Thailand has emerged as one of Asia’s most attractive destinations for luxury yacht charters. From the turquoise waters of Phuket and Krabi to the serene islands of the Gulf of Thailand, the demand for private and commercial yacht charters continues to increase. Our law firm in Thailand H&P have advised in multiple transactions regarding yachts and vessels and to some business operators in south of Thailand.
Operating a yacht charter business in Thailand, however, involves more than purchasing or importing a vessel. Investors must understand and comply with several layers of Thai law, including corporate, maritime, and tourism regulations. The following overview provides key legal insights for those considering entry into this growing market.
- Establishing a Thai Company
A yacht charter business in Thailand must be established as a Thai limited company in accordance with the Civil and Commercial Code and the Foreign Business Act B.E. 2542 (1999).
However, the shareholding and director composition requirements differ depending on whether the company owns the vessel itself or leases the vessel from another owner for charter operations.
Case 1: Company Owns the Vessel (Thai Vessel Ownership Requirements)
If the company intends to own the vessel under its own name, it must comply with the ownership conditions prescribed under the Thai Vessel Act B.E. 2481 (1938)
Under this law, a company that owns a Thai-registered vessel must:
- Be a limited company;
- Have not less than seventy percent (70%) of its registered capital held by Thai nationals (persons who are not foreigners under the Foreign Business Act);
- Have at least half of its directors being Thai nationals; and
- Have Articles of Association that do not allow the issuance of bearer shares (the company must issue only registered shares).
These requirements are mandatory for registration of a Thai-flagged vessel and ensure that control and ownership of commercial vessels remain under Thai nationals in accordance with the Thai Vessel Act B.E. 2481.
Case 2: Company Leases a Vessel from the Owner (Chartered Vessel Model)
If the company does not own the vessel, but instead leases or charters the yacht from another individual or legal entity to operate a yacht charter business, it is not required to comply with the stricter ownership criteria under the Thai Vessel Act B.E. 2481.
In this scenario:
- The company may be registered with more than half (over 50%) of its shares held by Thai individuals or entities, rather than meeting the 70% threshold;
- The vessel owner (individual or company) must already be properly registered and licensed to lease the vessel for commercial purposes; and
- The operating company can then obtain the necessary business or tourism licenses to conduct yacht charter operations legally in Thailand.
This model offers greater flexibility for foreign investors who wish to operate charter services without directly owning a vessel, while still ensuring compliance with Thai corporate, maritime, and tourism laws.
- Licensing and Scope of Business
The type of license required depends on the scope of the company’s operations.
For vessel charter only: If the company provides only yacht rental or charter services without arranging tour programs, accommodation, or package tours, a Tourism Business License is not required.
For charter with tourism operations: If the company organizes tour programs or sells travel packages, it must obtain a Tourism Business License from the Department of Tourism.
Vessel tonnage consideration:
The vessel’s gross tonnage (GT) determines whether an additional maritime license is required.
• For vessels exceeding sixty gross tons (60 GT), a maritime license must be obtained under the Navigation in Thai Waters Act.
• All vessels must be properly registered and certified by the Marine Department before they can be operated commercially.
- Vessel Registration and Flag Requirements
The Marine Department requires that any vessel used for commercial purposes, including yacht charter, be registered under a Thai company’s name.
Important Regulatory Points:
• A foreign-flagged vessel (for example, one registered under the Langkawi flag) may only be used for private and non-commercial activities such as leisure or sport.
• A foreign-flagged vessel cannot legally operate for hire or business within Thai territorial waters.
• To operate commercially, the vessel should be imported into Thailand, its foreign registration cancelled, and re-registered under the Thai flag.
Once the vessel is registered under the Thai flag, the company may legally conduct yacht charter operations and related commercial activities throughout Thailand.
- Crew and Compliance Obligations
Under Thai maritime and labor regulations, specific operational requirements must be followed to ensure compliance.
Key Obligations:
• The captain and crew members must be Thai nationals. Foreign nationals are not permitted to hold these positions on Thai-registered commercial vessels.
• The vessel must carry valid insurance, comply with safety survey standards, and be equipped according to Marine Department requirements.
• Voyage plans, passenger manifests, and operational reports must be submitted to the relevant authorities in accordance with the Marine Department’s regulations.
- Why Legal Guidance Is Essential
Thailand’s yacht charter industry offers significant potential for investors; however, the regulatory process is detailed and highly technical. It involves coordination with multiple authorities and strict adherence to legal requirements regarding vessel importation, licensing, taxation, and labor compliance.
Professional legal support is strongly recommended to ensure that:
• The company structure meets Thai ownership and directorship requirements.
• The vessel is properly imported, registered, and licensed for commercial use.
• Taxation, VAT, and accounting obligations are handled in accordance with Thai law.
• Crew employment and compliance standards meet both maritime and labor regulations.
At Herrera & Partners, our corporate team regularly assists Thai and foreign clients with:
• Setting up yacht charter and marine tourism companies;
• Registering and licensing vessels with the Marine Department;
• Preparing charter agreements and compliance documentation; and
• Coordinating with Thai authorities on vessel importation and crew registration.
- Conclusion
Thailand’s yacht charter market continues to expand in response to rising demand for luxury marine tourism and improved infrastructure in coastal destinations. With proper structuring, legal compliance, and professional guidance, investors can take advantage of Thailand’s potential while operating in full accordance with the law.
For investors considering establishing a yacht charter business or bringing a vessel to Thailand for commercial use, obtaining professional legal advice at the planning stage is crucial. A well-prepared and legally compliant structure ensures long-term success and minimizes regulatory risk.
If you are considering expanding your business into Thailand or planning to establish a yacht charter operation, please contact our corporate lawyers in Bangkok at [email protected]
