Thailand To Limit Foreign Stake In Firms To 50 Per Cent

[Plus]

What's this thread about again? Popmous foreign cockroaches? I must be in the wrong place.

[Mai Krap]

"10% farang versus 90% Thais" <--- Hey, Mai Krap, that's a nice little stats you got there. I wonder where you got it from. You've done a thorough study on the subject or something? Or you just made it up out of thin air to suit your pathetic argument? Yes, Thais are responsible for what's going on in their sex industry. No one in the right mind or with half a brain can deny that. But the pathetic, desperate-for-sex farangs have helped it thrive too. And it's the truth. I never said that Thais weren't also responsible. I just said the cockroaches indeed have helped it thrive. (Sorry JingThing I couldn't resist.) Pattaya, Patpong, parts of Sukhumwit wouldn't have become what they are, had there not been sex tourists. These places were created solely to cater to the needs of you-know-what.

As for who's responsible more. Frankly I don't know. And I'm not gonna be stupid enough to make up the numbers without any bases. The truth of the matter is that, the sooner Thailand can rid herself of these hedious farangs, the better off she will be. And yes, thailand will be all right without them. We have mouch more going on than just sex industry (as Prakanong probably has already figured out by having educauetd himself a bit with CIA factbook.)

I wonder if your even Thai at all, It seems on your first post you declared yourself 100% Thai and started all the fuss that you now carry onto this thread which is supposed to be about Thai Bussiness Law. I briefly looked at a few of your posts and all the information you have posted could have come from a trade journal and I did notice you mentioned your not even in Thailand which was a wild guess on my part. Im just wondering exactly where you are? Maybe you could tell us or the Admin could do a IP check and let everyone know? I do think it would be funny if your sitting in the United States telling me all about Thailand.

Where do I get the numbers? Well I have been around, While Im a very conservative guy it does not take a rocket scientest to come to the conclusion that I have came to. Anyone who has ever been out on the town with the local VIPs knows exactly what the helll goes on here as its not hidden. There was a big stir in my on family recently because a distant cousin was found to have been tricking, kidnapping, or whatever you want to call it, young village girls and selling them to Malaysia and or Singapore. His business partner was his evil wife and guess what, they cant type even one word of English. I could go on and on and on about this matter but it is off topic, Maybe you could start a new thread like, Farang Tok Mun, Bai Lao Lao! (If you even know what that is?)

Back to the topic of bussines or the lack of it!

[longway]

"Hypocritical farang sex addicts" and "pompous cockroaches" will be my phrases for today. Thank you.

Btw, apart from your excellent English, your opinions sound like those of some shirtless, Beer Chang swilling labourer.

didnt u say in another thread that u will be glad to be out of thailand and ´back to civilisation´? quite the hypocrite arnt u?

i will agree with u that hypocritical farand sex addicts and pompous foreign cockroaches are indeed the phrases of the day.

[ThaiGoon]

Yeah....the numbers based only on your personal experinces are very reliable...

Back to the topic.

[konangrit]

Yeah....the numbers based only on your personal experinces are very reliable...

Back to the topic.

I actually think 90% of customers being Thai is quite conservative.

[sriracha john]

What's this thread about again? Popmous foreign cockroaches? I must be in the wrong place.

egads... the place is crawling with them....

[kmart]

"Hypocritical farang sex addicts" and "pompous cockroaches" will be my phrases for today. Thank you.

Btw, apart from your excellent English, your opinions sound like those of some shirtless, Beer Chang swilling labourer.

didnt u say in another thread that u will be glad to be out of thailand and ´back to civilisation´? quite the hypocrite arnt u?

How so? I said "after my contract finishes here I will be glad to go back to civilisation",.... mmm'kay?????

I believe everything I read on here, don't you?

[Old Man River]

Thailand to limit foreign stake in firms to 50 per cent

BANGKOK: -- Thai government will limit foreign investors to holding no more than 50 per cent of the shares or the voting rights in companies here under legal changes approved Tuesday, Finance Minister Pridiyathorn Devakula said.

"Foreign investors who altogether hold more than a 50 per cent stake in a company must lower their stake within a year," Pridiyathorn Devakula said after a cabinet meeting.

