Restrictions On Foreigners' Voting Rights Relaxed

[george]

Restrictions on foreigners' voting rights relaxed

BANGKOK: -- The Cabinet has relaxed the restrictions on foreigners' voting rights as well as extended the grace period in voting right adjustment.

At the meeting Tuesday, the Cabinet approved the proposed amendments to the Foreign Business Act: foreign voting rights in companies in Annex 3 can exceed 50 per cent while the grace period for voting rights in companies in Annexes 1 and 2 is extended from 2 years to 3 years.

Under the previous draft, any firm in which foreigners held 50 per cent or more of the shares, or 50 per cent or more of shareholders' voting rights, would be considered a foreign company, excluded from business activities reserved for Thais.

-- The Nation 2007-04-10

[monkeyofdoom]

Where can I see a list of types of businesses that belong to each Annex? Anyone?

[lannarebirth]

So, this is step one in unwinding the whole big fiasco. Probably served to get rid of some who were just barely hanging on here. looks like it's back to business as usual at some point in the future.

[BigSnake]

The old Carrot and Stick trick. They hit with the stick on 18 Dec 06, now the Carrot, or maybe it because the PM is take a little rest in Hospital

[Arkady]

I suppose this collection of decrepid buffoons feel that they still have to do something to save face, rather than do the obvious thing which was to shelve the whole embarrassing affair and leave it to the next government. This is still not going to get a warm reception from investors as it will cause problems for Annex 1 and 2 companies and the penalties will be increased for all 3 annexes. Increasingly, Thai business people who can see what is happening elsewhere in Asia are starting to realise how badly Thailand is losing out with its ridiculous foreign investment and land ownership laws. Today in the press the CEO of Amata, which has industrial estates both in Thailand and Vietnam was comparing his poor sales here with his booming sales in Vietnam. Unfortunately, the majority of the establishiment will cling on to protectionism as long as they can and ordinary Thais will be the losers.

[cclub75]

As usual poor reporting and/or stupid "apples/oranges" decision.

Let's recap.

The whole issue of FBA 2 is the new way to classify a company "thai" or "foreign".

-with FBA 1 : a company with more than 50% of shares owned by foreigners is a "foreign company". And then, restrictions apply for list 1, 2 and 3.

One of the problem is : list 3 (businesses where thais are not ready to compete) is way too large. You need to ask permission to some vague authorities on case by case basis. Plus you have other restrictions (the companies, because classified as "foreign", can't buy land) etc.

So, very logically and basically, all the foreigns entrepreneurs have bypassed since 30 years this stupid law, and created "thai" company, AKA normal company (with less than 50 % of foreign shareholders) and protected themselves, AKA their investments, with dual shares and thai nominees, to keep the control.

This is why, a part some exceptions (BOI, Amity Treaty...), there are NO "foreign" company in Thailand, as described by FBA.

-With FBA 2 : a company with more than 50% of shares and/or +50 % of voting rights is a "foreign company".

It's a total change, of course ! And absolutly not some minors corrections, as stated by the gvt.

It means : all companies, with foreigns shareholders, and actually controled by foreigners, would become "foreign companies".

Now the Cabinet tell us (or the bad journalists at Nation) :

-"grace period for voting rights in companies in Annexes 1 and 2 is extended from 2 years to 3 years."

Fair enough. Everybody can understand this point. Thank you very much.

-"foreign voting rights in companies in Annex 3 can exceed 50 per cent "

This last point, however, doesn't make any sense.

Because, it does not change the core issue : it's better to be a thai company, than a "foreign company".

Back to square one : the thai gvt thinks the foreign business community is dumb. Again they have to understand this very basic point in capitalism : if I put money, i want to keep the control on this money.

In a ridiculous dance of scalps (FBA 2 with 3 drafs and countless meetings), the thai gvt hopes to fool us. It's really pathetic. Therefore to write "Restrictions on foreigners' voting rights relaxed" is pure propaganda.

We should have no problem with restrictions on list 1 and 2 (national security, medias, telecoms, culture). Fair enough. All the countries have such restrictions.

