Amendments To The Foreign Business Act.

[tamaique]

I've been trying to make sense of the amendments to the foreign business act which can be found at:

http://asialaw.tripod.com/database/foreign.html

Anyway, in the lists of permited business, List 3...

The business which Thai national are not yet ready to complete with foreigners:

.....(11) Broker or agent business, except:

...© Being broker or agent for trading, purchasing or distributing or seeking both domestic and foreign markets for selling domestically manufactured or imported goods in the manner of international business operations having the foreigners' minimum capital 100 million Baht or more.

1) As I understand this, if I am an agent promoting the export of Thai products and wish to own a majority of stock in my company after the amendment comes into place, I would need to increase the registered capital of my business to 100 million Baht or more?

2) If increased to 100 million Baht, what percentage of that amount needs to actually be invested? (20%, 0%)? I'm sure the tax implications of increasing registed capital to 100 million will be disastrous anyway if that's the case.

3) Doesn't it sound rather stupid that a foreign controlled company promoting Thai exports be punished under the amendments? It seems to me that the government is trying to devaluate the Baht to make exports more competitive, that is to increase Thailand's exports. Doesn't the above example seem contrary to those intentions??

Especially regarding a Trading company or Agent who can just as easily continue with business based on a different country.

[Arkady]

I've been trying to make sense of the amendments to the foreign business act which can be found at:

http://asialaw.tripod.com/database/foreign.html

Anyway, in the lists of permited business, List 3...

The business which Thai national are not yet ready to complete with foreigners:

.....(11) Broker or agent business, except:

...© Being broker or agent for trading, purchasing or distributing or seeking both domestic and foreign markets for selling domestically manufactured or imported goods in the manner of international business operations having the foreigners' minimum capital 100 million Baht or more.

1) As I understand this, if I am an agent promoting the export of Thai products and wish to own a majority of stock in my company after the amendment comes into place, I would need to increase the registered capital of my business to 100 million Baht or more?

2) If increased to 100 million Baht, what percentage of that amount needs to actually be invested? (20%, 0%)? I'm sure the tax implications of increasing registed capital to 100 million will be disastrous anyway if that's the case.

3) Doesn't it sound rather stupid that a foreign controlled company promoting Thai exports be punished under the amendments? It seems to me that the government is trying to devaluate the Baht to make exports more competitive, that is to increase Thailand's exports. Doesn't the above example seem contrary to those intentions??

Especially regarding a Trading company or Agent who can just as easily continue with business based on a different country.

I may be wrong but my interpretation of what they are trying to do here is reverse the provisions of the 1999 law which allowed large retailers with more than B100m capital like Tesco and Carrefour be foreign owned. This was expedient at the time because their local partners were unable or unwilling to put up any more capital and they would have shut down losing a lot of Thai jobs.

[tamaique]

Thanks for your reply Arkady. I think you're right I talked to my lawyers and was told things wouldn't change for me. Must be for the big fish then