"Foreign investors who hold more than 50 per cent of voting rights must also reduce their voting rights within two years,"he added.

-- AFP/The Nation 2007-09-09

After spending over 10 years talking to chairman and CEO's of some of the largest western MNC's (most doing business in Thailand), the one thing I am sure of is that their board's require control over their investments. Management of these companies have a fiduciary responsibility to their shareholders to prudently manage the company's assets.The biggest shareholders in most of these companies are institutional investors, who require companies to maintain control over corporate assets. Not having control is, therefore, a non starter as the downside (legal ramifications) is too high. Separate, non-disclosed private agreements giving control are also non starters if they contravene the letter of the laws. The existing nominee structures were viewed as OK, because they followed the letter of the laws (albeit, perhaps not the spirit of the laws). Hence, under the nominee/voiting control structures, it was a win-win situation in that local laws were being followed and the large foreign direct investors were getting control. Now, that will no longer be the case.

BOT FDI statistics for the Jan. to April time periods reflects Singapore to be the largest FDI investor in 2006 over this period. Netting this out (it was the Temasek purchase), shows the US, Japan, UK and Germany to traditionally be the biggest FDI players in Thailand during the past 3 years for the time periods mentioned. I am not sure how Japan traditionally views control over its investments, but for the others, control is paramount.

I highly doubt we will see a wholesale pull out due to these new laws. Instead it will happen gradually. New projects will be shifted to more friendly neighboring countries and sales of existing assets will be slowly put up for sale (nobody will seek a firesale in order to maximize sale proceeds). Hence, Thailand will be negatively impacted gradually, giving existing government officials the sense that everything will be OK. It won't.

[ThaiGoon]

After spending over 10 years talking to chairman and CEO's of some of the largest western MNC's (most doing business in Thailand), the one thing I am sure of is that their board's require control over their investments. Management of these companies have a fiduciary responsibility to their shareholders to prudently manage the company's assets.The biggest shareholders in most of these companies are institutional investors, who require companies to maintain control over corporate assets. Not having control is, therefore, a non starter as the downside (legal ramifications) is too high. Separate, non-disclosed private agreements giving control are also non starters if they contravene the letter of the laws. The existing nominee structures were viewed as OK, because they followed the letter of the laws (albeit, perhaps not the spirit of the laws). Hence, under the nominee/voiting control structures, it was a win-win situation in that local laws were being followed and the large foreign direct investors were getting control. Now, that will no longer be the case.

BOT FDI statistics for the Jan. to April time periods reflects Singapore to be the largest FDI investor in 2006 over this period. Netting this out (it was the Temasek purchase), shows the US, Japan, UK and Germany to traditionally be the biggest FDI players in Thailand during the past 3 years for the time periods mentioned. I am not sure how Japan traditionally views control over its investments, but for the others, control is paramount.

I highly doubt we will see a wholesale pull out due to these new laws. Instead it will happen gradually. New projects will be shifted to more friendly neighboring countries and sales of existing assets will be slowly put up for sale (nobody will seek a firesale in order to maximize sale proceeds). Hence, Thailand will be negatively impacted gradually, giving existing government officials the sense that everything will be OK. It won't.

One thing for you to bear in mind is that this amendment will only be applied to only a few industries. It won't be applied across the board. This point has been stated again and again in this thread by the way. Experts (foreigners and Thais alike) seem to all agree that, in practice, the new amendment won't have much impact to the overall picture of foreign investment, but psychologically, it could have a significant impact. I hope all the foreigners who look to invest in Thailand will study it carefully and won't just panick and jump to conclusion.

[Mobi]

Thailand to limit foreign stake in firms to 50 per cent

BANGKOK: -- Thai government will limit foreign investors to holding no more than 50 per cent of the shares or the voting rights in companies here under legal changes approved Tuesday, Finance Minister Pridiyathorn Devakula said.

"Foreign investors who altogether hold more than a 50 per cent stake in a company must lower their stake within a year," Pridiyathorn Devakula said after a cabinet meeting.

"Foreign investors who hold more than 50 per cent of voting rights must also reduce their voting rights within two years,"he added.

