Foreign Investors Anxious Of Revision To Investment Rules

[k1w1]

Protectionism is not neccessarily a bad thing.

But it certainly seem as though the current leaders have decided they want to go against the trend that most of the rest of Asia is following.

If it's simply to remove foreign influence from getting control of the key assets it makes sense. If it's really an ulterior motive to let Chinese infiltrators get more control then it stands to reason that the Chinese system will be applied eventually undoing all of the protectionist policies that are being put into place now.

Looks to me like the King and his peeps are just trying to protect their own and save Thailand from dilution by foreign investors ready to ransack the economy at the first chance. Also makes it harder for people like Taxsin to sell key national assets...

[lukamar]

All that needs to happen is have one major player, unless they exempt them, like Tesco, Toyota or any worldwide brand, pull the plug and you will hear the sucking sound half way around the world. They probably don't care a lot if little guys like us, leave maybe they will help us pack in the future. But one big manufacturer leaving will have a huge effect on the economy and will get other big companies thinking about their place in the sun, especially with other countries like Malaysia and Vietnam offering incentives to manufacturers moving there. We will know if self sufficiency is working in a few years... LOL

[Finansjohan]

It is in Thailand's best interests, now, to de-couple itself from use of foreign capital, and to 'encourage' foreign capitalists to take their speculations elsewhere.

Well, is starting a company in Thailand and training people 'speculation' in your view?

There is a lot more to a well functioning economy than controlling fuel. If there is something we know, countries that isolate themselves from the outside world do very poorly. Take a trip to North Korea and have look. By contrast, the 'Asian miracle' came from trading with foreigners. Is what we are seing here the beginning of the 'Thai disaster'? I certainly hope not, but there is a downward spiral at the moment, no doubt.

By the way where did fuel come into this?

[besth]

I think we should wait to see what, if anything, happens, but the Chambers of Commerce worry about the subject is not a good sign.

It seems that every new economic policy the government issues, or tests to say "oops, sorry" when it backfires badly, carries the message "Foreigners, we don't need and don't want your money here". They are starting to sound quite convincing too.

Why?

[farang prince]

ahh, so how do you think it would effect Thailand as a country?

Well, let's see, in the past six months we have had a government-ordered moratorium on construction of new foreign-owned stores, had a coup, had a series of bombings in Bangkok, have had rumors of another coup and now the probability of a new law regarding actual ownership of businesses in Thailand. Now if you are a foreign investor and you STILL want to invest millions on businesses here in Thailand, then I have some lovely desert land in the southwest United States that you might be interested in also....In other words, only fools would venture into such an unstable environment at the present time.

[d44]

All that needs to happen is have one major player, unless they exempt them, like Tesco, Toyota or any worldwide brand, pull the plug and you will hear the sucking sound half way around the world. They probably don't care a lot if little guys like us, leave maybe they will help us pack in the future. But one big manufacturer leaving will have a huge effect on the economy and will get other big companies thinking about their place in the sun, especially with other countries like Malaysia and Vietnam offering incentives to manufacturers moving there. We will know if self sufficiency is working in a few years... LOL

Agree, but understand that only a few of the 14,000 are 'major players'. Don't be surprised if the majority of foreigner-employed thais or employed by the little guys.

[bkkandrew]

It is in Thailand's best interests, now, to de-couple itself from use of foreign capital, and to 'encourage' foreign capitalists to take their speculations elsewhere.

Well, is starting a company in Thailand and training people 'speculation' in your view?

There is a lot more to a well functioning economy than controlling fuel. If there is something we know, countries that isolate themselves from the outside world do very poorly. Take a trip to North Korea and have look. By contrast, the 'Asian miracle' came from trading with foreigners. Is what we are seing here the beginning of the 'Thai disaster'? I certainly hope not, but there is a downward spiral at the moment, no doubt.

By the way where did fuel come into this?

Oh don't worry - Martin can manage to bring the irrelivant into almost any topic..

[lukamar]

Agree, but understand that only a few of the 14,000 are 'major players'. Don't be surprised if the majority of foreigner-employed thais or employed by the little guys.

