Foreign investment in Thailand is governed by the Foreign Business Act of 1999. The Foreign Business Act restricts foreigners participating in certain businesses and limits foreign ownership in other forms of businesses. The foreign business act will generally limit the possibility of a foreign company absorbing a Thai company in Thailand. Most foreign owned companies in Thailand are restricted from becoming majority owners of a Thai company without government approval.
The Board of Investments and some international treaties allow certain foreign owned businesses to operate in Thailand without the restrictions of the Foreign Business Act. The Board of Investments provides incentives and privileges to foreign companies that start operations in targeted industries. A bilateral treaty between Thailand and a foreign nation sometimes provides special privileges to citizens of the foreign nation like Americans. With certain exemptions, Americans are exempt from the restrictions of the Foreign Business Act.
The Trade Competition Act of 1999 restricts mergers of businesses that may result in a monopoly or unfair competition without special permission by the Trade Competition Commission. The TCA prevents businesses from abusing a dominant position in market share. Companies that individually hold market share of at least 50% or is one of top three companies that collectively hold at least 75% market share are stated to have a dominant position. Dominant businesses are restricted in their business operations including mergers and acquisitions.