Thailand’s National Broadcasting and Telecommunications Commission (NBTC) is reportedly considering reclassifying data center (DC) operations from Type 1 to Type 3 under the Telecommunications Business Act. If implemented, the Foreign Business Act’s Thai-majority ownership requirement would apply, meaning foreign-majority ownership of DC businesses would no longer be permitted. The target is implementation by the end of 2026, but this remains under consideration and is not a finalized regulation.
This development should be read alongside our earlier article on BOI’s new ERC power confirmation requirement for data centers. While BOI regulates the investment procedure, the NBTC move addresses a more fundamental question: can foreign investors own DC operations at all?
Thailand’s Telecom License Types — Why DCs Are Currently Type 1
The Type Classification Under the Telecommunications Business Act
The Telecommunications Business Act B.E. 2544 (2001) classifies telecom businesses into three types:
| Type | Description | Foreign Ownership |
|---|---|---|
| Type 1 | Telecom services without own network infrastructure | Foreign-majority ownership permitted |
| Type 2 | Services with limited network infrastructure (e.g., ISPs) | Intermediate regulation |
| Type 3 | Large-scale network operators (core telecom infrastructure) | Thai-majority (over 50%) ownership required |
The foreign ownership restriction on Type 3 operates through the Foreign Business Act (FBA) B.E. 2542 (1999), which lists telecommunications among its restricted business categories. For more on the FBA’s restricted business list, see our FBA reform article.
Why DCs Are Currently Type 1
Data center operations are currently classified as Type 1. This is because DCs have been positioned as providers of physical infrastructure and facilities (server rooms, power, cooling) rather than providers of telecommunications services per se. Under Type 1, foreign-majority ownership is permitted, which has been the legal foundation for global cloud companies (AWS, Google, Microsoft) and Japanese companies operating DCs through wholly owned subsidiaries.
Comparison with Japan
Japan’s Telecommunications Business Act was amended in 2004 to abolish the business-category system, simplifying it into registered and notified telecommunications businesses. Foreign ownership restrictions are handled through separate legislation (such as the NTT Act) rather than a comprehensive type-based classification like Thailand’s. For more on Thailand’s digital and telecom legal framework, see our Digital Law series.
NBTC’s Reclassification Plan — What, Why, and When
What Has Been Reported
According to the Bangkok Post (March 25, 2026), NBTC Acting Secretary-General Trairat Viriyasirikul announced plans to reclassify data center licenses from Type 1 to Type 3.
The stated reasons include:
- National data management and cyber sovereignty — strengthening oversight over customer data (personal and corporate) held in data centers
- Prevention of illegal use — as reported by the Nation Thailand, addressing risks of DCs being used as infrastructure for call center fraud, money laundering, and other illicit activities
- Infrastructure management — managing the long-term impact of DC proliferation on power grids and energy policy
The DC Market’s Rapid Growth
According to the Nation Thailand, Thailand’s DC market is projected to grow from approximately 470 billion baht (2025) to 2.02 trillion baht (2031), representing a compound annual growth rate of 27.7%. BOI approved seven DC investment projects worth over 96 billion baht in 2025, with 36 additional applications totaling 728 billion baht expected. The rapid growth of this market provides context for the regulator’s desire to strengthen its oversight framework.
Additional Implications
According to the Developing Telecoms, a Type 3 reclassification would also bring:
- Higher annual regulatory fees — Type 3 operators are subject to a higher fee structure than Type 1
- Zoning regulations — restrictions on DC locations are under discussion
- Implementation target — by the end of 2026
No official announcement from the NBTC has been confirmed on its website as of this article’s publication date. The information in this article is based on the above press reports.
What Type 3 Means for Foreign DC Operators
The Core Impact: Thai-Majority Ownership Requirement
The most significant consequence of a Type 3 reclassification would be the application of the FBA’s Thai-majority ownership requirement:
- Wholly foreign-owned DC operations would no longer be permitted — shareholding structures with foreign ownership exceeding 50% would not be allowed
- Existing operators may need to restructure — foreign-majority DC operators currently licensed as Type 1 could be required to bring in Thai shareholders to achieve majority Thai ownership
- Joint venture partners may be needed — a shift from 100% subsidiary to Thai-majority JV structures
For global cloud companies (AWS, Google, Microsoft), this could fundamentally affect the corporate structure of their Thailand DC operations. For Japanese companies operating DCs through wholly owned Thai subsidiaries, it could necessitate a transition to joint venture arrangements.