-- AFP/The Nation 2007-09-09

After spending over 10 years talking to chairman and CEO's of some of the largest western MNC's (most doing business in Thailand), the one thing I am sure of is that their board's require control over their investments. Management of these companies have a fiduciary responsibility to their shareholders to prudently manage the company's assets.The biggest shareholders in most of these companies are institutional investors, who require companies to maintain control over corporate assets. Not having control is, therefore, a non starter as the downside (legal ramifications) is too high. Separate, non-disclosed private agreements giving control are also non starters if they contravene the letter of the laws. The existing nominee structures were viewed as OK, because they followed the letter of the laws (albeit, perhaps not the spirit of the laws). Hence, under the nominee/voiting control structures, it was a win-win situation in that local laws were being followed and the large foreign direct investors were getting control. Now, that will no longer be the case.

BOT FDI statistics for the Jan. to April time periods reflects Singapore to be the largest FDI investor in 2006 over this period. Netting this out (it was the Temasek purchase), shows the US, Japan, UK and Germany to traditionally be the biggest FDI players in Thailand during the past 3 years for the time periods mentioned. I am not sure how Japan traditionally views control over its investments, but for the others, control is paramount.

I highly doubt we will see a wholesale pull out due to these new laws. Instead it will happen gradually. New projects will be shifted to more friendly neighboring countries and sales of existing assets will be slowly put up for sale (nobody will seek a firesale in order to maximize sale proceeds). Hence, Thailand will be negatively impacted gradually, giving existing government officials the sense that everything will be OK. It won't.

Good post OMR, and one with which I entirely agree.

You will see from my earlier post that the first pre-requisite for new investments/aquisitions is effective mamangement conrol. Without that, for a majority of western investors, there is no deal.

Those already here will take a long hard look at how they can manage the situiation if they are required to divest their majority holdings, and for the future there is no doubt that most investors will look elsewhere for new opportunities.

The overall effect will undoutedly take time to make itself felt - by which time this current bunch of buffoons will probably long gone, and and the new bunch will be able to blame all their troubles on the previous regime, and, of course, the evil farangs who just want to take over Thailand.

[Plus]

But do these MNCs ever invest in protected industries relying on use of loopholes to circumvent the law?

They probably won't risk it in the first place.

In real life - let's find any MNC that is affected by these changes to the law. I saw the list somewhere but no usual big names. I remember only Asia Cement.

Here's some info:

Pridiyathorn told foreign investors yesterday that among 1,337 companies to be affected by the amendments, only six were listed.

SET president Patareeya Benjapholchai, however, repeatedly said that about 15 companies identified as being in Annex 1 and 2 of the law might have to adjust their shareholdings to meet with the draft.

"The adjustment of the definition of 'foreigner' in applying the Foreign Business Act of 1999 will not affect most listed firms," she said, referring to a preliminary study of public companies. "This is because most listed firms are in the act's Annex 3, which will not be affected. About 15 businesses classified as being in Lists 1 and 2 of the act might have to adjust their shareholdings to meet the revised definition."

Edited January 12, 2007 by Plus

[Dupont]

Sorry, Jingthing, for the use of that word. But I really wanted to aim it at a few people. Anyway, good advice krab. I'll keep that in mind. Thanks.

I'd like to hear it from a Thai man that Thai men do not indulge in tis behaviour. All those bars and clubs in Thon Buri that foreigners are banned from!! Just who goes in there? All the karaoke bars and black bars that I have seen inside have absolutely no foreigners in them, the list are all in Thai.

Mia Noi is a thai invention and a Thai word.. It means prostitute, but you little men have to save face and call it a mistress. Really, 60 year old Thai men with Mia Nois at university and living in paid for appartments... You resemble many of the foreing cockroaches you so dispise.

Same same, not different, just hypocritical and face saving.

You lot invented it out here and now some of you have a little education, you try and deny what attracted most people here in the first place or what keeps them here.

I was referring to the business community not foreigners coming on holiday and having girlfriends.

You are a blinkered hypocrite and indeed a goon! I suspect you are not Thai, as you only seem to know about tourist areas.

And Dupont, I'm 100% Thai. And yes it's possible for Thais to know little bit of English. (I know it's the reason why you suspected I'm not Thai.) Don't be such a pompous Westerner. Try to interact more with middle-class Thais, and you will learn that, yes, they can converse in English a bit too.