But in 2007, how a responsible and intelligent gvt can make people believe that thais are not ready to compete in : running a restaurant, a hotel, advertising, retailing (as described in list 3 today) etc ?

And further more : you can prevent foreigners to take control on some strategic sectors... But there is no valid reason to have a dual system in one country : it means "thai" companies on one hand and "foreign" companies with less rights on the another hand.

This the core of the problem of FBA.

To understand FBA 2 (doc issued by thai authorities) :

http://www.dbd.go.th/eng/FBA%20Q&A%201...d%20%5B1%5D.pdf

Edited April 10, 2007 by cclub75

[Arkady]

Where can I see a list of types of businesses that belong to each Annex? Anyone?

A translation of the 1999 FBA is available here. http://www.samuiforsale.com/FBA-text.htm

[Choscura]

well put, cclub75

[CalicoConsulting]

My business is editing and/or proofreading English documents. I've been doing it for over 15 years. I don't think the Thais are ready to compete with me yet, but they are more than welcome to try.

[reddevil_06510]

I like the samui for sale url, very catchy.

The whole FBA issue is ridiculous, even this latest announcement is too little too late.

The Emperor's New Clothes..... wait we can't talk about that....

[Arkady]

-with FBA 1 : a company with more than 50% of shares owned by foreigners is a "foreign company". And then, restrictions apply for list 1, 2 and 3.

One of the problem is : list 3 (businesses where thais are not ready to compete) is way too large. You need to ask permission to some vague authorities on case by case basis. Plus you have other restrictions (the companies, because classified as "foreign", can't buy land) etc.

But in 2007, how a responsible and intelligent gvt can make people believe that thais are not ready to compete in : running a restaurant, a hotel, advertising, retailing (as described in list 3 today) etc ?

Actually the Land Code of 1999 has its own definition of a foreign company which one where foreigners own more than 49% of the share capital (it is 50% in the FBA) without reference to voting rights

Yes, it cries out for a clause that says, "Annex 3 is hereby deleted." Then they could tighten up restrictions on strategic sectors without much fuss being made. Let's dream on. We are still in Thailand.

[CalicoConsulting]

Samui For Sale is a catchy URL, but you can't print anything from there. You can find the same translation, however, at http://www.thailawforum.com/database1/foreign.html in a printable format. Good old Google recognized "has been pleasantly pleased to proclaim." True, you don't see that every day.

[Foggy Bottom]

And of course you're all forgetting the catch 22 of the FBA Annex 3

Many of the businesses permitted under Annex 3 are still prohibited under the Royal Decree from the 1970s.

The Royal Decree prohibits foreigners from engaging in professions / working as hairdressers, photographers, photographic ptrocessors, manual labour in relation to building trades or retail (including bars, restaurants and cafes), accountancy, architects, legal services including lbeing a lawyer or paralegal etc etc etc.

The FBA 1999 states those roles can be done with permission from the relevant government offices - but what happens when someone reports you for doing government-approved business that is contrary to the King's Decree, and you find yourself in court?

It's just way too dodgy to do anything that appears on both lists.

Find something to do that the Thai's have not written on any list. If you need ideas, go to the Foreign Office website for Burma. Anything the Thais prohibit for us, the Burmese allow, and vice versa.

Collusion? Possibly, but it's a good source document for ideas if you don't have any. But then again, so is a Yellow Pages - everything nicely categorised into business types.

Over the years, I've met way too many foreigners who read the FBA (and its predecessor the ABL) as being the ONLY types of business they were allowed to do, causing them to forget about all the other stuff that's not regulated.

;-)

[cclub75]

Now I think it's clear....

A very "relaxed" draft indeed.

New Foreign Business Act Proposes Prison Sentences for Violaters

Thailand threatens jail for foreign business violations

Sapa-AFP

BANGKOK - Violators of Thailand’s new foreign investment law could face up to five years in prison, under a revised version of the proposed amendments approved by the cabinet today.

The changes, originally proposed in January, would limit foreigners to holding no more than 49% of the shares or voting rights in Thai companies.

The original proposal would have punished violators with only a fine of up to 100,000 baht ($2,870) but the revised version raised the fine five-fold and also threatens five years in prison, according to Commerce Minister Krirk-Krai Jirapaet.

