You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

June 26, 2015

Licensing Reform on the Way in Thailand

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

In Franz Kafka’s novel The Castle, the protagonist tries in vain to get in touch with a mysterious group of administrators who run a small village from a castle. The character is challenged to learn the constantly changing ways and customs of the castle’s imposing bureaucracy.

Governments the world over employ vast armies of bureaucrats to administer official business, which includes everything from granting marriage licenses to approving multibillion-dollar investment projects. Thailand is no exception. But a new law called the Licensing Facilitation Act is aimed at making the bureaucracy easier to navigate and help Thailand’s business competitiveness.

As its name implies, the Act seeks to make it easier for businesses and individuals to obtain official licenses and approvals from government agencies. To that end, it promotes two overarching principles: greater transparency and less administrative discretion.

Indeed, as with the bureaucracies of other countries, the licensing process within Thai government agencies is often opaque. The time required to obtain a license is also uncertain, and officials can arbitrarily seem to change their minds about what paperwork is needed.

All of this makes doing business more difficult—and increases opportunities for corruption, as exasperated applicants will do whatever it takes to get their license.

The Licensing Facilitation Act, which goes into effect on July 21, takes aim at these problems. It requires licensing authorities to prepare a “licensing manual.” The manual must contain all the rules, procedures, and conditions to obtain a license as well as when the license must be issued.

If a license application is complete according to the manual, an official cannot ask for more documents. In other words, the manual should bring welcome predictability to the license application process.

What is more, license applications can be submitted electronically instead of by paper if allowed by the manual. This can save applicants significant time and expense.

If the application has a defect or does not fulfill the requirements stated in the manual, the official must ask the applicant to remedy the application immediately. If this is not possible, the official must make a record of the defect and the period of time needed to fix it.

Importantly, the official must make a decision on the license as per the timeline in the manual. If the deadline is not complied with, the official must explain the delay to the applicant and the Public Sector Development Commission, a government body under the Prime Minister’s Office, every seven days until a decision is made.

If the official fails to explain the delay, he or she can be liable for damages. The law does not state how damages would be calculated or to whom the official would be liable.

Another key feature of the Act is the creation of a One Stop Service Centre. The cabinet has the authority to establish such a center to receive all applications under the laws related to licensing. The One Stop Service Centre would be its own government agency, with branch offices under different ministries and different provinces.

The One Stop Service Centre would accept applications, inform applicants of licensing rules, send applications to the relevant agency, and give recommendations to the cabinet on improving licensing rules and application requirements. It can greatly ease the burden on applicants, as people would not be required to visit various agencies to obtain multiple licenses needed for an investment project.

The Licensing Facilitation Act also contains oversight mechanisms—for example, if a licensing official does not grant a license due to dishonesty or negligence, the relevant authority can bring disciplinary action against that official. Further, the Public Sector Development Commission can inspect whether the licensing officials’ work flow and period of time for granting the license stated in the manual are compliant with “good governance” rules. These rules are not specifically defined in the Act.

Additionally, licensing authorities must review the laws that empower them to grant licenses every five years. The authorities must submit reports of their review to the cabinet for consideration.

The Licensing Facilitation Act applies to almost all government licensing procedures, with a few notable exceptions. Courts are exempt, as are natural resource and environmentally related licensing. Military licenses are also generally exempt from the law.

The Act has the potential to make obtaining official licenses and approvals much easier. And reducing officials’ discretion in the licensing process will help to stop opportunities for corruption. Successful implementation would not only enhance Thailand’s investment environment but also improve overall governance. A more transparent and less Kafkaesque bureaucracy would be a boon for Thailand.

