Section 10 of the Foreign Business Act

Foreigners who operate a business in Thailand under a treaty to which Thailand is bound, such as Americans who open a company under the Thai-U.S. Treaty of Amity have their rights to operate business confirmed under Section 10 paragraph two of the Foreign Business Act of 1999 which states as follows:

• “Foreigners operating businesses specified in the Lists annexed hereto by virtue of a treaty to which Thailand becomes a party or by which Thailand is bound in consequence of obligations therefrom shall be exempt from the application of the provisions of [the Foreign Business Act which restricted foreign business] and shall be governed by the provisions of and conditions set forth in such treaty, which may, inter alia, confer upon Thai nationals or Thai enterprises the right to operate businesses in the countries of nationality of such foreigners as a matter of reciprocity.”

See the full context of Section 10 of the Foreign Business Act of 1999.

An interesting legal issue is the meaning and scope of the word “foreigners” as it appears at the beginning of Section 10, paragraph two, as well as the end of that paragraph. The DBD has clarified the issue as follows:

• The word “foreigners” as it appears at the beginning of Section 10, paragraph two has the same meaning as the definition of the word “foreigners” according to Section 4 of the Foreign Business Act both in the sense of individual persons as well as juristic persons. Specifically, it refers to such foreign persons who are operating businesses listed in the annexes to the Foreign Business Act according to a treaty in which it allows persons from one party to operate the business in the country of the other person where the treaty may define “foreigners” to include whichever type of persons from each party as it is agreed and accepted between the parties. Therefore, the definition of foreigners may be as defined by the principles of nationality laws or, as stated, in whatever way it is agreed to between the parties.

As for the word “foreigners” as it appears at the end of Section 10, paragraph 2; it refers to simply foreigners who are of the nationality of the other party to the treaty, it does not refer to foreigners in general, since Section 10, paragraph two has narrowed the meaning in this specific instance.

Foreign business restrictions in Thailand are complex. Foreigners who are interested in doing business in Thailand are advised to consult with competent Thailand Lawyers.

 

Category: Administrative Law, Business in Thailand