Agreed... I really don't think that the present government or the military understands the trickle down effect. Surprising because the first thing anyone learns in the military is that "Sh*t rolls downhill". Most governments, not just Thailand, underestimate the overall effect of small businesses on a country and seem to concentrate on the ones making millions in profits. If you employ 4 Thais, even if they are your relatives and even if they don't do much, you are putting money into the economy that goes outward in a lot of directions. Cut off the head and the body dies, same in business and if the government keeps stabbing foreign business and investment, those businesses will find a way to stop the bleeding probably by moving elsewhere.

[Paul MBMG]

The little that I know about this is that this is the latest in a series of responses to the problem of people abusing both the spirit and the substance of the law regarding foreign ownership. This is at all levels - the former premier's sale to Temasek shone a very bright spotlight on a very questionable area. Many farangs have properly established foreign controlled businesses here within the spirit and the letter of Thai law. Unfortunately there has been an increasing amount of foreign capital inflow into Thailand that hasn't respected local rules. Regulations have been bent, twisted and downright ignored by rather slipshod investors in many cases acting on unprofessional advice. Therefore the problems stem from both the biggest and the smallest companies and from Thai and farang vested interests alike.

That said, it should be remembered that this is only a proposal and that posts talking of land grabs are wide of the mark. The propoals in the draft are for any businesses which suddenly become illegal overnight purely as a result of the change of the law to have 3 options:

1) to be given a remedy priod of say 3 years.

2) to be given the opportunity to re-register as a majority-owned foreign business under the special provisions that allow majority foreign ownership/control

3) to be allowed to re-structure the business so that it is compliant.

Using professional structures it's extremely easy for medium size businesses to operate with de facto foreign control. The ones that will find it toughest will probably be the very smallest and the very biggest (where the costs and the restrictions respectively of complying are prohibitive to each business model).

I think that the administration feel under some pressure to address this issue as it relates to the most publicised alledged excesses of the previous regime.

I don't think that anyone can seriously believe that "it is in Thailand's best interests, now, to de-couple itself from use of foreign capital, and to 'encourage' foreign capitalists to take their speculations elsewhere." Not unless they believe that the risk of a major recession and significant socio-economic dislocation is in Thailand's best interests. Isolationism has given us examples like Mugabe and SLORC - I can't ever see Thailand in those straits but these are very ominous steps to take at this dangerous time and the repercussions might be beyond anyone's control.

[RedCardinal]

My understanding is that these moves by the government are simply their way of indicating that they realise that there has been a lot of bending of the laws relating to Thailand keeping control of its economic future in Thai, not foreign, hands.

It would appear that Thailand will be better off without such foreign "investors" now.

Times are changing; from a hundred years (and more) of fuel getting more and more easily-won (i.e. cheaper) to a hundred years (and more) of fuel getting more and more hard-to-win (i.e. expensive).

But Thailand's fundamentals are sound. It can keep its populace well fed and comfortably housed, and doesn't have to worry about fuel prices continuously rising from here on in, since the winter won't freeze anybody to death for lack of fuel.

The costs of what fuel it needs for transportation will always be more than covered by the receipts from exporting surplus rice, since world-wide food costs, and prices, are going up with the cost of inorganic fertiliser that rises with the cost of fuel.

It is in Thailand's best interests, now, to de-couple itself from use of foreign capital, and to 'encourage' foreign capitalists to take their speculations elsewhere.

As several postings above have pointed out, some foreign capitalists (both investors and speculators) have had some years of having a good run for their money and they will, of course, ask their Foreign Chambers of Trade to get them any reprieve possible. That is what Foreign Chambers of Trade are set up for.

And governments are approved into office (whether by election or acceptable coup) to tell Foreign Chambers of Trade what conditions will be applied and what will be acceptable in the way of foreigners trading within the borders of the country, and what won't.

The history of Siam and Thailand is a succession of skirmishes against those foreign entities (economic as well as political) that would colonise the country if they could. Various limitations to its abilities to skirmish have meant that it has often had to cede some ground until such time in the future as it could take it back.

This thread is about one such 'time of taking back' of a bit of 'the commanding heights of the economy'.