Companies would also have three years rather than two to adjust to the new regime, he said.

"The cabinet agreed to raise the penalty for violations both in fines and imprisonment. Those who violate the law would face five years in prison and fine of five times the amount in the earlier draft," he said.

"We added the criminal penalty in order to promote good corporate governance in the business sector," Krirk-Krai said. He said the draft would be submitted to parliament before Friday.

"I personally believe that the amendment will not affect foreign investment in Thailand or investor confidence because direct investment usually focuses on the rate of return and the investment opportunity," he said.

Edited April 10, 2007 by cclub75

[cclub75]

Actually, the report of AFP is not completly accurate.

FBA 1

fine : 100 000 to 1 million THB

prison : 3 years

FBA 2 first draft (the one adopted by Cabinet on 9 january 2007)

fine : 500 000 to 5 millions THB

prison : no change (3 years)

FBA 2 new draft adopted by Cabinet today (reported by AFP)

fine : 500 000 to 5 millions THB

prison : 5 years.

Anyway, we should say thank you to the Commerce minister : it's to promote "good governance".

[Gravelrash]

Well that cerainly makes me feel better, a 5 year jail sentence (sic) for employing Thais, paying taxes, and contributing to the economy...seems fair enough. Except of course if I have a majotity Thai share holding.

Question for the knowledgeable: I already have 49%, and a quorum of 50% is required to effect changed (my lawyer setup without asking me). Can I up that quorum to say 60%, so effectively I can set company policy now with fellow director agreemnet, and no-one can change it in the future without me agreeing?

Appreciate a response.

[freitag1]

I was about to open a Thai company in the next 6 month. Well, this is the kind of news that finally changes my mind. I'm tired of all all this. One day this the next day this. They make up a weird investment rule, the markets crash and the next day they more or less say sorry they didnt mean it. What's up with this government.

I'll open my new business in Hong Kong and for sure not in Thailand.

[birago23]

I was about to open a Thai company in the next 6 month. Well, this is the kind of news that finally changes my mind. I'm tired of all all this. One day this the next day this. They make up a weird investment rule, the markets crash and the next day they more or less say sorry they didnt mean it. What's up with this government.

I'll open my new business in Hong Kong and for sure not in Thailand.

Let's see how long this government stays in power....and if the new one will make even more stupid laws...now they managed to get crash down Thailands economy already...but surely more idiotic laws can be found to scare away all foreign investors...

If I would leave some money on my Thai bank account? Not one baht. Invest in Thailand under this Mickey Mouse rule? LOL

[suthnuh]

Actually, the report of AFP is not completly accurate.

FBA 1

fine : 100 000 to 1 million THB

prison : 3 years

FBA 2 first draft (the one adopted by Cabinet on 9 january 2007)

fine : 500 000 to 5 millions THB

prison : no change (3 years)

FBA 2 new draft adopted by Cabinet today (reported by AFP)

fine : 500 000 to 5 millions THB

prison : 5 years.

Anyway, we should say thank you to the Commerce minister : it's to promote "good governance".

"Good Governance"!!! I suppose by that his honorable self means yet another way for he and the rest of the geriatrics to insinuate themselves into the board rooms of non-BOI priviledged multinational corps who incorporate a legal entity in Thailand?

Can you imagine companies like Ford, Daimler-Chrysler, Toyota, GM, Emerson, etc. giving up control of their company reputations to the likes of some of these glorified con-artists? Good governance my arse!

[george]

Update:

Cabinet okays Business Act amendments

New rules for foreign business still have to clear National Assembly

BANGKOK: -- The Cabinet yesterday approved the revised amendments to the Foreign Business Act, but it remains uncertain whether the bill will pass the National Legislative Assembly.

The assembly will debate the amendments on April 18. Some 50 of its members have been up in arms against the changes, saying they jeopardise foreign investment.

Commerce Minister Krirk-Krai Jirapaet said he was ready to bring the amendments to the assembly.