I also think that it's totally not a very smart move to assume someone's education background, when you absolutely know nothing about that person. Anyway, all I'd say is that you are probably very likely to never would have been admitted to my alma maters.

And Mia Noi does mean a mistress by the way.

Mix with middle class Thais. Ha Ha Ha Ha Ha Ha Ha

Rather mix with cockroaches mate. Its them that help keep the poor people in their poor state. They are the parasites that take bribes every time we buy something, try to get some paperwork done, try to set up legitimate biusinesses.

No way hozay, let the middle classes live in their ivory towers and may you turn out as miserable in life as the middle classes of DEVELOPED countries.

No thanks Goon.

If you are Thai answer this quickly. Whats the connection between kites and fishing and whats the difference?

Mia Noi is a loose translation of wife/mistress SMALL as in SMALL man, SMALL mind, SMALL penis, SMALL circle of friends. Its a prostitue though as its a kept woman, givea woman money and have sex with her, is prostitution. It's that face thing again and you like to dress it up.

I think you are a troll, possible a sad white woman that came here and never got laid. Either way, you're a sad &lt;deleted&gt;.

Edited January 12, 2007 by Dupont

[dogleg]

When the link said BREAKING NEWS, I wasnt expecting this.!!!!

Come on then Dupont we have to know....

[ThaiGoon]

Mix with middle class Thais. Ha Ha Ha Ha Ha Ha Ha

Rather mix with cockroaches mate. Its them that help keep the poor people in their poor state. They are the parasites that take bribes every time we buy something, try to get some paperwork done, try to set up legitimate biusinesses.

No way hozay, let the middle classes live in their ivory towers and may you turn out as miserable in life as the middle classes of DEVELOPED countries.

No thanks Goon.

If you are Thai answer this quickly. Whats the connection between kites and fishing and whats the difference?

Mia Noi is a loose translation of wife/mistress SMALL as in SMALL man, SMALL mind, SMALL penis, SMALL circle of friends. Its a prostitue though as its a kept woman, givea woman money and have sex with her, is prostitution. It's that face thing again and you like to dress it up.

I think you are a troll, possible a sad white woman that came here and never got laid. Either way, you're a sad &lt;deleted&gt;.

It's pretty neat and educational really how someone from a "developed" country could just paint the middle class Thais with the same brush. I guess that's what a "civilized" and "well educated" person like you does, ehh? 3rd world peole with little education like me surely still have a lot to learn from 1st world people like you.

As for kites and fishing, they are male and female masturbations. And yeah, Mia Noi means mistress. It doesn't mean prostitiute. We, Thais, already have words for prostitute.

Back to the topic?

[sbk]

Keep on topic, next flame gets kicked, is that clear?

[johnnyk]

Thanks for that sbk, much needed.

Really good thread that was spiralling down.

[Bruce1]

Totally agree with Old Man River. Investors won't invest unless they get control. Why? Because they have to answer to their shareholders. If they can't justify their decisions to their shareholders, they get sacked - very simple.

I keep asking if all this talk about there only being a few companies on the lists of declared foreign companies is a smokescreen - no answer yet.

Isn't it the supposedly Thai companies which really aren't because they used voting strtuctures which will now have to be changed who are where the problem lies?

How would the Thai government KNOW how many there are? They wouldn't have the data. They won't have it until those companies put their hands up. That won't happen because many will simply strip the assets and fly the coop. That will take time.

It could be two years before the full impact is known.

Come on experts, is that right or not?

If it's not right, why are the papers full of experts (many Thai) saying thats what will happen?

Help me, I'm trying to use my meagre mental skills to sort the propaganda from the facts.

[LivinLOS]

Totally agree with Old Man River. Investors won't invest unless they get control. Why? Because they have to answer to their shareholders. If they can't justify their decisions to their shareholders, they get sacked - very simple.

I keep asking if all this talk about there only being a few companies on the lists of declared foreign companies is a smokescreen - no answer yet.

Isn't it the supposedly Thai companies which really aren't because they used voting strtuctures which will now have to be changed who are where the problem lies?

How would the Thai government KNOW how many there are? They wouldn't have the data. They won't have it until those companies put their hands up. That won't happen because many will simply strip the assets and fly the coop. That will take time.

