Corporate Business Licences

There are a number of licenses available to the new business owner in Thailand but they all depend on what kind of business is being done.

Restaurants will need to be licensed, and if you want to sell alcohol that is another, so are cigarettes. Importers and exporters will need an import/export card, if you are involved in food or cosmetics you will need an FDA license. Other specific categories that require licenses are education and childcare, tourism, medical, and food and beverage businesses.

The licenses can only be applied for after the company has been registered with the Ministry of Commerce and depending on the license, may need to be renewed annually. Sunbelt Asia’s team of lawyers in Bangkok can assist you in managing all your licensing requirements, below are some of the main ones that most people find they need

Restaurant or bar
For those who are starting a restaurant business or a bar selling food, a food license must be applied for from the nearest district office. You need to make sure you have the location in place before applying as they will inspect the premises before approving the license.

Requirements

• The Construction permit for the building must cite that it can be used as a restaurant.
• Thai employees are required to take a multiple choice food safety quiz at the District Office.
• Company registration documents
• Documents from the legal owner of the property
• Copy of signing director’s passport or Thai ID copy
• Commercial name of the restaurant, which may be different from the company’s name
• Photos of the front and inside of the restaurant
• Layout of the restaurant (interior and floor plan)
• Total size in square meters of the whole restaurant (including kitchen)
• The government fee is calculated based on the square meters of the restaurant.

If you wish to serve liquor, then a liquor license will also need to be applied for at the local Excise Office. There are restrictions on what time you will be able to sell alcohol, from 10am to 2pm and from 5pm to midnight.

Similar documents are required for a business wishing to sell alcohol but it is important to note it cannot be near a school or temple.

Each of these licenses must be renewed annually.

Tourism
If you are involved in a Tourism business and wish to obtain a Tourism Authority of Thailand license (TAT), then it is important to note that there are restrictions on ownership of the company. Tourism businesses are regulated under the Tourist Business and Guide Act and are a restricted activity so you need to register a Thai Limited Company that must be at least 51 percent owned by Thai citizens, and at least half of the directors must be Thai citizens and all unlimited liabilities must be of Thai nationality.

A tourism business is specifically listed as organizing or operating tours, sight-seeing, and guide services but does not include transportation of passengers, or hotel booking. It is important to note that the tourism business operator cannot act as an agent, but must sell its services directly to the tourists.

Requirements

• Thai Limited Company with 51 percent Thai ownership and at least 50 percent Thai directors. The signing director must be Thai, cannot be under 20 years old, have a criminal record, and be credit-worthy.
• A deposit must be paid to the TAT; the deposit is 10,000 baht if the tourism activities take place in one location, 50,000 baht for domestic tourism, 100,000 baht for inbound and 200,000 baht for outbound tourism.
• Tourist and Guide Insurance – based on number of clients serving a day, annual insurance premium is approximately 15 Baht per person and each client is only covered for 15 days.
• Criminal record check on the Thai Managing director or two licensed tourism business operators who will certify the credibility of the applicant; they will have to complete their part of the application and supply copies of their TAT licenses.
• Lease agreement on premises (two years), letter from landlord, a map of the office and two photos of the front of the office showing the address and name.
• Certificate of Registration and objectives of the company
• List of shareholders’ names certified by The Minister of Commerce
• Memorandum of association certified by The Minister of Commerce
• Company regulations or report of company establishment’s meeting certified by The Minister of Commerce
• Copy of the director’s personal ID card and his registered address which must be certified by the director
• Company seal
• Business plan
• The business sign must be clear and the TAT license visible.

The TAT license is valid for two years but reapplication must be made 120 days before expiry and if the company is dissolved the license must be returned to the TAT.

Hotel License
There has been a great number of new accommodation businesses started that did not apply for a hotel license and have subsequently found themselves shut down until the license is obtained, so it is always a good idea of purchasing a hotel business to check that it is fully licensed, or if you are starting a hotel, apply for the license immediately. Sunbelt Asia’s lawyers can make sure you stay on top of this important legal requirement as those found to be operating a hotel without a license face a jail sentence up to one year and a fine up to THB 20,000 baht. The authorities may also fine the business 10,000 baht each day if they continue to operate the business illegally.