All I can say is wow. I'm not sure what school of thinking you are coming from, but I can assure you of one thing - the idea of Thailand being a sufficiency economy is all fine and dandy under one key assumption: every other economy on the planet stands still. That's not going to happen, and while the Thai standard of living declines or, at best, remains static under a protectionist regime, the relative standard of living here will decline.

While the foreign 'capitalists' may well remove profits from the country, they tend to leave far more on the table than they take away. I come from Ireland which has gone from the one of the poorest countries in the then EEC to one of the richest in the world. While I'm not using wealth as a proxy for well-being, I know most people are happy that they don't have to worry about where the next meal is coming from. Ireland's current status is the result of one thing - FDI Foreign Direct Investment.

The Americans came, they got European markets and we got jobs. Then as time progressed we got knowledge, and then wealth, and now we have our own companies with which to invest abroad. You know, it's not about money, it's about knowledge. Knowledge is far more valuable than money will ever be.

If foreign entities can no longer protect their investments then they will go elsewhere. This would not be a good thing for the average man in the street as there will be less resources to go around. This is not a zero-sum game - everyone will loose.

It's a real shame. I just hope the powers that be come to their senses before it's too late - I'd really like to set up base here because I love the country and the people.

[bkkandrew]

as i mentioned elsewhere

if this new law requires a company to re-allocate the voting rights,

as was being talked about,

any foreigner holding land and/or property via a company,

will find that he now effectively only "owns" 49%

and the thai directors can vote to sell it or anything else.

pretty scary

I recall talking about four years ago to a friend thinking of investing in property, using a nominee type company to do this. I cautioned him about that it was against the spirit of the law govening ownership and that one fine day, this scenario may come to pass. He didn't buy, tomorrow may find out many people and my friend will no doubt buy me a beer

Well he has missed out and you owe him a few baht I would say.

As property gone up more than 100% here in the past 4 years, if he bought back then for a million, valued it now at 2 million give the thai shareholders 51 percent he has just about broken even.

Prices have more than doublen where I live in the past two years, so please leave out the told you so's.

What day? Nothings happend and even if they proceed, the nightmare of taking 14,000 businesses to court or processing them and robbing them of land shareholdings etc. in the full glare if the intenational press will never happen. They would bankrupt the country before they take over a single rai. The Courts would be tied up for years, even then nobody would leave so it would have to be done forcefully. Tie the police up evicting elderly falangs, god forbid that they should injure a foreign pensioner dragging him out of his home! and whose left to stop the bombers!

No fight as gone up yet as nobody believes it will be pursued, certainly not retroactively. Should it happen, there will be the most enormous fight. Think anybody here is going to let them take our livelihoods away withou a fight.

No way mate, no way. I've been here 15 years and if I gave up half my house, I'd still walk away with more than I came with! Think of the rent I've saved as well! Were not the mugs you smug posters think.

Well, if you or any of the other 'type first and engage brain later' muppets had bothered to consider what my friend may have done with his money that may now make him want to buy me a beer, you would not have spouted such B/S.

He was proposing to sell his house in UK (rise - about 50% in four years and generated some 28000GBP in rental income) to buy in Thailand. Oh yes - Thailand, where there has been a property price increase but now you are faced with the stark facts that the rules appertaining to property ownership (in force for 100+ years) are now to be enforced and you have to give up what you have bought. So yes - he is happy indeed!

Rather less happy will be the whining, oh there is 14000 of us, so they can't touch us brigade, who find out that this is not their country and they have to play by other people's rules, however unfair. For you I have one message - there are a good deal many more people affected every day by the latest rules on matters such as visas, drinking hours (passim), advertisments, media content, currency movements, etc. etc. and their sheer weight of numbers mattered not one jot when it came to the Thai Authorities making and enforcing their decisions...

[bkk_mike]

Agree, but understand that only a few of the 14,000 are 'major players'. Don't be surprised if the majority of foreigner-employed thais or employed by the little guys.