It could be two years before the full impact is known.

Come on experts, is that right or not?

If it's not right, why are the papers full of experts (many Thai) saying thats what will happen?

Help me, I'm trying to use my meagre mental skills to sort the propaganda from the facts.

Thts exactly my thoughts.. the whole thing is minority farang shareholders having control.. Thats not the same as foriegn companies as they are listing them..

Also its the SME type businesses that seem the most royally screwed over, not the SET listed ones with public stock ownership, but the small scale building, boating, etc type things.. How many farangs do you know that has a company.. Now how many of those companies are listed on the SET ?? Apart from 1 guy I know who has the Amity solution available EVERY other farang owned and run company I know of is controlled via voting shares.

Thats more than 1000 companies on Phuket alone, not in all of Thailand.

[Sturbuc]

Well, as reported in DW-TV, some major companies think about to reduce their engagemant in Thailand - not to forget the freezing of foreign investments.

[Nawtilus]

And nobody trusts a thai to have control of their company and rightly so too.

[longway]

"Hypocritical farang sex addicts" and "pompous cockroaches" will be my phrases for today. Thank you.

Btw, apart from your excellent English, your opinions sound like those of some shirtless, Beer Chang swilling labourer.

didnt u say in another thread that u will be glad to be out of thailand and ´back to civilisation´? quite the hypocrite arnt u?

How so? I said "after my contract finishes here I will be glad to go back to civilisation",.... mmm'kay?????

I believe everything I read on here, don't you?

well i suppose if it wasnt for his excellent english, thaigoon and his opinions would fit in quite well here.

[slimdog]

Japanese to hold off on new investments

The Japanese Chamber of Commerce, Bangkok (JCC), revealed Friday that Japanese investors will delay or cancel their new investments in Thailand, which will be in line with their long-term investment plans in the country which are reviewed or newly expanded every five years.

More can be found at: http://www.nationmultimedia.com/breakingne...newsid=30024000

[Plus]

Let's think about it one more time.

They didn't change ownership laws, only definition of nominees.

When they give their count - let's say 1,337 companies, do they mean outright foreign owned companies or only foreign controlled?

It couldn't be the first case as it would have been illegal from the start.

It's natural to expect that they counted companies that comply with ownership laws, i.e. legally Thai, but where foreigners exercise control through nominees or through voting rights.

This is exactly what are our members are asking about.

Did they miss something? Perhaps only companies that don't list any foreign shareholders at all and don't have any foreign names whatsover, but are still controlled by foreigners. Is it possible? What would be the legal position of a foreigner in such a company so that it completely escaped government's count?

[Mai Krap]

This is all real simple, They have spoken out of turn and then began back peddleing as soon as anyone started asking questions with a typical , yes, yes, yes, keep everybody happy by agreeing with everbody only now its so screwed up nobody including the writers of the new laws know what in the helll any of its about. All this boils down to people will not spend money when there is nothing protecting their investment or historical evidence that the laws they create a business under will remain in tact. It becomes a simple issue of stability and that is all.

[Dupont]

This is all real simple, They have spoken out of turn and then began back peddleing as soon as anyone started asking questions with a typical , yes, yes, yes, keep everybody happy by agreeing with everbody only now its so screwed up nobody including the writers of the new laws know what in the helll any of its about. All this boils down to people will not spend money when there is nothing protecting their investment or historical evidence that the laws they create a business under will remain in tact. It becomes a simple issue of stability and that is all.

A nice appraisal of what happened.

Ironically, the people the Thais appear to want to get out of the country the most (lower income long stay semi-resident types like me), are the most reliable investors they have.

Year after year we bring money out here, invest it in (often crack-pot pie in the sky dream) businesses to support our new families. Not many of us have pulled the plug on investment as we are here for the rest of our lives.

Another vital thing they missed (as I just did!) is in our foreigner areas, lots of the businesses are in a state of flux. Owner buys bar/restaurant, brings life savings, makes promising start, starts drinking profits, gooses the staff, shafted by the missus then back to blighty pennyless. Bar Restaurant back on market.... repeat ad infinitum! Many of these bars and restarants generate massive income here as they invariable refurb them when they buy them. Next time the bar/restaurant goes broke, the lineup of new owners will be diminished by all this crap.