Large hotels can be promoted by the BOI and must be more than 100 rooms, with a minimum investment of 500 million baht not including the cost of land and working capital.

For everyone else the best route is a Thai Limited Company but be aware that the shareholders must be majority Thai and a signing director must be Thai in order to apply for the license. One exception to this rule is for an Amity company which may allow an American to hold the hotel license but cannot own the land the hotel is on.

Some hotels may be exempt from the license; under the Ministerial Regulation of 2008 a hotel license is not needed if there are no more than 4 rooms in total, cannot serve more than 20 guests, and qualifies as a small business, that provides additional income for the owner. This kind of hotel must still report its daily rental to the government. Any hotel with more than 4 rooms needs a license.

Requirements

• Thai director signs the application, majority shareholders are Thai citizens.
• The Construction Permit should have allowed for a hotel business.
• Apply with the Provincial Administration Organization.
• Hotel premises are inspected by the Health, Environmental and Construction authorities.
• Safety standards must be fulfilled such as fire extinguishers, emergency stairways for buildings with more than four floors, emergency lighting and others.
• A hotel of more than 80 rooms needs an Environmental Impact Assessment.

The application can take six months before approval and the license is valid for five years and must be renewed before the expiry date.

School License
A school license needs to be applied for before opening any kind of school in Thailand. The majority of the shareholders must be Thai, the director and principal must be a Thai national, at least 20 years of age, hold a bachelor’s degree or higher, and should not be working in another school or teaching institute at the same time as making the application.

Setting up an International School is still regulated by the Ministry of Education which defines an International School as “an educational institution providing an international curriculum or international curriculum which its subject’s detail has been adjusted or a self-organized curriculum, which is not the Ministry of Education’s. A foreign language is used as the medium of teaching and learning and students are enrolled without restriction or limitation on nationality or religion or government regime, and are not against the morality or stability of Thailand.”

To set up an international school the Ministry of Education has the following requirements;

• The applicant for international school license may be a person or a juristic person with the following qualifications:
• The person must be of Thai nationality by right of birth, with a qualification at least a bachelor’s degree and with other qualifications according to the Private Education Act B.E. 2525 (1982) and to the order imposed by the Ministry of Education.
• A juristic person must have education as his/her only purpose
• More than half a number of the shareholders or committee members must be of Thai nationality
• The person signing on behalf of the juristic person applying for international school license must be of Thai nationality by birth
• The person must have other qualifications according to the Private Education Act B.E. 2525 (1982) and to the order imposed by the Ministry of Education.

There are also requirements as to building size, layout, location and ownership.

• The land must be 1 rai for pre-primary, 2 rai for primary and secondary and 5 rai if kindergarten to secondary. Building height is mandated as is green space.
• The owner of the land must be the licensee or have a lease contract of at least 10 years for pre-primary and 15 years for primary.
• The applicant needs to propose a curriculum to the Ministry of Education for approval and must provide Thai language and culture instruction at every level.
• The Manager, Headmaster/Headmistress must be Thai nationals, hold a Bachelor’s Degree in Education, have at least 3 years experience.
• The school must obtain international accreditation within 12 months, and Quality Assurance from the Ministry of Education within 12 months of the license being granted.
• The school must report to the Office of the Private Education Commission on students’ exam achievement every academic year.

Setting up a language school has similar requirements as to the license holder’s nationality and educational qualifications, there are requirements as to building set up including number of restrooms, and a reception and waiting area.

• Location and floor plan of building (s)
• Number of classrooms and sizes; there must be at least two classrooms
• You must submit a curriculum in detail (format provided by Ministry of Education), teaching methods, and evaluation and assessment methods. All documents must be translated into Thai.
• School regulations
• Student fees
• Maximum number of students

It is important to note that you do need to create a company to apply for the license, once you meet all requirements the application can take 90 days. Sunbelt Asia’s team of lawyers and legal advisors can assist you in handling all details of the application.

