Foreign Business Act penalties are the criminal sanctions in sections 34 to 38 and 41 of the Foreign Business Act B.E. 2542 (1999). They apply to a foreigner who runs a restricted business without permission, to a Thai person who fronts for that foreigner, and to the directors who allow it.
Most commentary on the Act stops at the Lists and the licence. A general counsel who is weighing a Thai structure needs the other half of the statute: who carries personal criminal exposure, under which section, and for how long. Every offence behind the Foreign Business Act penalties shares one penalty band, so the only real question on a given set of facts is which person sits under which section.
Status note, 30 September 2026. This article reads the English translation of the Foreign Business Act B.E. 2542 (1999) as published on a Thai government site. Confirm every section against the Thai text and any amendment before you rely on it. It is general information, not advice on a specific matter.
What are the Foreign Business Act penalties?
The Act sets one penalty band across its main offences: imprisonment for up to three years, a fine of THB 100,000 to THB 1,000,000, or both. Sections 34, 35, 36, 37 and 41 each carry that band, and section 37 adds a court order to cease the business. Each section targets a different person.
Section-by-section penalty table
| Section | Who is liable | Conduct the section describes | Penalty |
|---|---|---|---|
| 34 | A foreigner | Continues to operate after the licence is suspended or revoked, or after a final order to cease the business the certificate covers | Up to 3 years, or THB 100,000 to 1,000,000, or both |
| 35 | A foreigner | Takes part in another foreigner’s unpermitted business, or runs a business co-owned with that foreigner while holding it out as the first foreigner’s sole business, to help the other foreigner circumvent the Act | Same band |
| 36 | A Thai national or a Thai juristic person that is not a foreigner; also a foreigner who allows the conduct | Assists, aids and abets or participates in a foreigner’s unpermitted listed business; operates jointly while holding the business out as its own; or acts as the foreigner’s nominee shareholder | Same band |
| 37 | A foreigner | Operates a business in violation of section 6, 7 or 8 | Same band, and the Court orders the business to cease |
| 38 | A foreigner | Violates the minimum capital rule in section 14 or a condition set under section 18(3) | Fine of THB 100,000 to 1,000,000, plus a daily fine of THB 10,000 to 50,000 |
| 41 | Directors, partners and persons authorised to represent a juristic person | Connive at an offence the juristic person commits under section 34, 35, 36 or 37 | Same band as section 37 |
Who counts as a foreigner under section 4?
Section 4 decides who can commit the offences above. A foreigner includes a natural person without Thai nationality and a juristic person not registered in Thailand. It also includes a Thai-registered juristic person where foreigners hold half or more of the capital, or where a foreigner acts as managing partner or manager.
The definition then looks through the chain. A Thai-registered juristic person is itself a foreigner when persons in the earlier limbs hold half or more of its capital. Consequently, a company can carry a Thai name, a Thai register and Thai directors and still be a foreigner for the purposes of sections 6 to 8 and 37.
The classification matters for a second reason. Section 36 applies only to a Thai national or a juristic person that is not a foreigner. On the text, a Thai company that is itself a foreigner under section 4 therefore falls outside the nominee limb and inside the operating limb instead.
How do Foreign Business Act penalties reach the Thai nominee and the directors?
Section 36 reaches the Thai side of a structure in three ways. First, it covers a Thai person who assists, aids and abets or participates in an unpermitted foreign business. Second, it applies to a Thai person who operates jointly with the foreigner while holding the business out as its own. Third, it catches a Thai person who acts as the foreigner’s nominee in holding shares, where the purpose is to let the foreigner operate in circumvention of the Act.
The same section also reaches the foreign owner. Its closing words make a foreigner liable when he or she allows a Thai national or a Thai juristic person to commit the conduct. Therefore a passive investor, who never signs a contract or attends a meeting, still sits under section 36 if a Thai partner holds shares on his or her behalf.
Section 41 then moves the exposure to individuals. Where a juristic person commits an offence under section 34, 35, 36 or 37, the directors, partners and persons with authority to represent it face the same penalty if they connive at the offence. The wording does not confine section 41 to Thai juristic persons, so counsel should test its reach against the corporate chain on the facts.
Who answers under which section
| Person in the structure | Section that applies | What the text requires |
|---|---|---|
| Foreign owner who operates | 37 | Operating a business in violation of section 6, 7 or 8 |
| Foreign owner who does not operate | 36 (closing words) | Allowing a Thai person to commit the section 36 conduct |
| Thai shareholder | 36 | Acting as a nominee holding shares so that the foreigner can circumvent the Act |
| Second foreigner in a joint business | 35 | Participating in another foreigner’s unpermitted business |
| Director or authorised signatory | 41 | Connivance in an offence the juristic person commits |
| Foreigner who trades on after suspension | 34 | Operating after suspension, revocation or a final cessation order |
This map is our reading of the statutory text, not a statement about how a court will treat a given file. It separates the exposure of each person, so a review can address the shareholder register, the directors and the funding entities one at a time.
How long does exposure to Foreign Business Act penalties last?
