Investment regulation - Thailand


Holding restrictions

Foreign shareholding in Thai companies


The Foreign Business Act B.E.2542 (1999) limits foreign shareholding in a Thai company to 49% of a company's issued and paid up capital. Specific industries may be limited to 25% (for example, commercial banks). However, foreign holdings may be limited by the individual company's memorandum of articles. Details of the current foreign ownership shareholding limits for specific companies can be obtained from the SET.


In general, foreign investors can buy the same shares as local investors. Foreign investors can also purchase “Foreign Shares” on the SET’s Foreign Board. Foreign Shares have different ISINs from Local Shares. However, when the foreign ownership limit is reached, Local Shares held by foreigners cannot be registered and the foreign shareholder is not entitled to corporate actions and voting. Foreign investors cannot buy Local Shares on the first market that is, via IPO.

Alternatively, foreign investors can buy Non-Voting Depository Receipt (NVDR) shares to receive corporate action entitlements, similar to foreign shares except voting rights. NVDRs can be converted into foreign shares through normal queuing process, therefore, the share conversion depends on the foreign room availability.

Restrictions on shareholding in local banks

The Financial Institution Business Act B.E.2551 (FIBA) imposes a restriction on investors, as follows:

"No person can hold Financial Institution (FI) shares in excess of ten per cent (unless an approval is granted). Preference shares with no voting rights will not be taken into this consideration. Any person holding shares in excess of the ten per cent limit must dispose the excess within ninety days of its acquisition. Hence, no person shall hold shares in excess of ten per cent of total number of shares sold unless a special approval granted by the BOT.

"In cases where any person is found to hold FI shares in excess of the 10 per cent (unless an approval is granted), such person is required to dispose of such excess portion of shares within ninety days after the acquisition date or else, the BOT shall request a Court order to sell the excess FI shares in the market. It will be in accordance with the Court’s judgment.

"Local FI as issuing company may not pay dividend or any other form of money as a bonus to such person or allow such person to vote at a meeting of shareholders on account of the portion of shares in excess. Local FI shall examine its register of shareholders prior to each distribution of dividend or any other form of money as bonus and prior to a meeting of shareholders, and inform the Bank of Thailand of the results of such examination pursuant to the particulars and within the period of time prescribed by the Bank of Thailand."

Other special restrictions on shareholding in local FI include:

  • A local FI is not allowed permitted to hold any shares in another FI.
  • Any foreign commercial bank (with a branch in Thailand) is not permitted to hold any shares in a local FI.
  • A branch in Thailand of a foreign commercial bank is not permitted to hold any shares in another local FI.
  • A foreign commercial bank that does not have a branch in Thailand may hold shares in another local FI, provided that:
    • A holding in excess of 10% of the total shares sold is approved by the BOT;
    • A holding in excess of 5% of the total shares sold is reported to the BOT.

In summary, the FIBA does not allow FIs (for example, local banks, foreign commercial banks with branches in Thailand, and a branch in Thailand of a foreign commercial bank) to purchase or hold shares in any Thai commercial bank, except those acquired as a result of a debt settlement or a guarantee in respect of credit facilities granted provided that such shares shall be disposed of within six months, and except those acquired with special approval from the Bank of Thailand.

Foreign investor exemption

Foreign investors may be allowed, on a case by case basis, to acquire a majority shareholding in rescue situations. These limits can even be raised up to 100% under certain conditions. Majority ownership of a Thai company will only be allowed if the foreign investor is a strategic partner. It is unlikely to be allowed for portfolio trading.

Disclosure requirements

For details of the local domestic disclosure requirements, please refer to the Disclosure Requirements - Thailand.