The Cabinet approved the new draft of the Foreign Business Law after the Commerce Ministry agreed to revise it to make it friendlier to foreign investment. An earlier draft submitted for Cabinet approval in February was rejected.

There are six key amendments.

First, the new draft will focus on the voting rights of foreign shareholders. If a company is 49 per cent foreign owned but foreigners hold more than 50 per cent of its voting rights the company will be defined as a foreign one.

Second, it will take out more businesses covered under Annex III. This will allow these businesses, such as insurance and non-commodity futures market, to be covered by specific laws.

Third, the new draft will remove the amnesty for those violating the nominee law.

Fourth, the draft will increase the penalty for those violating the Foreign Business Law - from three to five years in jail, and from Bt100,000 to Bt1 million in fines to Bt500,000 to Bt5 million.

Fifth, it will expand the period from two to three years for foreign companies operating in Annex I and Annex II to revise their ownership structure to conform to the new law. Moreover, foreign companies in Annex III must inform the Commerce Ministry within one year that they have foreign ownership status before continuing to operate as normal.

Sixth, a 17-member committee will be formed to rule whether a company is Thai or foreign owned in case of a dispute.

The Commerce Ministry says the amendments create more transparency by clearly defining foreign ownership and delineating the types of businesses that are open to foreigners.

It is also aiming to make it clear once and for all that using nominees to circumvent foreign-ownership caps is prohibited.

The draft is a compromise between an earlier version from the Commerce Ministry and those of the Council of State and the assembly.

The assembly can reject it and introduce its own for a vote.

However, the Commerce Ministry insists that its draft is better than those from the assembly and the Council of State.

The ministry's new draft takes into account key concerns raised by the Cabinet and the foreign business community, said Skol Harnsuthivarin, secretary to Krirk-Krai.

The draft maintains the clause on voting rights, which is a major concern of the Thai government.

However, the draft will not focus on management control as the Council of State suggested, as the government considers that it would be too stringent for foreign investors, Skol said.

The new draft removes the amnesty clause because it would like to create fairness for Kularb Keaw, now under police investigation over allegations it acted as nominee for Singapore's Temasek Holdings in the Shin Corp takeover.

Another 14 companies are also facing a complaint that they might have used nominees to circumvent the foreign business law. They are now being investigated by the Commerce Ministry.

Pramon Suthivong, chairman of the Board of Trade of Thailand and Thai Chamber of Commerce, said most businesses affected would find the latest draft more satisfying but there would be some who might be unhappy with it.

"It is impossible to satisfy all parties, particularly foreign investors. But since it is necessary to amend the law, the government has to go ahead and do it" Pramon said.

Asked about the impact of the new draft on foreign investors' confidence, Pramon said he believed they would not withdraw from the Kingdom. All existing businesses will be able to operate freely under the new draft, but new ones might need time to study it more closely, he said.

Board of Trade deputy secretary-general Pornsilp Patcharintanakul said the private sector was delighted with the government's move to put all companies on an equal footing.

Keisuke Matsumoto, secretary-general of the Japanese Chamber of Commerce in Bangkok, said Japanese investors were still concerned about voting rights as the change would force many to restructure their companies.

However, Keisuke said Japanese investors expected the government to become more flexible and hold discussions with them before implementing the new rules.

-- The Nation 2007-04-11

[cclub75]

Okay more details start to come out. It's important to say that at that point nothing is done.

There are six key amendments.

First, the new draft will focus on the voting rights of foreign shareholders. If a company is 49 per cent foreign owned but foreigners hold more than 50 per cent of its voting rights the company will be defined as a foreign one.

Second, it will take out more businesses covered under Annex III. This will allow these businesses, such as insurance and non-commodity futures market, to be covered by specific laws.

Easy tactic : you remove some items, some of them very, very specific in the financial field (futures market !), so you can say "I ease". And after you write another law to "tighten".

Third, the new draft will remove the amnesty for those violating the nominee law.

Fourth, the draft will increase the penalty for those violating the Foreign Business Law - from three to five years in jail, and from Bt100,000 to Bt1 million in fines to Bt500,000 to Bt5 million.

Point 3 and 4... Is that what they call a "friendler" approach ?!

