Thailand Set to Revise Foreign Business Act to Boost Investment, Innovation, and Transparency
In a decisive move to modernise its business environment, the Thai cabinet has approved “in concept” an urgent overhaul of the Foreign Business Act B.E. 2542 (1999) (FBA), with the new law expected to be drafted and completed within this year (2025). The proposed changes aim to liberalise foreign investment, promote digital economy sectors, and tackle the persistent issue of nominee shareholder structures.
This legislative shift signals Thailand’s commitment to becoming a more competitive and transparent destination for foreign direct investment (FDI), especially in the rapidly expanding digital and startup economies.
Thailand Foreign Business Law Reform: From Protectionism to a Competitive Economy
Following the Cabinet meeting on 7 May 2025, the Thai government, under Prime Minister Paetongtarn Shinawatra, endorsed proposed amendments to the FBA. The current law, in place since 1999, has long restricted foreign ownership across key industries, favouring domestic businesses under a “protection-first” principle.
However, this protectionist approach has become outdated amid technological disruption and the rise of the digital economy. The planned amendment will shift the legal focus from “protecting” to “empowering” the Thai economy by increasing foreign direct investment (FDI) in priority sectors such as:
Software and application development
Digital services and e-commerce
Innovation-driven startups
Advanced technologies and financial services
Key Changes to the Foreign Business Act (FBA) in 2025
The revised foreign business law will remove structural barriers and modernise investment rules across multiple fronts:
Relaxation of Foreign Ownership Limits
The existing 49% foreign equity cap in several non-strategic sectors will be lifted or raised, allowing for majority foreign ownership in industries that align with national economic goals.
Update to Restricted Business Lists
Several businesses currently on List 3, which requires a Foreign Business License (FBL), will be removed. These include HR and IT services within group companies, fintech operations, and digital platforms.
Simplification of Licensing Procedures
FBL requirements, often viewed as bureaucratic and opaque, will be streamlined. The process will become more transparent, time-bound, and investor-friendly.
Support for Startups and Tech Innovation
Acknowledging that modern startups rely on capital from both Thai and foreign investors, the amendments will enable startup-friendly shareholding structures, essential for venture capital and cross-border partnerships.
Reform Backed by Thailand’s Economic Strategy
The reform aligns with the 20-Year National Strategy (2018–2037) and the Bio-Circular-Green (BCG) Economy Model, both of which emphasise innovation-led, inclusive, and sustainable economic development.
Key agencies, including the Ministry of Commerce, Ministry of Finance, Ministry of Interior, Ministry of Labour, the National Economic and Social Development Council (NESDC), and the Board of Investment (BOI), have all expressed support for the revision. The Ministry of Commerce has been tasked with drafting the amended law within this year (2025).
According to Deputy Government Spokesperson Karom Polpornklang, these changes are vital to improving GDP, generating jobs, and increasing national tax revenues by unlocking investment in high-growth sectors.
Thailand’s Crackdown on Nominee Shareholding Structures
While easing restrictions for genuine investors, the Thai government is intensifying efforts to dismantle illegal nominee arrangements, a longstanding concern that undermines legal clarity in foreign business operations.
From September 2024 to January 2025, the Department of Business Development (DBD) initiated legal proceedings in 820 nominee-related cases, representing over THB 12.5 billion in business value with more than 27,000 additional entities are currently under investigation. Proposals are under review to increase penalties, including asset confiscation and longer prison sentences.
This crackdown is meant to protect legal business operations while ensuring compliance with Thai investment law and preventing circumvention of ownership rules.
Why This Matters for Foreign Investors in Thailand
These landmark changes signal Thailand’s commitment to becoming a more open, innovation-friendly, and transparent economy. They also reflect an effort to harmonise foreign business laws with international standards seen in markets like Singapore, Malaysia, and Vietnam.
Key implications for foreign investors:
Easier entry and fewer restrictions in certain high-growth sectors
Lower compliance burdens and faster licensing
Clearer legal structure for equity investment and ownership
Improved legal certainty with stricter enforcement against illegal nominee use
The 2025 revision of the Foreign Business Act is more than a legal update, it’s a strategic shift towards openness, competitiveness, and global relevance.
Foreign investors, venture capital firms, and technology-driven enterprises should take note of these emerging opportunities. As Thailand simultaneously opens doors to foreign capital and tightens enforcement on illegitimate practices, a new era of investment transparency and economic innovation is unfolding in the region.