Import / Export license
The recent improvements and changes in the Thai import / export system now means you can have a paperless license, track all imports and exports electronically, and even pay customs duty online.

First, you need a Thai registered company to apply for a license and must be registered for VAT.
The company must have a corporate bank account and to apply must show

• A copy of the company affidavit updated within six months of applciation
• Two copies of the Value Added Tax certificate (PP 20)
• Copy of the first page of the corporate bank account and bank statement
• Copy of seal registration (BAJ 3)
• Copy of passport of the director
• Power of attorney 

It is key that a company that only exports can be 100 percent foreign owned but there are restrictions on imports that may require additional licenses, for example food, drugs, beauty products will require an FDA license while unfinished clothing parts, used cars and motorcycles and printing machines require a license from the Department of Foreign Trade.

As the Thai government has really improved on this system to ramp up exports, the license generally only takes a day to receive.

E-commerce license
Thailand has one of the fastest growing e-commerce industries in South East Asia and in 2001 the Thai government implemented the Electronic Transaction Act to cover all electronic transactions. The BOI currently has promotions available for e-commerce businesses.

A business operating in Thailand with one or more websites selling products or services needs to be registered as a Thai Limited Company and apply for an e-commerce license. The application needs to be submitted within 30 days after the website becomes active and needs to include

• The name of the website.
• Nature of the goods or services being sold.
• The date on which the website started operations.
• Method of payment for the purchase.
• Evidence of the domain name registration.
• Companies with majority foreign shareholders need a Foreign Business License.
• If the business is focused on direct sales within Thailand then it may need to be registered with the Office of the Consumer Protection Board (OCPB) under the Direct Sales and Direct Marketing Act.

FDA License
The Thai Food & Drug Administration requires licensing for many items in Thailand including food, drugs, cosmetics, hazardous substances, narcotics, and medical equipment. The FDA ensures the protection of consumers in Thailand by ensuring the quality of all products. If you plan on manufacturing or importing any of these items, then an FDA license will be needed.

The FDA’s approval is based on five criteria

• Pre-marketing control of the factory, product, and advertising.
• Post-marketing control: regular checks of the previously controlled facilities and products.
• Post marketing surveillance of consumer side effects.
• Adequate and accurate consumer education
• Technical support and cooperation with other agencies organized by the FDA

It can take from a week to several months to obtain FDA certificates, generally cosmetics take about a week while general medical devices can take up to four months. Food and pharmaceuticals can take several months. It is important to add that you need a license for each item.

Medical & Drugs
The FDA categorizes drugs into four categories each of which have separate registration requirements; modern, general medicines, traditional medicines, and veterinary medicines.

Medical devices are regulated by a special division in the FDA and can require licensing or registration.

Cosmetics
Cosmetics will need to be licensed, and each type will require a separate license but if the ingredients are already controlled under Thai law then the issuance of the license can be speedy. If the ingredients are specially controlled this requires registration which may take longer.

Food
All labels on food imported in to Thailand must be fully translated into the Thai language.  The food must be analyzed, including the details of processing and ingredients to ensure meeting Thai FDA standards and a separate manufacturing license must also be approved. Import licenses must be renewed every 3 years.

Obtaining a license to import or manufacture food or drugs in Thailand requires a large amount of documentation and having registration certificates and documentation from the country of origin will be very helpful in supporting the application. It is important to have a lawyer review all documents and the application thoroughly before filing with the FDA. Fees will vary depending on the item being registered or licensed.

Navigating the rules and regulations of licensing in Thailand can be difficult and confusing, add in the language barrier and many new business owners find themselves in violation of the laws. Sunbelt Asia’s team of lawyers are experts in finding their ways through the murky waters of Thai law and will make sure that your business is fully compliant with all licensing requirements.