Fifth, it will expand the period from two to three years for foreign companies operating in Annex I and Annex II to revise their ownership structure to conform to the new law. Moreover, foreign companies in Annex III must inform the Commerce Ministry within one year that they have foreign ownership status before continuing to operate as normal.

One year more for a few big companies that operate in List 1 and 2. Great. And a big trap for all the other : "come to me baby, I will not harm you. It's just a formality".

You can be sure that once the Commerce Ministry will have its database of companies, that basically have bypassed the law before, it will use it for other amendements. That's the trap.

Sixth, a 17-member committee will be formed to rule whether a company is Thai or foreign owned in case of a dispute.

This article was specifically designed to please the NLA members who have presented the famous draft number 3 (or 2 I don't remember). Basically, they proposed that a "committee" would rule, on a case by case basis, if the company was "thai" or "foreign" ! Of course, this idea was totally insane and unpracticable.

Therefore, to save face, the Cabinet proposes now a "committee" in case of... dispute... It's pathetic

It is also aiming to make it clear once and for all that using nominees to circumvent foreign-ownership caps is prohibited.

The use of nominees has fueled the thai economy for the last 30 years. Using nominees was not a choice from foreign investors and entrepreneurs. It was the only way to bypass this insane law that created 2 differents regimes for conducting businesse on the same soil (companies "thai" and companies "foreign", with less rights, restrictions, and more red tape).

If the thai authorities want... really... to stop that, then it's more than shooting in their feet. It's the end of business developpment in Thailand. Not more, not less.

Again : they don't seem to understand that an investor want to keep control over the money he puts on the table.

They are so naive and arrogant that they seem to truely believe that foreigners are going to invest, create businesses in Thailand, and then give... the control locally to thais !

They should understand that if it's easy to scam a tourist and ask him to pay 400 THB to visit natural park because he's foreigner... the foreign business community is much more aware. Money comes and goes. Other countries in SEA open up.

However, the Commerce Ministry insists that its draft is better than those from the assembly and the Council of State.

Lie. Basically, the core remains exactly the same.

The ministry's new draft takes into account key concerns raised by the Cabinet and the foreign business community, said Skol Harnsuthivarin, secretary to Krirk-Krai.

Lie. They continue to push forward, without listening to the real concerns of foreign business community.

It's important to note that we saw since november some rather strong comments and reactions from the foreigners (even on the diplomatic level). It's unprecedent. That's a sign that this issue is really serious. Thai authorities don't want to listen. Too bad for them.

The new draft removes the amnesty clause because it would like to create fairness for Kularb Keaw, now under police investigation over allegations it acted as nominee for Singapore's Temasek Holdings in the Shin Corp takeover.

Again... vapors and smoke. The Shin scandal is a diversion. Temasek has violated specific laws (like Telecom Act and Transportation Act with Air Asia). It would be very easy to nail them on the Shin deal. With a real will. Since one year, thai authorities are talking about the gender of angels and are working very, very hard to say if Temasek used or not, thai nominees. It's so funny.

But to say after : "we are very sorry, mak, mak we need to change totally the law for all the businesses because of big Shin scandal" is an insult to our intelligence.

Asked about the impact of the new draft on foreign investors' confidence, Pramon said he believed they would not withdraw from the Kingdom. All existing businesses will be able to operate freely under the new draft, but new ones might need time to study it more closely, he said.

I bet they will "study it more closely". So closely, that they will divert their investments to other countries !

As for the exisiting businesses, use the word "operate freely" again it's an insult to common sense.

Board of Trade deputy secretary-general Pornsilp Patcharintanakul said the private sector was delighted with the government's move to put all companies on an equal footing.

I bet they are delighted ! Less competition, more protection, easy money for them. And to use the word "equal footing" is amazing, even by thai standards.

FBA is everything but an equal footing. It is a discriminatory law, by essence !

Edited April 10, 2007 by cclub75

[Arkady]

Actually, the report of AFP is not completly accurate.

