Thailand 'plans' To Ease Restrictions On Foreign Investment

[xbusman]

Great post poldebal, balanced and reasoned, nicely done!

[HYENA]

As long as there is corruption, nothing is safe in Thailand and any other country wishing for solid legitimacy. I would never trust my life savings given on a whim of a bribed official, police or overthrown government guarantees instability. No one will ever trust a country where the only guarantee is the buck stops nowhere...it keeps on going and influences whoever it wants.

How can anyone trust a non democratic country? Overthrown governments and revised constitutions are the only constant in a country that claims it is free (nice ad campaign but that's about it). The culture thinks it's conservative where its capital is renowned to all of the world for sleeze and an astounding HIV problem going unchecked...Thailand is a guarantee for double standards and guaranteed poverty from what I've seen. Only the corrupt are becoming/are already wealthy...the rest have to pay off the corrupt.

Come on...the word police in Thailand is equal to legal mafia. You're even allowed to murder in Thailand if you have the right connections (and are a Thai citizen). It's sad but luckily a few are able to escape.

Stop the corruption and you'll have stability (but that'll never happen).

Edited August 25, 2008 by HYENA

[Jingjok]

The terms developed and undeveloped countries are no longer valid ...

... But one thing is sure: since I live in Thailand, I do not have have any feelings of guilt about development anymore. That at least is a very positive result.

Indeed. An erudite post, Poldebol.

... There is nothing wrong with being positive, and setting goals. Perhaps they should concentrate on becoming the hub of something?

The hub of hubris (misplaced) perhaps?

[Seneque]

just do it (if you can)... dont talk about it

[calmichael]

Good move in light of the economy.

But.... what's to stop them from changing their minds if/when the economy recovers?

Something I am sure investors will consider given the past...

Exactly...

It takes a lot more than 3 fancy paragraphs to convince a potential foreign investor that they should invest in Thailand instead of Malaysia, Philippines or even China.

This is one of many desperate attempts to soften the impact of the global economy crisis that has yet to hit South East Asia with full impact.

I agree 100%. I believe that emerging nations like Thailand will get hit very very hard next year. They don't have quite the economic momentum needed to make it through a recession unscathed. At this (pre-worldwide recession) time, there is absolutely no compelling reason to invest in Thailand over any of the other Asian economies. There are many better places to invest than Thailand. That is - of course -unless you want to establish yourself permanently here. Then, it's more of a lifestyle choice than an economic one.

Does anyone know what the tourist hotel occupancy (booking) rates are looking like for the upcoming high season?

[Pierrot]

They won't be around long enough to see this through. When the others guys get back into power - the old-family establishment group backing the PAD - a group less friendly to foreign investment - it will probably get more restrictive. I wouldn't be sold by this rhetoric either.

Thailand needs a complete overhaul to international business standards, but that is contrary to the established commercial and military establishment families' interests here. In other words, it simply isn't going to happen any time soon.

Don't agree, people involved in big business, and Thaksin is one of them, know they have no choice. Who can think the PPP could be in power if they were only supported by uneducated villagers as some want us to believe.

But agree the "old order" doesn't like it. A lot of their privilege will disappear when international rules will apply here too.

As someone pointed out, we have seen so many governments following each other and unable to achieve anything until ... And it will take a strong government to be able to open the Thai economy.

It's probably one of the reasons why things are turning so ugly with Thaksin.

[FM505]

I believe that there were also plans to make it a hub of fashion. Current plans also envision a hub of the film industry, and music.

The film industry 'hub thing' has been dubbed fatally flawed by some very serious and noteworthy film makers... (name dropping omitted). Attempts to set up a substantial industry base here through the proper channels while meeting and adhering to gov't 'regulations' (within these past 3-5 years) met with sinister results... The foreign investors stepped back from this area and will likely pass on future opportunities.

Perhaps they should concentrate on becoming the hub of something?

Certainly this would be a precedent...