By introducing this and backtracking as fast as they have though, has done a lot of damage to their image in the minds of investors. Was a dreadful idea in the first place, dreamt up for the wrong reasons and can only play into Toxins hand.

Edited January 12, 2007 by Dupont

[Plus]

Are restaurants and beer bars in Pattaya on the list of protected industries reserved only for Thais?

I dont' think so.

They've just tighten up the screws on companies foreigners were not supposed to invest in in the first place.

[Mai Krap]

"The best way to leave Thialand with a little money is to bring a lot when you come"

Bernard Trink

[ChiangMaiAmerican]

In yesterday's Bangkok Post there was a letter from a Thai trying to justify Thailand's draconian foreign investment laws. As an example he used the US Governments rule on investment in the domestic airline industry and tried to color a majority of foreign investment in other countries with the same brush. Since he is familiar with that rule (unless he was coached which is possible) he should also know that with a vast majority of the businesses and industries in the US there are no rules on foreign majority ownership. Chicken of the Sea International, owned by Thai Union is an example of a major US food company that is 100% owned by a Thai company. No 49-51 rule here. Chicken of the Sea is a top 10 supplier of tuna and seafood products in the US. They compete with US companies like Starkist.

In the US there are literally thousands of small businesses owned by Thais. Thais and other foreign nationals can own land and homes in their own name. There is no two tiered pricing in the US, its against the law and it is prosecuted. The government even uses testers to build cases against businesses who try to defy that law and the equal housing laws. Thais can even become US citizens without an extraordinary amount of effort.

And, as the writer of that letter likely knew, ordinary Thai citizens are able to open small businesses in the US under the Treaty of Amity without being required to invest a set amount of money as is the case with foreign investors who come from countries without the benefit of a similar treaty who are required to invest one million US dollars. In fact, they are only required to invest a sufficient amount relative to the type of business they plan to invest in or open. Some immigration attorneys claim that with some businesses that amount can be as little as $25,000. The US courts settled that rule long ago in the 1980s. Further, Thais investing in the US under the treaty are not required to pay themselves a minimum salary much less one that places them in the top 5% of US wage earners. Thais in the US are not required to employ a minimum number of Americans in order to receive a Treaty investor visa. The business is expected to generate employmen for Americans at some point but not form day one and there is no set number in order to obtain a work visa. Thais who come to the US under the treaty can do any work needed for his business at any location as long as it is related to that business. He is required to manage and control the business but can do other work within the organization. The Thai does have to report to immigration periodically but does not have to obtain a separate work permit from another agency. In fact, though it is not part of the agreement, the wives of Thais who open treaty businesses in the US can obtain a work visa and either work in the business or seek employment in an unrelated business. Contrast the way Thai Treaty investors, including small business investors, are treated in the US with the way Thailand treats Americans.

I wonder what Thais would say if other countries where Thais have been allowed to own more than 50% of a company were to change the rules to require them to sell a portion of their interest so they were no longer the majority owner? Can you hear the crying and screaming already?

[OlRedEyes]

If you're looking for fairness, it's not a concept thats held in high regard here.

Like any person, countries build a reputation. The market will eventually react to that reputation.

Big and powerful, or potentially powerful countries can get away with quite a lot, but Thailand is neither.

[ChiangMaiAmerican]

The office of the US Trade Representative publishes an annual report on foreign trade barriers by country. The new 2007 report covering 2006 should be released soon. I wonder what they will say about Thailand this year?

Many Thais labor under the illusion that the US and other developed countries cannot survive without Thailand. In the case of the US, the substantial Thai trade deficit with Japan is paid for by the trade surplus with the US. This concept that the US and ther developed countries cannot survive without Thailand is apparently taught in at least some of the grade schools here. My wife who is educated though not in business or economics was surprised to find out that the US is net rice exporter. When she was a student in high school in the 1980s she was taught that the US is dependent on Thai food exports. Without them she was told Amercans would starve. The fact that most people outside Asia don't eat rice daily was also a surprise to her. If ordinary Thais were taught economic facts rather than a nationalistic fantasy perhaps they would be more willing to act in a reasonable and equitable manner when it comes to foreign investors in their country.

Edited January 13, 2007 by ChiangMaiAmerican