Agreed... I really don't think that the present government or the military understands the trickle down effect. Surprising because the first thing anyone learns in the military is that "Sh*t rolls downhill". Most governments, not just Thailand, underestimate the overall effect of small businesses on a country and seem to concentrate on the ones making millions in profits. If you employ 4 Thais, even if they are your relatives and even if they don't do much, you are putting money into the economy that goes outward in a lot of directions. Cut off the head and the body dies, same in business and if the government keeps stabbing foreign business and investment, those businesses will find a way to stop the bleeding probably by moving elsewhere.

The withholding tax on fund transfers happened a few weeks after the Japanese car companies complained that the Thai Baht was appreciating too much, as the majority of the vehicles they build here are for export.

i.e. The government tried to help the car exporters, but picked a very short-sighted way of doing it.

This change to the voting structure for foreign ownership seems equally short-sighted. They're trying to curb Temasek (and maybe Carrefour / Tesco), but what happens if it impacts the same car companies... Do you see Toyota wanting their cars to be less than 50% Toyota? Admittedly the car companies won't get up and leave - there's too much money invested in plant and machinery here. However, they will stop expanding here, and expand elsewhere... (Indonesia, Phillipines, Vietnam, India, or China). Thailand isn't China. The market isn't so large that they HAVE to stay...

Thailand pre-Thaksin, and post 1997, seemed to be doing things right. Since then, things seem to have been getting worse. I actually was happy about the coup, until the idiotic currency controls (What country tries to do something which most other countries in the world proved doesn't work 40 years ago - except in very limited circumstances - like Malaysia in 1997 - in response to a genuine crisis... - and even then, Malaysia isn't exactly the poster-child to follow - they've made lots of their own mistakes).

Don't get me wrong though - Thailand is still a very nice place to live, and the people are wonderfully nice, but where I invested money here 6 years ago - I wouldn't now - not until things get back to normal. (or is this normal - and the long period of non-military rule since the last coup was the aberration).

[pgrin]

To those of you who hold property by way of a Thai Majority Shareholder set up and only see the possibilty that this new law will erode your voting position you have overlooked a significant detail. These new rules only apply to legally formed corporations. When you set up you land holding company using nominee shareholders you committed not one but two crimes. In a country with a functioning legal system you would not only lose your land but also be on the hook for fines and jail time. There would be no law suits filed if the Thai Gov said "We are repatriating the land you illegally hold. If you wish to contend this action please be aware that we will enforce the fines and jail time that is clearly written in the law. Kindly leave the keys at immigration on your way out of the country."

P

[patch]

I have been a member of this board for quite a while now. I do not live in Thailand but share my time between Malaysia and Australia. I have been told by various expats over the years that I am mad and I should be in Thailand etc bla bla....

Recent events in Thailand and now this latest bombshell have finally convinced me that I am not mad at all and my reasons for being in Malaysia are well founded. I own 100% of my offshore company in Malaysia and can do as I please. It's a little different for a farang to own a local Malaysian company but still workable and I can legally own landed property. The country has challenges for foreigners, like all countries do but on balance I like Malaysia a lot. English law, well developed .....all that.

We even have a beachfront land development and we will be able to sell bungalow blocks freehold to foreigners, which I think is unique in Asia and most of the world these days.

YEP, I think this crazy guy will stay in Malaysia.

Cheers

Graham Michell

[pap]

I am not investment savvy, anyone want to fill those of us that are not too wise on the implications of this Act being passed?

This is the Thais way of saying "go away foriegner" if they implement it. What many Thais don't understand is that the billions sitting on the sideline waiting for Thailand to get its act together will quit waiting and move elsewhere. If you are Thai they are saying "learn to farm because it will be difficult to do much else if this doesn't get fixed." Mexico did similar things to this in the 70's. It is still paying the price of those law changes to this day.

Economies that choose not to integrate lose competitive edge in a big way.

Translation, many less jobs in Thailand. More jobs in India, Malaysia, Vietnam, China and other places most of us do not love as much as Thailand.

[pap]

Thanks guys,

As Dupont says I can't see it getting that bad, Mugabe and whoever Thailand can produce would not be in the same league as far as ruthlessness is concern (I hope) andlike the recent stock market debacle I am sure they would back peddle fairly quickly.

d44, unsettling to read things like this I am sure. I wonder how it would effect the big corporations?