Thailand 'plans' to ease restrictions on foreign investment

Chaiya plans early easing of foreign investment restrictions

BANGKOK: -- Foreign businessmen should soon find it easier to invest in Thailand, as the Commerce Ministry is planning amendment of the protected sectors listed in Annexes I, II and III of the Foreign Business Act (FBA).

Commerce Minister Chaiya Sasomsap last week said he would soon ask the Cabinet to approve the setting up of a committee to consider amendment of the FBA, as a way to increase confidence among foreign investors amid the continuing political uncertainty.

The ministry plans to revise the business types listed in Annexes I to III - the list of protected businesses under the Act - by removing some businesses in which Thailand is deemed ready to compete with foreign investors.

"The ministry will also hold discussions with other agencies to ensure that, this time, amendment will create fair conditions for both Thai and foreign businessmen," said Chaiya.

However, the ministry will still reserve some business sectors for Thais if it finds there are still major concerns over low competitiveness in particular industries.

The amendments should make the Act more concise and flexible for foreign investors, enabling them to keep up the momentum of foreign investment in Thailand, Chaiya said.

The minister said there would, however, be no change in the definition of "foreign investors", who can hold no more than 50 per cent of the shares in firms in business listed in Annexes I to III unless they receive permission to do so from the FBA subcommittee.

The ministry will not introduce the concepts of "controlling voting rights" or "management control" for foreign shareholders, as such a move would destroy investor sentiment.

Last year, the National Legislative Assembly voted to tighten the scope of foreign business operations by expanding the definition of "management" and "voting rights" from simply the control by foreign shareholders of a company, as in the original Foreign Business Act of 1999. The final version of the definition was not, however, made public after the end of the assembly's term early this year.

Businesses listed in Annex III are expected to become more flexible towards foreign investment under the latest proposed changes. These include rice milling, fisheries, forestry, accountancy services, service businesses, legal services, agriculture, engineering, leasing, advertising agencies and retail and wholesale.

Chaiya said the panel that would consider amendment of the Act was expected to complete its task by the end of the year, to ensure that the new conditions can take effect next year - and that foreign direct investment will be stimulated as a result.

-- The Nation 2008-08-25

A clear case of "hubbism".

Since I come regularly to Thailand, there have been plans for Thailand to become

the hub of international tourism

the hub of international airfreight

the hub of international health care

the hub of South East Asian education

the hub of South East Asian finance

Happy hubbing!

[Naam]

You are however correct in saying that countries like the EU and the US have more profit from aid than the receiving countries. Combine that with the fact that the annual amount of money sent back to the families by migrant workers in the EU and US surpasses any amount of aid, and, in most cases, is used more sufficiently. (I do not dare t calculate how much individual farangs bring into LOS every year) At the moment there is only one solution to the aid question: stop it. Is it not crazy that Europe gives aid to e.g. India in the form of educational projects whereas India refuses to solve the problem of their 300 million starving citizens, in order to keep the salaries low?

right you are! the bloody indian government should just flip the switch "more salaries to 300 million citizens". if they keep on refusing let's invoke the UN security council which will first apply sanctions and if there is no compliance cruise missiles and smart bombs will fall on Delhi.

p.s. from what far away planet do you hail honourable and learned Sir?

[sangfroid]

Good move in light of the economy.

But.... what's to stop them from changing their minds if/when the economy recovers?

Something I am sure investors will consider given the past...

Yes, they are doing it because the economy is weak. when things pick up again they'll shaft the foreign investors yet again.

[Seizhin]

Again, there's always good thing and bad thing.

Rice milling? Agriculture?

Pretty sure it'll be good if it's considered correctly to stimulate the economy, but if it's done wrongly, they'll just be opening more wound for the wasteland that we all live in.

[Considered Opinion]

Same same but different. Want a suggestion about something that makes sense to invest in Thailand, I recommend nothing over 8" in length, wet to your satisfaction and charged at 1000 Bt a time.