Download Full Article
Related Professionals

Practices

Compliance and Investigations

Corporate/M&A

Location

RELATED INSIGHTS​ 

September 15, 2026
The Myanmar Investment Commission (MIC) has issued a notification that gives investors with projects in Myanmar clearer guidance for securing approval and for changing, expanding, or exiting an approved project. Issued on August 19, 2026, MIC Notification No. 5/2026 replaces MIC Notification No. 26/2021 and sets procedures for state or regional investment committees to review, approve, and supervise investment projects, including project amendments, investment increases, land-use rights applications, compliance inspections, and suspension or termination of approved businesses. Endorsement Application Timeline and Deemed Acceptance In Myanmar, prospective investors seeking approval under the Myanmar Investment Law generally do so through an MIC permit or an MIC endorsement, depending on the nature of the investment. While certain large-scale investment projects require an MIC permit, projects that are not required to obtain an MIC permit may instead apply for an MIC endorsement. Investors seeking MIC endorsement for their planned projects typically submit their applications to the relevant state or regional investment committee. These committees are established under the Myanmar Investment Law and are authorized to approve investments of less than USD 5 million, subject to the project’s nature and location. MIC Notification No. 5/2026 specifies that upon receiving an endorsement application, the relevant investment committee office will check it for completeness and determine whether it can be considered at the state or regional level or must be referred to the MIC; if it must be forwarded to the MIC, this will be done within 10 working days. If an application is within its purview, the committee may reject the endorsement application within 15 working days of receipt; otherwise, the application is deemed accepted. If approved, the endorsement certificate will be issued within 10 working days of the approval decision, subject to applicable procedures. Endorsement Certificate Amendment The notification clarifies which amendments a state
Read More
September 9, 2026
Certain securities, derivatives, and treasury activities in Thailand were opened to foreign investors when Thailand’s Ministry of Commerce published two new ministerial regulations in the Government Gazette on August 28, 2026. The regulations significantly broaden the service activities that foreign-owned businesses may conduct without a license or certificate under the Foreign Business Act B.E. 2542, as amended (FBA). Securities and Derivatives Business Exemptions Prior to the issuance of these ministerial regulations, the exemptions covered (1) securities brokerage and derivatives brokerage with their only underlying assets being agricultural commodities, financial instruments, and securities; and (2) dealers, advisers, and fund managers conducting derivatives business under Thailand’s derivatives laws. The ministerial regulations provide broader exemptions. In addition to derivatives under the laws on derivatives as before, the following two major categories are provided: Derivatives whose underlying assets or variables fall outside the scope of Thailand’s laws on derivatives. This addresses a gap in the previous framework, which did not comprehensively exempt derivatives tied to nonregulated underlying assets or variables, such as certain commodities. Foreign brokers, advisors, and fund managers can now facilitate a broader range of hedging and risk management instruments without triggering FBA licensing requirements. Derivatives traded outside a derivatives exchange, or over the counter (OTC), whose payments are calculated by reference to foreign exchange rates or interest rates. This removes an FBA licensing barrier for foreign providers of widely used OTC hedging products, broadening the solutions available to importers and exporters managing currency exposure and to borrowers seeking greater certainty over financing costs. The ministerial regulations also exempt brokers and agents handling transactions involving either of these two derivatives categories. For securities businesses, the ministerial regulations add exemptions for margin loans used to purchase securities and for securities repurchase transactions. These additions clarify whether such activities qualify as exempt brokerage
Read More
September 4, 2026
Foreign business restrictions on telecommunications, treasury center businesses, and intragroup support services were eased when Thailand published the Ministerial Regulation Prescribing Service Businesses Not Requiring Permission for Foreign Business Operations (No. 5) B.E. 2569 (2026) in the Government Gazette on August 28, 2026. The ministerial regulation expands the categories of service businesses that foreign investors may operate without a foreign business license (FBL) under the Foreign Business Act B.E. 2542 (1999) (FBA). Of particular relevance to the telecommunications, fintech, and technology sectors, the ministerial regulation exempts: Type 1 telecommunications licensees, which do not have their own networks; Treasury center businesses operated in accordance with Thailand’s exchange control regulations; and Certain intragroup administrative, human resources, and information technology management services. Telecommunications Services Foreign-owned businesses providing telecommunications services under a type 1 telecommunications license may now operate without obtaining an FBL. This may streamline market entry for qualifying telecommunications and digital infrastructure businesses. The exemption applies only to the FBA licensing requirement. Operators must continue to comply with applicable requirements under the Telecommunications Business Act and the regulations of the National Broadcasting and Telecommunications Commission, and the change does not affect foreign ownership restrictions applicable to type 2 or type 3 telecommunications businesses. Treasury Center Businesses The ministerial regulation also exempts qualifying treasury center businesses from the FBL requirement. This may facilitate centralized treasury functions in Thailand, including liquidity management, foreign exchange management, and intragroup funding arrangements. Treasury center operations remain subject to applicable requirements of the Bank of Thailand and other competent authorities. Intragroup Administrative, HR, and IT Services Certain administrative, human resources, and information technology management services provided between affiliated entities are also exempt, provided the relevant entities satisfy prescribed ownership or management criteria. The exemption is available where the service provider and recipient are related through specified ownership
Read More
September 1, 2026
Thailand has taken another step toward liberalizing its foreign business framework, exempting additional service activities and derivatives brokerage or agency businesses from the licensing requirements of the Foreign Business Act (FBA). Since the FBA came into effect, Thailand has taken a measured approach to opening its economy to foreign investment. While the FBA regulates foreign participation in businesses that may affect domestic interests, the framework has also evolved to allow foreign participation in certain business activities where sector-specific laws and regulatory frameworks already provide sufficient oversight, making additional FBA restrictions unnecessary. This is particularly true where Thai businesses are sufficiently capable of competing in certain service sectors, or where liberalization is intended to facilitate the provision of services among companies within the same corporate group. Against this backdrop, two new ministerial regulations have been issued pursuant to the FBA. Service Businesses Under the FBA Under the FBA, certain categories of business are restricted for foreign operators. List 3 of the FBA sets out businesses that foreigners may operate only if they obtain a foreign business license (FBL) or a foreign business certificate (FBC), or unless a specific exemption applies. List 3 (21) covers “other service businesses,” which is a catch-all provision that captures a wide range of service businesses not specifically enumerated elsewhere in the FBA. In practice, this means that most service activities carried on by foreigners in Thailand require an FBL or FBC unless otherwise exempted. Notwithstanding the foregoing, the FBA provides a mechanism to address this breadth by empowering the Minister of Commerce to issue ministerial regulations excluding specific types of service businesses from List Three (21). Once a service business is so excluded, foreigners may operate it without obtaining an FBL or FBC. Prior to the new regulations, four ministerial regulations had been issued to
Read More