Thailand continues to be one of the most attractive destinations in Southeast Asia for educational investment, particularly for international schools, bilingual schools, specialized academies, and vocational institutions. With the increasing demand for high-quality education, together with Thailand’s growing expatriate and international business communities, many foreign education groups are actively exploring opportunities to establish educational institutions in Thailand.

However, the establishment and operation of a private school in Thailand is a highly regulated activity under Thai law. In practice, foreign investors must carefully structure their investment, shareholder arrangements, and management framework to ensure compliance with the Ministry of Education’s requirements (so-called “MOE”) while still maintaining practical operational control and protecting their commercial interests.

This article highlights several key legal and practical considerations that foreign investors should be aware of when establishing a private school in Thailand.

Why Legal Structuring Is Important

One of the most important considerations for foreign investors or school operators is that the operation of a private school is generally regarded as a restricted business activity under Thai law.

The Private School Act B.E. 2550 (2007) (and its amendments) clearly stipulates that a juristic person that is eligible to apply for a license to establish a private school shall:

a)   be a limited company registered under Thai law;

b)   have a majority number of shares held by Thai shareholders;

c)   have not less than half of Thai shareholders; and

d)   have a Thai authorized director(s) who, among other requirements, is 20 years of age or above, possesses at least a Bachelor’s degree, and has not been imprisoned by a final court judgment.

As a result, foreign investors are typically unable to directly own or control the private school operator in the same manner as ordinary commercial businesses.

Common Structuring Approaches for Foreign Investors

Given the above foreign restrictions, proper legal structuring is critically important. In practice, foreign investors commonly consider various structures to protect their commercial interests while remaining in compliance with Thai regulations. Such structures may involve:

• establishing a joint venture company (so-called “JVCo”) having Thai majority-owned structure;
• implementing reserved matters and management control mechanisms;
• appointing foreign representatives in academic and operational roles;
• separating educational operations from intellectual property ownership;
• licensing curriculum, trademarks, and educational systems to the JVCo; and
• implementing governance mechanisms relating to finance, approval authority, and operational standards.

However, these arrangements must be carefully prepared to avoid any issues relating to nominee shareholding arrangements, which are prohibited under Thai law.

Licensing Process

The establishment of a private school requires approval and licensing from the Office of the Private Education Commission – Ministry of Education (“OPEC”).

The licensing process generally involves the submission of:

1. Corporate information and documents of the applicant
2. Curriculum (i.e. Thai, bilingual, international, or specialized educational program)
3. School Charter (i.e. educational objectives and philosophy, financial evidence, management structure, uniform, etc.)
4. Building permits and safety compliance documentation
5. Qualifications of the authorized director(s)

The estimated timeline for applying the school license would be approximately 4 – 6 months.

Employment and Immigration Matters

Under the laws, at least 30 days prior to the school operation commencement date, the school must:

a)   hire teachers and educational personnel in a number proportionate to the student population, depending on the type of school, for example, an international school, as follows:

• Nursery: 1 teacher and 1 caretaker per 20 students
• Kindergarten: 1 teacher and 1 caretaker per 20 students
• Primary School: 1 teacher per 25 students
• Middle and High School: 1 teacher per 30 students

b)   appoint the management positions (i.e. the school executive board, consisting of school license holder’s representative, school director, school manager, and teacher & parent representatives).

Private schools employing foreign teachers and administrators must also comply with Thai labor and immigration regulations. This typically includes:

• work permit applications;
• visa arrangements;
• teacher licensing requirements;
• employment agreements;
• personal data protection compliance; and
• social security and tax obligations.

Nevertheless, please note that a school director who looks after and takes responsibility for the administration and management of the school shall be of Thai nationality, have the required qualifications and not be subject to the prohibitions set forth for an educational institute administrator, and be able to perform his/her duties full time for such school.

Separate Juristic Person

Once the school license has been obtained, such school shall become a juristic person from the date of receiving such license, and the license holder (i.e. applicant) shall become a representative of such school.

After the school becomes a juristic person, the license holder shall proceed to:

a)   transfer the ownership, right of possession over the land and immovable properties which are component parts of the land, right of superficies, usufruct or lease right, free from any encumbrance as indicated in the application for the license; and

b)   transfer money and other properties being the capital other than the land to the school.

The school executive board may appropriate remuneration derived from the operation of the school to the license holder as it deems appropriate.

Final Thought

The establishment of a private school in Thailand involves a combination of corporate, regulatory, educational, employment, and operational considerations. For foreign investors, one of the most critical aspects is designing a compliant shareholding and management structure that satisfies the Ministry of Education’s requirements while adequately protecting the investor’s commercial interests.

A properly structured arrangement may help foreign investors:

• mitigate regulatory risks;
• avoid nominee-related concerns;
• maintain operational oversight;
• protect intellectual property and educational systems; and
• facilitate long-term business sustainability.

For further information, please contact Mr. Bunnasomboon (Aaron) Chaiparinya, Head of Corporate Department, email: [email protected]