[huggybear]

Good move in light of the economy.

But.... what's to stop them from changing their minds if/when the economy recovers?

Something I am sure investors will consider given the past...

Surely they would make some iron clad rullings that would never be subject to change, much like the constitution.

Ha! You missed your calling, you should be a comedian.

[huggybear]

Good move in light of the economy.

But.... what's to stop them from changing their minds if/when the economy recovers?

Something I am sure investors will consider given the past...

Surely they would make some iron clad rullings that would never be subject to change, much like the constitution.

Ha! You missed your calling, you should be a comedian.

[dreamtime]

As long as there is corruption, nothing is safe in Thailand and any other country wishing for solid legitimacy. I would never trust my life savings given on a whim of a bribed official, police or overthrown government guarantees instability. No one will ever trust a country where the only guarantee is the buck stops nowhere...it keeps on going and influences whoever it wants.

How can anyone trust a non democratic country? Overthrown governments and revised constitutions are the only constant in a country that claims it is free (nice ad campaign but that's about it). The culture thinks it's conservative where its capital is renowned to all of the world for sleeze and an astounding HIV problem going unchecked...Thailand is a guarantee for double standards and guaranteed poverty from what I've seen. Only the corrupt are becoming/are already wealthy...the rest have to pay off the corrupt.

Come on...the word police in Thailand is equal to legal mafia. You're even allowed to murder in Thailand if you have the right connections (and are a Thai citizen). It's sad but luckily a few are able to escape.

Stop the corruption and you'll have stability (but that'll never happen).

Corruption is the only thing they know. Just as a western farang, on average, knows nothing about corruption and how to work it. You cannot expect them to change in this generation or even the next. Honesty, integrity? These words and concepts don't exist here.

[dreamtime]

As long as there is corruption, nothing is safe in Thailand and any other country wishing for solid legitimacy. I would never trust my life savings given on a whim of a bribed official, police or overthrown government guarantees instability. No one will ever trust a country where the only guarantee is the buck stops nowhere...it keeps on going and influences whoever it wants.

How can anyone trust a non democratic country? Overthrown governments and revised constitutions are the only constant in a country that claims it is free (nice ad campaign but that's about it). The culture thinks it's conservative where its capital is renowned to all of the world for sleeze and an astounding HIV problem going unchecked...Thailand is a guarantee for double standards and guaranteed poverty from what I've seen. Only the corrupt are becoming/are already wealthy...the rest have to pay off the corrupt.

Come on...the word police in Thailand is equal to legal mafia. You're even allowed to murder in Thailand if you have the right connections (and are a Thai citizen). It's sad but luckily a few are able to escape.

This is a scary point. In Western countries most people are afraid of committing murder because there is an inner feeling that it is not a correct thing to do or they might get caught and that stops many people from doing it. In Thailand, beneath the smiles and laid back persona of people exists extremely unstable beings. Get one agitated or pissed off and all inner defense mechanisms of right and wrong go out the window. Its really ridiculous. The point being is never get in a fight with a Thai or get one pissed off at you for any reason. Its not worth the risk.

Edited August 25, 2008 by dreamtime

[yoshiwara]

New investment decisions are not made on the back of 'mood music', but it might hope to slow down disinvestment to a 'wait and see' level. Given the uneasy political situation, the announcement will be testing the waters see if there is any concerted resistance level to the proposals.

[Plus]

They are talking about relaxing rules while everyone else waits until they invest in mega projects to jump start the economy. However this government is incapable of doing that, and domestic investment has been shrinking. So now they turn to foreigners, they haven't screwed them up for a while, there must be plenty of new greenhorns there.

And Thaigene, look who's made the announcement - our good old Chaya who demanded that his previous Health Care Minister post be handed to his brother, that's as close to old family establishement as it gets.

Yeah, that's the guy who is all for openness and fairness.

You are only kidding yourself.

