Can foreigners own a Bakery business in Thailand?

One way for foreigners to own a business in Thailand 100% is to get an investment promotion by the Board of Investment (BOI Thailand). However you cannot apply for Thailand BOI promotion for a bakery business because it is not one of business activities that we need to promote for foreign investment or expertise at the present. Another way to have 100% foreign ownership of a business in Thailand is to obtain a Foreign Business License.

The good news is that if the bakery business that foreigners want to have 100% or majority share is a bakery manufacturing company, you do not even need a Foreign Business License for the production of bakery products or for selling your products that you produce both for retail and wholesale. However please note the following:

  1. If the bakery company does not have a real manufacturing process, which means for example, it buys some products from suppliers and just adds some flavours or just repackages the products, then this business is not manufacturing, so it will need have a foreign business license.
  2. If the bakery company receives orders from customers to make the products according to the recipes and designs from the customers, then that is considered providing a service. This part of the business has to apply for a foreign business license.
  3. If the bakery company has its own recipe, but some customers bring their own brand and packaging, (so the bakery factory is making OEM products for these customers) then this is considered selling its own bakery products. This is not considered providing services. No need to apply for FBL to do this part of the business. However, we suggest writing to the Foreign Business section of the Department of Business Development to get their ruling on this part. We are just using the kind of ruling from the Revenue Department for manufacturers that also do OEM business, that it is considered selling their products even though in the OEM business they use their customers’ brand. The RD does not consider it a service business. (If it is deemed service business, the Thai customers (who are juristic persons) are required to withhold taxes from the manufacturer).

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