Licence-Holding Models in Thailand: Distributor, Independent Holder or Subsidiary

Q: What licence-holding models exist in Thailand, and which one should a manufacturer choose?

1. Key takeaways

There are three licence-holding models in Thailand: distributor-held registration, an independent licence holder (ILH / LAR), and setting up your own Thai subsidiary. They differ sharply in control, upfront cost and the cost of changing channels later, and the wrong early choice is expensive to unwind. The registration certificate does not transfer automatically when a commercial relationship ends, so whoever holds the certificate effectively controls the market access of the product. For most manufacturers the deciding question is not the initial price but what it will cost to switch distributors a few years down the road, and on that measure the independent licence holder model consistently comes out ahead.

• Three models only. Distributor-held, independent licence holder (ILH / LAR), or a self-established Thai subsidiary; each trades off control, upfront cost and channel flexibility differently.
• Distributor-held means weak control. The certificate sits in the counterpartys name, and switching channels requires a Transfer that the counterpart must consent to.
• ILH decouples holding from distribution. Registration and import sit with one independent entity that then supplies downstream channels, so distributors can be changed or added without touching the certificate.
• A Thai subsidiary offers maximum control at maximum cost. It requires incorporation, premises that pass a Thai FDA onsite inspection, and long-term operation.
• Registration is per importing entity. Because only the licence-holding entity may import and sell, every additional importing distributor must independently register the product, multiplying initial registration costs.
• No foreign shareholding cap on device holding and import itself. Company incorporation, however, must be assessed under foreign investment rules, with common paths including BOI promotion, the Foreign Business License (FBL), and 100% foreign ownership under specific conditions.

2. Legal basis

The framework underlying all three models is the Medical Device Act B.E. 2551 (2008) and the Thai FDA official guidance, whose FAQ confirms in its second question that foreign entities must appoint a Thai local authorised representative. The For Commercial Purpose guidance at Step 3 sets out the establishment licence, including the onsite inspection and the five-year validity period. The Thai FDA transfer notice dated 2024-09-19 makes clear that a certificate transfer requires a letter of consent from the original licence holder, which is precisely why distributor-held structures carry the lock-in risk described below. Foreign investment paths follow Thai foreign investment access regulations, namely the Foreign Business License (FBL) and Board of Investment (BOI) promotion, whose specific application must be assessed case by case. The comparative starting position of the three models is summarised below.

3. Expert insights

The core problem with distributor-held registration is that the registration certificate does not transfer automatically with the commercial cooperation. The certificate sits in the distributor’s name, so the product registration number is locked to that distributor. Once a commercial dispute or a strategic adjustment occurs, if the original licence holder refuses to sign the letter of consent, the manufacturer is often left with only one route: resubmit a brand-new registration application, paying the fees again, waiting again for months or even a year, and potentially facing a stricter review against the current, updated standards. On top of this sits the technology dossier leak risk, because the full CSDT dossier, containing design, process, verification data and risk analysis, is in the distributor’s hands and is hard to recover once the relationship ends. The ILH model answers exactly this weakness by decoupling holding from distribution: the ILH registers and imports as the master licence holder and supplies downstream distribution channels. The manufacturer needs to register only once, can change or run multiple distributors in parallel at any time, avoids the distributor lock-in effect on price and service, and protects intellectual property and commercial channels. The economic value is direct: in Thailand every importing entity must independently register the product, because only the licence-holding entity may import and sell, so the more distributors there are, the higher the initial registration cost becomes. With the ILH model the manufacturer registers once and that multiplication never happens.

4. Practical recommendations

• Ask one question when choosing a model. If in three years you want to change distributors, what will it cost? Distributor-held means months plus counterpart cooperation plus possible re-registration; an independent licence holder means simply changing the supply relationship.
• Default to the ILH model. For most manufacturers the answer is the independent licence holder, because it lowers the cost of changing channels by an order of magnitude.
• Judge the subsidiary question by SKU count and market commitment. A rough dividing line: many SKUs and a plan to commit to the market long term makes a subsidiary worth setting up; a testing phase or very few SKUs means start with an independent licence holder.
• Price the subsidiary honestly. A self-established company must bear incorporation, premises that must pass the Thai FDA onsite inspection, personnel, tax and annual compliance costs; the benefit in exchange is complete autonomy.
• Assess foreign investment access before incorporation. Common paths include BOI promotion, the Foreign Business License (FBL), and 100% foreign ownership under specific conditions; retail and certain other sectors carry their own access restrictions, and specific application must be evaluated case by case.
• Remember the cap question. Device licence holding and importation itself carries no foreign shareholding cap, but the company incorporation step must still be assessed under foreign investment regulations.

5. Verification checklist

• □ Thai FDA official FAQ, question 2 (foreign entities must appoint a Thai local authorised representative)
• □ Thai FDA transfer notice (2024-09-19) requiring the original licence holder’s letter of consent
• □ Thai FDA website For Commercial Purpose Step 3 establishment licence (onsite inspection, five-year validity period)
• □ Medical Device Act B.E. 2551 (2008)
• □ Thai foreign investment access regulations (FBL / BOI, specific application to be assessed case by case)

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support across Southeast Asia, including Thailand. Our team prepares dossiers to ASEAN CSDT structure, manages submissions and deficiency responses with the Thai FDA, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com