If enough smaller guys like you pulling out do you think the Gov't would take notice?

I know nothing about all of this but I do find it interesting, I hope you do not mind my questions..

It is not just little guys that this affects.

It is the message that institutional investors are more concerned with than the action. Most projects not already with funds in Thailand went on hold during the coup.

They have not released those funds into the Thai economy. After the bombings that incident made Thailand appear much more unstable. Add current Visa changes, recent attempts and controlling the baht exchange rate and now foreign investment rules and what you have from big money's standpoint is an unstable environment.

All of these things combined with projected 4.7% gains for next year compared to 9% for nearby countries with much more stable rules and anyone who sticks money in Thailand today must understand that this would be considered "very high risk". The longer Thailand is considered "very high risk" the more likely money goes elsewhere.

[terry57]

ahh, so how do you think it would effect Thailand as a country?

Thailand will remain to be #1 rice exporter for quite a while.

Seriously, I don't know and I don't care. I'm not a macroeconomist. I do care about my company. Next border run i'll be spending in KL to see what the posobilties are over there. You know, eggs and baskets ? I can't imagine others *not* taking similar measures.

actually vietnam how holds that crown, and there are many others that they will more than likely take away from Thailand..........

if you do business in any foreign country, things can happen and laws can change at the drop of a hat.

i would not panic just yet, as this discussion is second guessing and nothing has happenned .

its all assumpsion at this point.

i would be very surprised if the government dose anything to jeopardize and alienate the present business community operating in los.

we all know how much the government and thais in general worship money and i doubt that there aim will be to scare business away.

hope im right.

[pap]

as i mentioned elsewhere

if this new law requires a company to re-allocate the voting rights,

as was being talked about,

any foreigner holding land and/or property via a company,

will find that he now effectively only "owns" 49%

and the thai directors can vote to sell it or anything else.

pretty scary

I recall talking about four years ago to a friend thinking of investing in property, using a nominee type company to do this. I cautioned him about that it was against the spirit of the law govening ownership and that one fine day, this scenario may come to pass. He didn't buy, tomorrow may find out many people and my friend will no doubt buy me a beer

Well he has missed out and you owe him a few baht I would say.

As property gone up more than 100% here in the past 4 years, if he bought back then for a million, valued it now at 2 million give the thai shareholders 51 percent he has just about broken even.

Prices have more than doublen where I live in the past two years, so please leave out the told you so's.

What day? Nothings happend and even if they proceed, the nightmare of taking 14,000 businesses to court or processing them and robbing them of land shareholdings etc. in the full glare if the intenational press will never happen. They would bankrupt the country before they take over a single rai. The Courts would be tied up for years, even then nobody would leave so it would have to be done forcefully. Tie the police up evicting elderly falangs, god forbid that they should injure a foreign pensioner dragging him out of his home! and whose left to stop the bombers!

No fight as gone up yet as nobody believes it will be pursued, certainly not retroactively. Should it happen, there will be the most enormous fight. Think anybody here is going to let them take our livelihoods away withou a fight.

No way mate, no way. I've been here 15 years and if I gave up half my house, I'd still walk away with more than I came with! Think of the rent I've saved as well! Were not the mugs you smug posters think.

His friend would have only lost money had he bought and sold and taken the profit.

Over the course of 4 years there has been a decent return on most of the investment properties in most areas. In phuket this type of voting proxy already had some foreigners lose out. Money simply gone.

Technically anyone using a loophole that subsequently gets closed simply loses. I have seen exactly this happen in other countries. Each country has suffered for many years after doing this because people take money to more stable climates. Simply wishing something to be so or assuming the Thai government will do what is logical is a poor investment strategy.

I wish you luck but I would hate to rely on luck as a fix this problem.

[pap]

as i mentioned elsewhere

if this new law requires a company to re-allocate the voting rights,

as was being talked about,

any foreigner holding land and/or property via a company,

will find that he now effectively only "owns" 49%

and the thai directors can vote to sell it or anything else.

pretty scary

I recall talking about four years ago to a friend thinking of investing in property, using a nominee type company to do this. I cautioned him about that it was against the spirit of the law govening ownership and that one fine day, this scenario may come to pass. He didn't buy, tomorrow may find out many people and my friend will no doubt buy me a beer

U r joking right?? Is your friend still speaking to you?