[Thai at Heart]

They are talking about relaxing rules while everyone else waits until they invest in mega projects to jump start the economy. However this government is incapable of doing that, and domestic investment has been shrinking. So now they turn to foreigners, they haven't screwed them up for a while, there must be plenty of new greenhorns there.

And Thaigene, look who's made the announcement - our good old Chaya who demanded that his previous Health Care Minister post be handed to his brother, that's as close to old family establishement as it gets.

Yeah, that's the guy who is all for openness and fairness.

You are only kidding yourself.

No one making a serious investment decision is going to have their decision making changed by this. It will take a concrete, believable, tested policy for serious investment to pick up. How long since a Thai govt made a policy like that?

[dreamtime]

They are talking about relaxing rules while everyone else waits until they invest in mega projects to jump start the economy. However this government is incapable of doing that, and domestic investment has been shrinking. So now they turn to foreigners, they haven't screwed them up for a while, there must be plenty of new greenhorns there.

And Thaigene, look who's made the announcement - our good old Chaya who demanded that his previous Health Care Minister post be handed to his brother, that's as close to old family establishement as it gets.

Yeah, that's the guy who is all for openness and fairness.

You are only kidding yourself.

What's hilarious is these people have no idea how ridiculous they look to farang. But do they even care? I doubt it. They just sit back and collect their siphoned money, which is the only way they can earn it since they are so incompetent - they couldn't hold a job at Mcdonalds, and buy $50k BMW's for $250k at Siam Paragon. What a wacked out place

Edited August 25, 2008 by dreamtime

[Thai at Heart]

They are talking about relaxing rules while everyone else waits until they invest in mega projects to jump start the economy. However this government is incapable of doing that, and domestic investment has been shrinking. So now they turn to foreigners, they haven't screwed them up for a while, there must be plenty of new greenhorns there.

And Thaigene, look who's made the announcement - our good old Chaya who demanded that his previous Health Care Minister post be handed to his brother, that's as close to old family establishement as it gets.

Yeah, that's the guy who is all for openness and fairness.

You are only kidding yourself.

What's hilarious is these people have no idea how ridiculous they look to farang. But do they even care? I doubt it. They just sit back and collect their siphoned money, which is the only way they can earn it since they are so incompetent - they couldn't hold a job at Mcdonalds, and buy $50k BMW's for $250k at Siam Paragon. What a wacked out place

Well 51% for not providing much is a pretty big whack. That's why a lot of companies don't invest here.

[dreamtime]

They are talking about relaxing rules while everyone else waits until they invest in mega projects to jump start the economy. However this government is incapable of doing that, and domestic investment has been shrinking. So now they turn to foreigners, they haven't screwed them up for a while, there must be plenty of new greenhorns there.

And Thaigene, look who's made the announcement - our good old Chaya who demanded that his previous Health Care Minister post be handed to his brother, that's as close to old family establishement as it gets.

Yeah, that's the guy who is all for openness and fairness.

You are only kidding yourself.

What's hilarious is these people have no idea how ridiculous they look to farang. But do they even care? I doubt it. They just sit back and collect their siphoned money, which is the only way they can earn it since they are so incompetent - they couldn't hold a job at Mcdonalds, and buy $50k BMW's for $250k at Siam Paragon. What a wacked out place

Well 51% for not providing much is a pretty big whack. That's why a lot of companies don't invest here.

If you buy a BMW in eastern europe it costs you 30% more than if you buy in Germany. Fine. If you buy the same BMW in Thailand it costs you a multiple. Not just double. But triple and quadruple. The people making these laws must be smoking something or on too many prescription drugs. Talk about protectionism. What do they think, a Thai is going to make a car better than BMW? Or maybe in their wacked out way of looking at things they consider it another covert payoff from rich people in Thailand.