FBA 1

fine : 100 000 to 1 million THB

prison : 3 years

FBA 2 first draft (the one adopted by Cabinet on 9 january 2007)

fine : 500 000 to 5 millions THB

prison : no change (3 years)

FBA 2 new draft adopted by Cabinet today (reported by AFP)

fine : 500 000 to 5 millions THB

prison : 5 years.

Anyway, we should say thank you to the Commerce minister : it's to promote "good governance".

The increase in the penalties came from the NLA's draft. So, no doubt they have no problem approving it. Whatever happened to lil ol' Kularb Kaew? The police seem to have lost the file because too many influential people are connected with it.

[ChiangMaiAmerican]

I wonder what will happen when other countries retaliate by closing their markets to Thai businesses, goods and services. If the US market alone were only mild to moderately restricted Thailand would go under. In fact trade with the US floats much of Thailand's deficits with other countries. The EU appears to be none too pleased with the current situation here. Whether they will act beyond voicing a complaint is anyones guess. The US has voiced its disapproval along with the representatives of a number of other countries. In the past 24 hours the odds of the US acting more assertively in trade disputes just increased significantly. No one expected this would actually happen. See the headlines and the link below. Included in the complaints is one on trade barriers and market access. Thailand expects the US to ignore its behavior too. It will be interesting to see what happens here when the USTR issues the latest report on Foreign Trade Barriers due out this month.

U.S. to step up piracy battle

It plans to file formal trade complaints against China over the country's lack of enforcement.

Schwab announced that the United States would file two requests today for "dispute settlement consultations" with China through the WTO. One request asserts that China has failed to adequately protect copyrights and trademarks on intellectual property; the other says China has maintained unfair trade barriers against U.S. companies trying to sell those products legally in China.

http://www.latimes.com/entertainment/news/business/la-fi-wto10apr10,0,2243480.story?coll=la-home-entertainment

[Arkady]

I wonder what will happen when other countries retaliate by closing their markets to Thai businesses, goods and services. If the US market alone were only mild to moderately restricted Thailand would go under. In fact trade with the US floats much of Thailand's deficits with other countries. The EU appears to be none too pleased with the current situation here. Whether they will act beyond voicing a complaint is anyones guess. The US has voiced its disapproval along with the representatives of a number of other countries. In the past 24 hours the odds of the US acting more assertively in trade disputes just increased significantly. No one expected this would actually happen. See the headlines and the link below. Included in the complaints is one on trade barriers and market access. Thailand expects the US to ignore its behavior too. It will be interesting to see what happens here when the USTR issues the latest report on Foreign Trade Barriers due out this month.

U.S. to step up piracy battle

It plans to file formal trade complaints against China over the country's lack of enforcement.

Schwab announced that the United States would file two requests today for "dispute settlement consultations" with China through the WTO. One request asserts that China has failed to adequately protect copyrights and trademarks on intellectual property; the other says China has maintained unfair trade barriers against U.S. companies trying to sell those products legally in China.

http://www.latimes.com/entertainment/news/business/la-fi-wto10apr10,0,2243480.story?coll=la-home-entertainment

The US will do anything about the FBA because they still have their treaty which means the FBA hardly applies to them. They just want financial services to be freed up (not covered by the treaty) as they insisted on in their FTA negotiations. It is down to the EU and Japan. The latter has meekly signed an FTA with Thailand without demanding access for services. That leaves the EU which is not know for taking a stern line over access for services like the US.

Reading the latest version of The Nation's article it is obvious that nothing has been relaxed except the extra year given for Annex 1 & 2 companies to get rid of their excess voting rights. Futures and insurance are already covered by their own laws and shouldn't have been in there in the first place. (Several foreign firms already hold financial futures licences.) If this is past, I suspect that foreign firms that went along with nominee structures proposed by their lawyers as perfectly legal will now avoid new investments in Thailand, rather than subject their staff to the risk of prison sentences. Individual foreign businessmen may opt to do it 100% through the Thai wife or girlfriend, which makes it much harder to detect, or, much more likely, not to start a Thai business at all and leave their money in the bank or invested in their home country.

[womble]

Okay more details start to come out. It's important to say that at that point nothing is done.

There are six key amendments.