Against all "expert" advise, my company bought 1 rai of seaview TPB5 land and built a fairly cheap 2 level wood house 4 years ago. Total cost of land + house was 900k baht.Total yearly land tax of 7 baht.

Assuming I had found a similar property for rent at 15,000 baht/month ( unlikely) and had rented said property for 4 years, I would have spent 720k baht. Allowing the Thai govt 1 year to totally confiscate my property I will save a further 180k baht. Total that would have been spent over the 5 years rented = 900k.

So even if I have my land/house confiscated with zero compensation at the end of this year I will be in the same situation as someone who had listened to the don't buy land argument. You owe the beers my friend.

Your assumption is based on the fact that the guy stuck his money under his bed instead. Most people don't and there were many many places a savy guy could have stuck his money and doubled it easily in 4 years.

You don't really know who owes who without knowing what the guy did with his money instead.

[loong]

Two questions:

How does this affect the big guys like Tesco Lotus and Carrefour? Although they use companies (like Lotus) as 'partners' to comply with current law, would Tesco be happy with lossing the voting share - I think not.

How does this affect, if at all, the so called 'special relationship' trade - eg Coke etc?

Just wondering.

If the worst happened, I imagine that the larger players would have to list shares equal to 51% on the Thai stock exchange, power would still stay in the hands of the board of directors. This obviously would only relate to their operations in Thailand. Manufacturing for export companies would restructure to comply with any new law. They will always find a way to cope.

The main concern for the Thai people is that any measures that dent confidence will reduce future foreign investment in Thailand.

The majority of Thais do not pay tax, foreign companies and their employees do.

What nobody here has mentioned; When a foreign owned company transfers it's profits out side of Thailand, it helps to weaken the Baht, thereby helping Thailand to remain competitive.

I hope that Thailand doesn't shoot itself in the foot again!

[midas]

My question is even if Cabinet decides this morning not to implement these changes right

now bearing in mind all the other recent disruptive events in Thailand , what is to stop them

from reintroducing this later on - may be next year or the year after? Surely they have now

shown their hand -just as they did a few weeks ago with the sudden introduction and equally sudden

withdrawal of the 30% withholding tax ? The constant changing and fiddling around

that these people undertake regarding their visa laws, investment laws etc would cause

me permanent anxiety if I were to have any significant amount of money invested in this country !

Yes may be I missed out on the recent real estate boom but I am more concerned

about return of capital rather than return on capital

[midas]

This Japanese gentlemen quoted in today's edition of The Nation evidently has similar concerns :-

" Keisuke Matsumoto, secretary-general of the Japanese Chamber of Commerce in Bangkok, said Japanese

investors were highly concerned about the amendments as they would force major investors to restructure their companies.

Keisuke Matsumoto said the government should allow more businesses to trade freely, such as advertising.

It should also create a stable environment to boost understanding among foreign investors, and should not

change business laws or trade policies so often.

[pap]

Protectionism is not neccessarily a bad thing.

But it certainly seem as though the current leaders have decided they want to go against the trend that most of the rest of Asia is following.

If it's simply to remove foreign influence from getting control of the key assets it makes sense. If it's really an ulterior motive to let Chinese infiltrators get more control then it stands to reason that the Chinese system will be applied eventually undoing all of the protectionist policies that are being put into place now.

Looks to me like the King and his peeps are just trying to protect their own and save Thailand from dilution by foreign investors ready to ransack the economy at the first chance. Also makes it harder for people like Taxsin to sell key national assets...

Military governments are always nationalistic (xenophobic in nature). This is not a good form of protectionism.

Thai people are proud of being Thai. That includes Thai-Chinese THAIS so thinking China is controlling Thailand through its many Thai-Chinese businessmen would be a mistaken assumption. These people recognize the danger China poses because of their background. More so than foreigners do.

If you want to address sanitation, schooling, roads, feeding the current population, water management and bettering the life of Most Thai people today, protectionism is to be avoided. (Unless you are of the view that oil will run out tomorrow and we will become agrarian societies.) I don't believe that. What I believe is big business is the driver to raising our standard of living, allowing us to live longer healthier lives because we choose to work smart over working hard.

To support the number of people Thailand has foreing investment is required.

Thai people are in a quandary. They want their customs and traditions left intact but thier children want more "things". This is not an easy road to hoe. Hopefully they can.

As far as a phone company being a national asset ....well I think that is going a bit far. Regardless it still employs Thais and the money made is taxed in Thailand and the wages are paid in Thailand. For the most part the money is invested in Thailand as well.

An added detriment to the new laws is that continuing to invest the money made by that and all companies in Thailand will require the people doing the investing to take a second look. Maybe they should be investing part of those profits in other countries where assets are, and will continue to be, more liquid.

[BKK90210]

Another take on this subject

"Pramon Suthiwong, chairman of Thailand's Board of Trade business group, said he expected the law to limit foreign ownership in Thai companies to about 50 percent, while redefining voting rights for local subsidiaries.

"We proposed several options to the Commerce Ministry, but basically Thailand will give them a period of one to two years to adjust themselves to comply with the new law," Pramon told AFP."

[pap]

ahh, so how do you think it would effect Thailand as a country?

Thailand will remain to be #1 rice exporter for quite a while.

Seriously, I don't know and I don't care. I'm not a macroeconomist. I do care about my company. Next border run i'll be spending in KL to see what the posobilties are over there. You know, eggs and baskets ? I can't imagine others *not* taking similar measures.

actually vietnam how holds that crown, and there are many others that they will more than likely take away from Thailand..........

if you do business in any foreign country, things can happen and laws can change at the drop of a hat.

i would not panic just yet, as this discussion is second guessing and nothing has happenned .

its all assumpsion at this point.

i would be very surprised if the government dose anything to jeopardize and alienate the present business community operating in los.

we all know how much the government and thais in general worship money and i doubt that there aim will be to scare business away.

hope im right.

Your assumption may be based on a false premise. You are assuming they "know" that their actions will scare away business. Governments do stupid things on a regular basis.

"i would be very surprised if the government dose anything to jeopardize and alienate the present business community operating in los."

You mean like a coup?

Or like manipulating the Baht?

I could go on but my point is they are already doing things that alienate businesses.

[JimmyGreaves]

To those of you who hold property by way of a Thai Majority Shareholder set up and only see the possibilty that this new law will erode your voting position you have overlooked a significant detail. These new rules only apply to legally formed corporations. When you set up you land holding company using nominee shareholders you committed not one but two crimes. In a country with a functioning legal system you would not only lose your land but also be on the hook for fines and jail time. There would be no law suits filed if the Thai Gov said "We are repatriating the land you illegally hold. If you wish to contend this action please be aware that we will enforce the fines and jail time that is clearly written in the law. Kindly leave the keys at immigration on your way out of the country."

P

Get a life, typical i know it all poster who knows nothing!

[pap]

Two questions:

How does this affect the big guys like Tesco Lotus and Carrefour? Although they use companies (like Lotus) as 'partners' to comply with current law, would Tesco be happy with lossing the voting share - I think not.

How does this affect, if at all, the so called 'special relationship' trade - eg Coke etc?

Just wondering.

If the worst happened, I imagine that the larger players would have to list shares equal to 51% on the Thai stock exchange, power would still stay in the hands of the board of directors. This obviously would only relate to their operations in Thailand. Manufacturing for export companies would restructure to comply with any new law. They will always find a way to cope.

The main concern for the Thai people is that any measures that dent confidence will reduce future foreign investment in Thailand.

The majority of Thais do not pay tax, foreign companies and their employees do.

What nobody here has mentioned; When a foreign owned company transfers it's profits out side of Thailand, it helps to weaken the Baht, thereby helping Thailand to remain competitive.

I hope that Thailand doesn't shoot itself in the foot again!

You would be correct if the baht became weaker in relation to "all currencies". Most of us tend to look at the weakness or strength of the baht compared to any one of a number of western currencies on this board. But the baht is also moving against other regional currencies. So just because the baht weakens compared to a western currency does not make Thailand more competitive. "It makes Thailand more competivie with western countries".