Oh I forgot, we shouldn't talk about any of these issues, someone might lose face. OK. Forget about all I said, hold on one moment, ok, all good now, I have my happy smiley face on and everything is alright

[marquess]

Why invest in a place like Thailand anyway? Mickey Mouse rules and regulations and no one willing to listen, there is always Hong Kong, Singapore, Malaysia or Vietnam. As the national anthem says Thailand for Thais, and that is just they way the want it, Thailand exclusively for Thais! Not that there is anything really wrong in that, but you shouldn't expect people to part with hard earnt money in such a jingoistically nationlist environment.

[Foggy Bottom]

I've not bothered reading the whole thread to date - doubt I need to judging by the first 10 or so posts

However, I'm guessing no-one brought into the discussion the Royal Decree?

e.g.

Foreign Business Act says foreigners can open businesses in the professions - accounting, law, architects etc

Royal Decree says "no can do"

= Catch 22 waiting for the investor to upset someone and guess which law will be used against the foreigner?

Think before you speak

Gaz

[thaigene2]

You are however correct in saying that countries like the EU and the US have more profit from aid than the receiving countries. Combine that with the fact that the annual amount of money sent back to the families by migrant workers in the EU and US surpasses any amount of aid, and, in most cases, is used more sufficiently. (I do not dare t calculate how much individual farangs bring into LOS every year) At the moment there is only one solution to the aid question: stop it. Is it not crazy that Europe gives aid to e.g. India in the form of educational projects whereas India refuses to solve the problem of their 300 million starving citizens, in order to keep the salaries low?

right you are! the bloody indian government should just flip the switch "more salaries to 300 million citizens". if they keep on refusing let's invoke the UN security council which will first apply sanctions and if there is no compliance cruise missiles and smart bombs will fall on Delhi.

p.s. from what far away planet do you hail honourable and learned Sir?

He's from the same planet as all of us there Mr Warf. And more and more of us are waking up to the fact that one huge game is being played out by the few who pretend they are playing for the rest of us - from Obama to Reagan, Thaksin to Prem. More and more people understand that they are not playing for us - only using us. From Udon to Denver to Delhi this is being soberly recognized. So what's going to happen? Well, Klingon, one of these days it's going to be - POW right in the kisser -- that's what's going to happen. My point is that this can be avoided if the right moves are made before the masses react..here in Thailand - Tel Aviv, Tanzania and Tumbridge Wells - oh yeah, and the big state of T-e-x-a-s!

Edit: To add the all-important Tel Aviv..

Edited August 25, 2008 by thaigene2

[CWMcMurray]

There is a large difference between developed and developing countries.

European countries are allowing anyone to invest or start a business because it will benefit their economies. There is no risk that these investment will hurt the local industry, as their economies are already advanced.

But Europe (and America) is protecting themselves everywhere it will hurt them, and are not less nationalistic than Thailand. For instance, developing countries can sell oranges to Europe without any problems. But can they sell processed oranges like jam and juice? No, import quotas are set to make it impossible to export it and still make a profit. Hence the European food processing companies are protected.

It should also be remembered that the current international trade system is heavily tilted in favor of developed countries. It is estimated that for every dollar given in foreign aid, the developing world is loosing 3 dollars due to European and American subsidies in agriculture.

Following advice from organizations such as IMF has already done so much damage to a lot of countries.Thailand is still a relatively poor country and should look after their self-interest and their own people.

I agree with you that even the US and European countries are only interested in Free Trade so long as it benefits them...

But I think the point that others are making is that while they may be set up in a way to protect local companies, it has nothing to do with the nationality of the person owning the company, it has to do with where the company is registered.

So as a Thai person you could go to that country and open a European/US company and then receive all of the benefits or protections that any other European/US company received.

[EddyB]

Good discussion about owning things as a farang... but does the law-change mean a farang can own property (=house) or doesn't it ?

[Jimjim]

If you buy a BMW in eastern europe it costs you 30% more than if you buy in Germany. Fine. If you buy the same BMW in Thailand it costs you a multiple. