Foreign Business License (FBL) vs BOI Promotion: Which Path Is Right for Your Hotel in Thailand?

If you’re a foreign founder planning a hotel, resort, serviced suites, or mixed-use hospitality project in Thailand, your first structural fork in the road is almost always the same: operate under a Foreign Business License (FBL) or qualify for Board of Investment (BOI) promotion and avoid the FBL route altogether. Both paths are legal and used by successful operators. The better choice depends on control (foreign ownership), incentives, timelines, documentation, and compliance obligations. Below is a clear, founder-friendly comparison, followed by a decision framework and document checklists we use with clients.

Quick Refresher: Why This Matters

Thailand’s Foreign Business Act B.E. 2542 (1999) (“FBA”) restricts certain service businesses to Thai nationals unless a foreign company receives permission (FBL) or qualifies for a statutory exemption (most commonly via BOI promotion). Hotel operation and certain hospitality services are among the activities historically treated as restricted unless specifically permitted.

In parallel, Thailand’s BOI offers promotion to eligible activities, with potential 100% foreign ownership, duty and tax incentives, and facilitated permits, provided the project meets policy objectives and conditions formalized in the BOI Investment Promotion Guide 2025.

A view of Thailand's vibrant cityscape where hospitality projects thrive.

FBL vs BOI — A Side-by-Side for Hospitality Founders

Who Grants It?

• FBL: Ministry of Commerce (Department of Business Development) under the FBA.

• BOI Promotion: Board of Investment under the Investment Promotion Act.

  
  

Foreign Ownership

• FBL: Possible to operate as a foreign company, but equity/control constraints and conditions may apply depending on the activity and license terms.

• BOI: Often allows up to 100% foreign ownership for eligible activities; no separate FBL needed for promoted scope.

  
  

What It Covers

• FBL: Permission to engage in an FBA-restricted business (e.g., hotel operations/services) for the licensed scope.

• BOI: A promotion certificate covering the eligible activity list (e.g., specific hospitality-adjacent, tourism, or digital/service components), plus incentives.

  
  

Tax & Duty Incentives

• FBL: None by default. Normal tax regime applies.

• BOI: Potential CIT holiday, import duty reductions/exemptions, plus additional measures for competitiveness (subject to criteria and sector lists).

  
  

Permits & Facilitation

• FBL: Standard processes for visas/work permits; no special fast-track.

• BOI: Facilitated permits (e.g., visas/work permits via BOI services), often faster inter-agency coordination.

  
  

Compliance Burden

• FBL: Ongoing reporting to DBD/Commerce as licensed entity; must maintain license conditions.

• BOI: Ongoing BOI compliance (milestones, capital, local workforce development, technology/knowledge transfer), with periodic reporting and audits.

  
  

When It Fits

• FBL: You don’t meet BOI criteria, or your activity is clearly FBL-eligible, and you prefer a straightforward permit.

• BOI: You meet BOI’s sector/impact criteria and want ownership flexibility, incentives, and facilitated immigration.

  
  

An inviting hotel lobby designed for hospitality and comfort.

A Founder’s Decision Framework (5 Questions)

1. What Exactly Will You Operate?

Break down your business into operational units: accommodation, F&B, spa/wellness, events, marina/golf, digital services, procurement/import for fit-out, etc. Some components may be BOI-friendly even if hotel operation per se is restricted.

2. Do You Qualify for BOI on Any Component?

Cross-check with 2025 BOI priorities (digital, green/efficiency upgrades, regional development, workforce development). If yes, model the tax/duty savings vs. compliance obligations over 5-8 years.

3. How Critical Is 100% Foreign Ownership?

If you must retain full control without local equity, a BOI path (or combined structure) is usually cleaner than an FBL-only route.

4. What Is Your Time-to-Opening?

FBL applications can be linear if your documentation is strong; BOI involves a promotion application, conditions, and milestone tracking—worth it when incentives are material and timelines are managed professionally.

5. Where Are You Investing?

Projects in targeted provinces or corridors can benefit from area-based BOI measures; this can tilt the decision toward BOI if you meet the thresholds.

Document Checklists (What Reviewers Actually Look For)

For FBL (Ministry of Commerce / DBD under FBA)

1. Corporate docs: MoA, list of shareholders, directors’ passports/IDs, registered address.

2. Detailed business description: Exact services, locations, capacity (keys), revenue model.

3. Economic contribution: Employment plan, training/knowledge transfer, local procurement.

4. Financial model: Capital, 3-5 year P&L, cash flow, investment schedule.

5. Internal controls & compliance: Governance, accounting, and reporting processes.

   
   

For BOI Promotion

1. Corporate pack: Plus promotion application aligned to the eligible activity list.

2. Project rationale & impact: Technology adoption, sustainability, workforce development.

3. Capex schedule and local content plan: Where applicable.

4. Implementation milestones: Site control, construction program, commissioning, go-live.

5. HR plan: Thai staff development, training pipeline, and knowledge transfer structures.

   
   

Timelines & Sequencing (De-risked Path)

1. Company setup: (DBD Biz Regist) with objectives that match your target licensing scope.

2. Decision memo: FBL vs. BOI vs. hybrid; confirm if any activities are unrestricted.

3. File BOI: If eligible, secure promotion certificate and conditions; or prepare the FBL dossier with robust economic-benefit arguments.

4. In parallel: Plan VAT profile (mandatory at ≥ THB 1.8M turnover; consider voluntary registration during fit-out for input credits).

5. After entity/licensing: Proceed to land, design, permitting (building control, fire/life safety) → construction → Hotel Act license (we cover these on Wed-Thu posts).

   
   

Workers engaged in construction for a hospitality project.

Common Mistakes We See (and Fix)

1. Treating “hotel license” as part of incorporation. It isn’t. Even BOI projects need separate building and hotel licensing tracks.

2. Under-documenting local contribution in FBL files (jobs, training, local spend). The FBL committee weighs this heavily.

3. Pursuing BOI for the wrong activity list (or with vague tech/HR plans). Align to 2025 priority themes and back claims with budgeted programs.

4. Leaving VAT and banking to the end, which delays supplier onboarding and import scheduling during fit-out.

   
   

How AD ASIA Structures Your Choice (What We Deliver in 2-3 Weeks)

1. Ownership & licensing decision memo: (FBL vs BOI vs hybrid), with quantified incentives and obligations over 5-8 years.

2. Application-ready dossiers: Promotion application (if BOI) or FBL file with economic-benefit narrative, org charts, and HR development plan.

3. Sequenced roadmap: Incorporation → tax/VAT → visas & work permits (LTR where applicable) → permits → construction → hotel license, with weekly KPIs. (We coordinate with TIESC for LTR-eligible executives and specialists.)

   
   

Final Thoughts

Choose FBL if your operation is squarely in FBA-restricted “hotel operation” and you don’t meet BOI thresholds or you prefer a permit without incentives. Choose BOI if you can align with the 2025 promotion lists (ownership flexibility, tax/duty savings, and better inter-agency facilitation). The governance is heavier, but the economics and control often justify it.

CTA — Book a 45-Minute FBL vs BOI Strategy Call

We’ll map your scope against FBA/BOI criteria, produce a decision memo, and hand you a document checklist and timeline tailored to your project. (Delivered by AD ASIA Consulting — project development, design & fit-outs, procurement, legal & regulatory support in Thailand/ASEAN.)