Short Answer
Calling two companies “group companies” is not enough.
For a company that is a foreigner under Thailand’s Foreign Business Act, lending money is generally treated as a service business for which foreign-business permission may be required.
A current exemption exists for certain domestic lending to an affiliated company where the lender and borrower have one of the prescribed relationships under Ministerial Regulation No. 4 B.E. 2562 (2019).
The practical issue is therefore evidence:
Does the relationship actually meet the prescribed affiliation test, and did that relationship exist when the loan route was relied on?
Why This Matters
Corporate groups often describe entities as affiliates based on common branding, management or an ultimate owner.
Regulators do not necessarily use that commercial description.
If a foreign-owned Thai company advances funds on the assumption that the borrower is an exempt affiliate, but the required legal relationship is missing or cannot be documented, the regulatory basis for the loan can change.
The source matter arose from precisely that question. Counsel requested records for both lender and borrower and was asked whether borrower-side documents alone were sufficient. The source specifically identified corporate affidavits, constitutional documents, shareholder records and certificates as relevant evidence; no authority acceptance was found. fileciteturn12file3L122-L125
Typical Scenario
A foreign-owned Thai company has surplus cash.
Management wants to lend it to another company in the wider corporate group.
Both businesses report to the same regional management and are described internally as affiliates.
Finance asks:
“Because this is an intra-group loan, do we avoid the Foreign Business Licence issue?”
Only if the regulatory relationship test is actually satisfied.
Practical Analysis
01First determine whether the lender is a foreigner under the Foreign Business Act.
The intra-group exemption matters only after the lender’s own status is understood.
A Thai company can still be treated as a foreigner under the Act depending on its ownership.
02Separate domestic from overseas lending.
Department of Business Development guidance distinguishes lending to an affiliated company in Thailand from lending to an overseas affiliate.
The 2019 Ministerial Regulation creates an exemption for specified domestic intra-group services where the prescribed relationship exists.
Do not extend that exemption automatically to a different cross-border fact pattern.
03Prove affiliation from both sides.
A borrower’s company affidavit alone may show its own registered facts but not the relationship with the lender.
The evidence file may need:
- current company affidavits or certificates;
- Articles of Association where relevant;
- shareholder lists and shareholder registers;
- ownership-chain evidence;
- documents establishing the prescribed parent/subsidiary or group relationship; and
- dates showing when that relationship existed.
04Test the relationship on the relevant date.
If the companies become affiliated after money has already been advanced, later affiliation should not be assumed to retroactively transform the historical loan into an exempt intra-group transaction.
Prospective compliance and historical exposure are different questions.
05Keep the loan documents consistent with the regulatory position.
The lender, borrower, amount, purpose, interest, repayment terms and date should match the entity relationship on which the exemption is being relied.
Avoid drafting a loan agreement that assumes affiliation without attaching or retaining the evidence.
06Foreign-business analysis is not the whole lending analysis.
An exemption from Foreign Business Act permission does not automatically answer tax, withholding, transfer-pricing, foreign-exchange, financial-business licensing or corporate-authority issues.
Those should be assessed separately where relevant.
What We Usually Look At
We review the lender’s foreigner status, borrower location, ownership chain, shareholder records for both companies, timing of affiliation, loan terms, business purpose, board authority and any tax, foreign-exchange or regulated-credit issues.
Common Traps
Typical mistakes are relying on a common ultimate owner without testing the prescribed relationship, keeping evidence only for the borrower, using current ownership to justify an older loan and treating the Foreign Business Act exemption as a complete regulatory clearance.
Practical Next Step
Before transferring funds, prepare one affiliation pack:
lender status → borrower status → prescribed relationship → ownership evidence → effective date → loan date → regulatory route
If the relationship cannot be proved from contemporaneous corporate records, resolve that issue before calling the transaction an exempt intra-group loan.
Legal Sources
- Foreign Business Act B.E. 2542 (1999), including List Three (21) on service businesses.
- Ministerial Regulation prescribing service businesses that do not require foreign-business permission (No. 4) B.E. 2562 (2019).
- Department of Business Development, Foreign Business Administration Division, Summary of Legal Rulings for October 2025, item 7, on lending by a foreign-owned Thai company to affiliated companies in Thailand and overseas.
General legal information only. Please seek advice on your specific facts. Laws and regulatory practice may change.