obtaining a Foreign Business License (FBL) and registering for VAT. Further, the head office is held responsible for the liabilities of the branch office.

Thailand’s Foreign Business Act of 1999 restricts the activities foreign companies may engage in and are thus reserved only for Thai nationals. There are three lists annexed in the Foreign Business Act.

1. List one – business activities not permitted for foreigners due to special reasons (e.g., animal husbandry, fisheries, farming or horticulture, trading in land).
2. List two – business activities that are related to national security, natural resources, or traditional handicraft. Such activities require special approval from the Cabinet (e.g., manufacture, distribution, and maintenance of firearms, wood carvings, manufacture of Thai musical instruments, mining of rock salt, furniture production, and mining activities).
3. List three – business activities where Thai nationals are currently unable to compete with foreign businesses. Still, foreign companies will need the approval of the Thai Ministry of Commerce to engage in activities under list three (e.g., rice milling, forestry, legal services, accountancy, engineering, tourism, advertising, and sale of food and beverages).