First, the new draft will focus on the voting rights of foreign shareholders. If a company is 49 per cent foreign owned but foreigners hold more than 50 per cent of its voting rights the company will be defined as a foreign one.

Second, it will take out more businesses covered under Annex III. This will allow these businesses, such as insurance and non-commodity futures market, to be covered by specific laws.

Easy tactic : you remove some items, some of them very, very specific in the financial field (futures market !), so you can say "I ease". And after you write another law to "tighten".

Third, the new draft will remove the amnesty for those violating the nominee law.

Fourth, the draft will increase the penalty for those violating the Foreign Business Law - from three to five years in jail, and from Bt100,000 to Bt1 million in fines to Bt500,000 to Bt5 million.

Point 3 and 4... Is that what they call a "friendler" approach ?!

Fifth, it will expand the period from two to three years for foreign companies operating in Annex I and Annex II to revise their ownership structure to conform to the new law. Moreover, foreign companies in Annex III must inform the Commerce Ministry within one year that they have foreign ownership status before continuing to operate as normal.

One year more for a few big companies that operate in List 1 and 2. Great. And a big trap for all the other : "come to me baby, I will not harm you. It's just a formality".

You can be sure that once the Commerce Ministry will have its database of companies, that basically have bypassed the law before, it will use it for other amendements. That's the trap.

Sixth, a 17-member committee will be formed to rule whether a company is Thai or foreign owned in case of a dispute.

This article was specifically designed to please the NLA members who have presented the famous draft number 3 (or 2 I don't remember). Basically, they proposed that a "committee" would rule, on a case by case basis, if the company was "thai" or "foreign" ! Of course, this idea was totally insane and unpracticable.

Therefore, to save face, the Cabinet proposes now a "committee" in case of... dispute... It's pathetic

It is also aiming to make it clear once and for all that using nominees to circumvent foreign-ownership caps is prohibited.

The use of nominees has fueled the thai economy for the last 30 years. Using nominees was not a choice from foreign investors and entrepreneurs. It was the only way to bypass this insane law that created 2 differents regimes for conducting businesse on the same soil (companies "thai" and companies "foreign", with less rights, restrictions, and more red tape).

If the thai authorities want... really... to stop that, then it's more than shooting in their feet. It's the end of business developpment in Thailand. Not more, not less.

Again : they don't seem to understand that an investor want to keep control over the money he puts on the table.

They are so naive and arrogant that they seem to truely believe that foreigners are going to invest, create businesses in Thailand, and then give... the control locally to thais !

They should understand that if it's easy to scam a tourist and ask him to pay 400 THB to visit natural park because he's foreigner... the foreign business community is much more aware. Money comes and goes. Other countries in SEA open up.

However, the Commerce Ministry insists that its draft is better than those from the assembly and the Council of State.

Lie. Basically, the core remains exactly the same.

The ministry's new draft takes into account key concerns raised by the Cabinet and the foreign business community, said Skol Harnsuthivarin, secretary to Krirk-Krai.

Lie. They continue to push forward, without listening to the real concerns of foreign business community.

It's important to note that we saw since november some rather strong comments and reactions from the foreigners (even on the diplomatic level). It's unprecedent. That's a sign that this issue is really serious. Thai authorities don't want to listen. Too bad for them.

The new draft removes the amnesty clause because it would like to create fairness for Kularb Keaw, now under police investigation over allegations it acted as nominee for Singapore's Temasek Holdings in the Shin Corp takeover.

Again... vapors and smoke. The Shin scandal is a diversion. Temasek has violated specific laws (like Telecom Act and Transportation Act with Air Asia). It would be very easy to nail them on the Shin deal. With a real will. Since one year, thai authorities are talking about the gender of angels and are working very, very hard to say if Temasek used or not, thai nominees. It's so funny.

But to say after : "we are very sorry, mak, mak we need to change totally the law for all the businesses because of big Shin scandal" is an insult to our intelligence.

Asked about the impact of the new draft on foreign investors' confidence, Pramon said he believed they would not withdraw from the Kingdom. All existing businesses will be able to operate freely under the new draft, but new ones might need time to study it more closely, he said.

I bet they will "study it more closely". So closely, that they will divert their investments to other countries !