Section 95 of the Thai Penal Code sets the limitation period by the maximum penalty. An offence punishable by imprisonment of more than one year and up to seven years falls in the ten-year band, and the period runs from the date the offence is committed. Because each offence above carries imprisonment of up to three years, it falls in that ten-year band.
Two questions remain open on the sources we reviewed. The first is whether continuing to hold nominee shares counts as one offence committed on the day of the arrangement or as a continuing offence. The second is which date starts the clock when a structure changes over time, for example through a later share transfer. Counsel should answer both from the decided cases before advising on any older structure.
What powers do officials have to investigate?
Section 30 gives the Registrar and competent officials two powers. They may make inquiries and summon any person for examination, and they may enter premises to examine documents, accounts and other evidence relating to a foreigner’s business. Section 40 sets a fine of up to THB 5,000 for a person who fails to comply with a written enquiry or summons.
The Department of Business Development reports what these powers looked like in the fiscal year 2024 (B.E. 2567). It examined 498 companies in four target sectors: tourism, real estate, hotels, and transportation and logistics. It found 390 with no suspicious nominee conduct, 72 that failed to follow instructions, disclose information or submit documents, 6 with suspicious conduct suggesting Thai nationals were assisting foreign business, and 30 it could not contact. Separately, it inspected 380 licensees and found 309 in full compliance and 71 in breach.
The report sections we reviewed give no prosecution counts. In those figures, companies that failed to respond (72) outnumber companies with suspicious nominee conduct (6). The penalty for failing to respond, under section 40, is a fine of up to THB 5,000 rather than the section 36 band.
Which routes exist for a structure that carries Foreign Business Act exposure?
The Act offers four lawful routes, and each answers a different question. None of them addresses conduct in the past on its face, so the treatment of earlier operation is a matter for advice on the facts.
Comparison of the four routes
| Route | Statutory basis | What it does | Limit |
|---|---|---|---|
| Foreign business licence | Sections 17 to 20 | Permits a List Three business. The Director-General considers an application within 60 days, issues the licence within 15 days of approval, and gives written reasons for a refusal within 15 days. A refusal is appealable to the Minister within 30 days | List One businesses are barred outright; List Two applications go to the Council rather than the Director-General |
| Treaty or government permission | Sections 10 and 11 | Exempts a foreigner with treaty rights from sections 5, 8, 15, 17 and 18; the Director-General issues a certificate | Depends on the treaty and the nationality of the shareholders |
| Investment promotion certificate | Section 12 | A promoted foreigner in a List Two or List Three business notifies the Director-General, who issues a certificate within 30 days | Lasts for the promotion period |
| Restructure out of section 4 | Section 4 | Changes who holds capital and who manages so that the company is no longer a foreigner | The structure must reflect real ownership, or section 36 applies again |
Our related guides cover each route in depth: the foreign business licence, the Treaty of Amity certificate, the foreign business certificate, and the choice between BOI promotion and a licence. For the land-specific side of nominee risk, read nominee land ownership.
Frequently asked questions
Is a Foreign Business Act violation a criminal offence?
Yes. Sections 34, 35, 36, 37 and 41 each provide for imprisonment of up to three years, a fine of THB 100,000 to THB 1,000,000, or both.
Can a Thai nominee shareholder go to prison?
Yes, on the text of section 36. A Thai national or Thai juristic person that acts as a foreigner’s nominee shareholder, so that the foreigner can operate in circumvention of the Act, faces imprisonment of up to three years, a fine of THB 100,000 to THB 1,000,000, or both.
Is the foreign investor liable if the Thai partner holds the shares?
Yes. The closing words of section 36 make a foreigner liable when he or she allows a Thai national or juristic person to commit the nominee conduct.
Are directors personally liable under the Foreign Business Act?
They can be. Section 41 applies to directors, partners and persons authorised to represent a juristic person that commits an offence under sections 34 to 37, where they connive at the offence. The penalty matches section 37: up to three years, a fine of THB 100,000 to THB 1,000,000, or both.
How long after a structure is created can prosecution start?
Section 95 of the Penal Code places an offence with a maximum of three years in the ten-year band, counted from the date of the offence. Whether continued nominee shareholding restarts that clock is a question we treat as open until decided cases settle it.
What happens if a company ignores a Registrar enquiry?
Section 40 imposes a fine of up to THB 5,000 on a person who fails to comply with a written enquiry or summons.
Reading the exposure before you decide
The Foreign Business Act penalties are the same for every offender, so the decision turns on who holds which role. Map the foreign owner, the Thai shareholders, the directors and the funding entities against sections 4, 36 and 41 first. Then choose between a licence, a certificate and a restructure using the route table above.
External sources for the primary text: the English translation of the Act on the Department of Special Investigation site, and the enforcement figures in the Department of Business Development annual report for B.E. 2567.
Instruct counsel on a Foreign Business Act exposure review
Lex Bangkok reviews the shareholder register, funding trail and signatory authority of a Thai company against sections 4, 36 and 41 under legal privilege. We identify which individuals sit under which offence provision, and advise on whether the foreign business licence, a certificate or a restructure fits the facts. Please contact us to discuss a specific matter.