The Cabinet on 22 April 2025 approved amendments to the Foreign Business Act B.E. 2542 (1999) and assigned the Ministry of Commerce to urgently improve the law in order to reduce obstacles to employment, promote economic development, trade, and investment, and enhance Thailand’s competitiveness.

The proposal was made by the Office of the Council of State, based on recommendations by the Law Development Committee on the Amendment to the 1999 Foreign Business Act. The committee found that the act has been in use for almost 25 years, with an emphasis on “protecting” domestic entrepreneurs. This principle was consistent with foreign laws in the 1970s, but it is not in line with the present economic situation and the changing technological development.

As a result, Thai entrepreneurs do not accelerate the development of their potential and competitiveness, because they are protected by this law. Moreover, legal measures in this matter are not favorable for the relocation of future business bases into Thailand, resulting in the country's competitiveness being at a low level, when compared with other countries. 

An improvement in the situation would positively affect future businesses, which will lead to economic and industrial development by leaps and bounds. This development will significantly increase the gross domestic product (GDP), employment rate, and amount of taxes collected by the Government.

For instance, a startup business that uses innovation and high technology and has special characteristics in product presentation and fund mobilization from both Thai and foreign investors, is likely to benefit. The proportion of shareholding of entrepreneurs will decrease when more fund mobilization is carried out, leading to an increase in the proportion of shareholding of investors.

However, the 1999 Foreign Business Act specifies and limits the proportion of foreign shareholding, including the types of businesses that are prohibited for foreigners. The specification hampers the expansion of startups and may impose a negative impact on the country’s overall economy.

The Cabinet deemed it appropriate to entrust the Ministry of Commerce with improving the 1999 Foreign Business Act by changing the guiding principle from “protection” to “enhancing competitiveness potential.” The potential enhancement of the competitiveness of Thai entrepreneurs in various businesses should be taken into consideration as well.

The Ministry of Finance, the Ministry of Commerce, the Ministry of Interior, and Ministry of Labor, the National Economic and Social Development Council, and the Thailand Board of Investment have no objection to the proposed amendment to the law.