However, it bears repeating: this is a policy direction under consideration, not a finalized regulation or legislative amendment. A public consultation process is also anticipated.
Two-Tier Regulatory Structure — Investment Procedure vs. Ownership
Japanese DC operators in Thailand face a two-tier regulatory structure:
| Layer | Regulator | Regulation | Impact |
|---|---|---|---|
| Investment procedure | BOI | ERC power confirmation requirement | DC investment application process becomes more complex |
| Ownership structure | NBTC | Type 1 → Type 3 reclassification (under consideration) | Whether foreign investors can own DC operations at all |
The BOI’s ERC power confirmation requirement is a procedural change affecting BOI investment applications — additional documentation is needed, but the ownership structure itself is not affected.
The NBTC move, by contrast, goes to the fundamental question of whether foreign investors can hold majority ownership in DC businesses. Even if all BOI procedural requirements are met, a strengthened NBTC foreign ownership restriction could undermine the premise of foreign-majority DC operations.
”Attract and Regulate” — Reading Thailand’s Industrial Policy
Thailand’s DC-related policies may appear contradictory at first glance:
- BOI — actively offering tax incentives and investment promotion for DC operators (attract)
- NBTC — considering tighter foreign ownership restrictions for DC businesses (regulate)
However, this is not necessarily a contradiction. It can be read as a coherent industrial policy: “Foreign investment is welcome, but control over critical infrastructure stays with Thai interests.”
This pattern echoes the nominee crackdown × FBA 10-sector liberalization dynamic: “legitimate foreign investment is welcomed — but who holds control must be transparent.” For more on Thailand’s foreign investment framework, see our market entry series.
That said, if the NBTC proposal is implemented as reported, it could face criticism for effectively conflicting with BOI’s DC attraction efforts — especially from global operators who made large-scale investment decisions based on the existing Type 1 framework.
Actions for Japanese Companies at This Stage
While this remains under consideration, the following preparatory steps are advisable:
-
Confirm your current license type — if you are operating under a Type 1 license, you would be directly affected by a reclassification
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Simulate a Thai-majority ownership scenario — if your DC operation is 100% foreign-owned or foreign-majority, begin evaluating potential Thai JV partners and shareholder agreement structures
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Assess combined impact with BOI requirements — review your investment plan holistically, considering both the ERC power confirmation requirement and the potential NBTC ownership restriction
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Establish a monitoring framework — set up regular checks on the NBTC website (nbtc.go.th) for official announcements and the launch of any public consultation process
Summary
- The NBTC is considering reclassifying DC licenses from Type 1 to Type 3 (reported March 2026)
- If implemented, foreign-majority DC ownership would no longer be permitted — a shift from 100% subsidiary models may be required
- This creates a two-tier regulatory structure: BOI investment procedures and NBTC ownership rules
- Thailand’s “attract and regulate” approach is consistent with its broader foreign investment policy — but may face criticism for changing the rules after major investments were committed
- This is currently under consideration and is not a finalized regulation. Watch for official NBTC announcements and public consultation proceedings
For inquiries on data center investment, telecom licensing, and foreign ownership regulations in Thailand, we provide advice covering both Japanese and Thai law — from monitoring NBTC regulatory developments to designing shareholding structures. We work in collaboration with JTJB International Lawyers’ Thai-qualified attorneys. Please feel free to contact us.
This article is for general informational purposes about Thailand’s legal system and does not constitute legal advice under Thai law. The NBTC’s Type reclassification is under consideration as of this article’s publication date and is not a finalized regulation. For specific matters, please consult a Thai-qualified legal professional. Our firm works in collaboration with JTJB International Lawyers’ Thai-qualified attorneys.