The baht has remained strong compared to regional currencies and simultaneously Thailand has a slower growth rate than many of its neighbors. This is not a formula to strive for. They have some things to fix and the sooner the better.

[terry57]

ahh, so how do you think it would effect Thailand as a country?

Thailand will remain to be #1 rice exporter for quite a while.

Seriously, I don't know and I don't care. I'm not a macroeconomist. I do care about my company. Next border run i'll be spending in KL to see what the posobilties are over there. You know, eggs and baskets ? I can't imagine others *not* taking similar measures.

actually vietnam how holds that crown, and there are many others that they will more than likely take away from Thailand..........

if you do business in any foreign country, things can happen and laws can change at the drop of a hat.

i would not panic just yet, as this discussion is second guessing and nothing has happenned .

its all assumpsion at this point.

i would be very surprised if the government dose anything to jeopardize and alienate the present business community operating in los.

we all know how much the government and thais in general worship money and i doubt that there aim will be to scare business away.

hope im right.

Your assumption may be based on a false premise. You are assuming they "know" that their actions will scare away business. Governments do stupid things on a regular basis.

"i would be very surprised if the government dose anything to jeopardize and alienate the present business community operating in los."

You mean like a coup?

Or like manipulating the Baht?

I could go on but my point is they are already doing things that alienate businesses.

yes ok,

i get your point but coups come and go in thailand, always have done and always will.

the baht also will always fluctuate as that is the nature of currency even if it is manipulated.

investors already know about these things "or should do" and it is the nature of the beast when investing in thailand.

my point being,

a deliberate change of law which will seriously affect business is not in the governments best interest and i doubt whether they would be silly enough to do that.

external factors like coups and currency fluctuation dont enter into it as they are out of ones control.

as an investor one can only go on the laws of the day, study the business history of that country and make an informed decision whether he chooses to paticipate.

[pap]

My question is even if Cabinet decides this morning not to implement these changes right

now bearing in mind all the other recent disruptive events in Thailand , what is to stop them

from reintroducing this later on - may be next year or the year after? Surely they have now

shown their hand -just as they did a few weeks ago with the sudden introduction and equally sudden

withdrawal of the 30% withholding tax ? The constant changing and fiddling around

that these people undertake regarding their visa laws, investment laws etc would cause

me permanent anxiety if I were to have any significant amount of money invested in this country !

Yes may be I missed out on the recent real estate boom but I am more concerned

about return of capital rather than return on capital

You are obviously a wise man. Unfortunately some of us are already committed. Even if it is only with modest test capital.

My investments are not in areas of the law that are under question.......yet.

I do not like the direction things are going today and don't have to look very hard to find greener pastures.

It is difficult though when you let your love of a place like Thailand affect your investment choices. If you know that you can avoid that pitfall....well almost.

[Ozziepaul]

I read recently that in order to ride the Thai 'waves' and survive in this country, one has to indeed be resilient.

I concur with this statement wholeheartedly. Whilst only having been in Thailand for a split second compared to others, it appears more than clear to me that a foreigner should be VERY careful.

I am conscious of still being in a cultural state of flux and yes I do have the option of jumping on a plane and going home. Easier said than done when one has a partner and 2 children.

The entire uncertainty that is oscillating throughout the country in so many areas cannot be good for such a grand and proud nation.

Nor do I feel it instills economic and investment certainty for those wishing to avail themselves of trade opportunities.

Personally, I will not be buying anything here, other than food and the daily requirements. I will not be bringing money into the country for investments and nor will I even look at real-estate. For the time being.

The best I feel we can do, is put one foot in front of the other and see what each day brings. Hoping of course that the entire situation ameliorates and stabilises.

Many people that post on this forum are obviously well versed in the Thai way of life and extremely informed in terms of politics, economics, power and government etc.

I would sincerely like to clarify that my comments are in no way intended to offend anyone or the institutional processes in this country.

I am just so bloody confused at the moment that my head's spinning and it makes it a challenge.

Good luck to all and thanks for letting me have my say.

Big Paulee.