As for the exisiting businesses, use the word "operate freely" again it's an insult to common sense.

Board of Trade deputy secretary-general Pornsilp Patcharintanakul said the private sector was delighted with the government's move to put all companies on an equal footing.

I bet they are delighted ! Less competition, more protection, easy money for them. And to use the word "equal footing" is amazing, even by thai standards.

FBA is everything but an equal footing. It is a discriminatory law, by essence !

Excellant Post!

One thing though.......

They continue to push ahead with these changes simply to protect their own businesses. The international business community here in Thailand knows that and I believe Us government departments and european departments are also aware of that.

If they do push on with this they will be in breach of WTO commitments, as much as they want to do this I don't think they actually can.

Although they are too stupid to realise it.

Or are they.....

I expect the Thai futures market had a busy day today before this news was released.....

Edited April 10, 2007 by womble

[thaigene2]

[

"Good Governance"!!! I suppose by that his honorable self means yet another way for he and the rest of the geriatrics to insinuate themselves into the board rooms of non-BOI priviledged multinational corps who incorporate a legal entity in Thailand?

Did anyone ever serious believe this little dance was about anything else? The trap has ben there for years - they finally sprung it that's all. You cannot do biz in Thailand without giving your money to the establishment. Pure and simple.

[punisher]

Restrictions on foreigners' voting rights relaxed

BANGKOK: -- The Cabinet has relaxed the restrictions on foreigners' voting rights as well as extended the grace period in voting right adjustment.

At the meeting Tuesday, the Cabinet approved the proposed amendments to the Foreign Business Act: foreign voting rights in companies in Annex 3 can exceed 50 per cent while the grace period for voting rights in companies in Annexes 1 and 2 is extended from 2 years to 3 years.

Under the previous draft, any firm in which foreigners held 50 per cent or more of the shares, or 50 per cent or more of shareholders' voting rights, would be considered a foreign company, excluded from business activities reserved for Thais.

-- The Nation 2007-04-10

very good,change the rules everyday,I am sure investors will like that!!!!

[ThaiGoon]

Restrictions on foreigners' voting rights relaxed

BANGKOK: -- The Cabinet has relaxed the restrictions on foreigners' voting rights as well as extended the grace period in voting right adjustment.

At the meeting Tuesday, the Cabinet approved the proposed amendments to the Foreign Business Act: foreign voting rights in companies in Annex 3 can exceed 50 per cent while the grace period for voting rights in companies in Annexes 1 and 2 is extended from 2 years to 3 years.

Under the previous draft, any firm in which foreigners held 50 per cent or more of the shares, or 50 per cent or more of shareholders' voting rights, would be considered a foreign company, excluded from business activities reserved for Thais.

-- The Nation 2007-04-10

very good,change the rules everyday,I am sure investors will like that!!!!

They changed the rules every day? Really? I thought this amendment has never even been passed as a law. It's all still been in the process of revision and getting apporved. And it's still not even certain if this revised one will get passed after the legislative assembly has looked at it. They changed the rules every day?

[ThaiGoon]

http://www.bangkokpost.com/Business/11Apr2007_biz35.php

Cabinet exempts telecoms, retail, hotel businesses from FBA

Critically, the cabinet yesterday exempted businesses in the telecommunications, retail and hotel sectors from the FBA rules, under the principle that these businesses operated under their own separate laws.

List 1 represents businesses banned to foreigners, including media and rice farming. List 2 sectors, which include firearms production and transport, are restricted for national security reasons, while List 3 covers most service sectors.

Pramon Sutivong, the chairman of the Thai Chamber of Commerce, cautioned that the latest changes did not necessarily represent the final version of the final law, as the National Legislative Assembly was likely to set up a separate panel to consider the draft.

[Crash999]

They changed the rules every day? Really? I thought this amendment has never even been passed as a law. It's all still been in the process of revision and getting apporved. And it's still not even certain if this revised one will get passed after the legislative assembly has looked at it. They changed the rules every day?

It's not law but it might as well be considering the impact it has had on the property market. What is needed is stability and transparency, neither of which are apparent right now.