# Foreign Business Act (พระราชบัญญัติการประกอบธุรกิจของคนต่างด้าว พ.ศ. 2542)

Source: https://www.thailandpropertyinvestor.com/glossary/foreign-business-act

**Definition:** The Foreign Business Act B.E. 2542 (1999) restricts the businesses that foreigners and foreign companies may operate in Thailand. A Thai-registered company counts as foreign when half or more of its shares are held by foreigners.

The Act sorts restricted activities into three lists. List One is closed to foreigners outright and includes trading in land. List Two needs cabinet approval. List Three, which covers most service businesses, needs a Foreign Business Licence from the Department of Business Development unless a treaty or Board of Investment promotion applies.

For property buyers the Act matters in three ways. First, its ownership test sits alongside the Land Code's rule that a company with more than 49% foreign shareholding cannot own land. Second, section 36 criminalises the use of Thai [nominee shareholders](https://www.thailandpropertyinvestor.com/glossary/nominee-shareholder) to disguise foreign control, with up to three years in prison and fines of THB 100,000 to THB 1 million. Third, it bears on rental activity: letting a property you own is generally treated as passive investment, but operating a letting or property management business is a service that may need a licence.

Where that line falls is a grey area. Take independent legal advice before using any company structure. See [Thai company ownership risks](https://www.thailandpropertyinvestor.com/guides/thai-company-ownership-risks).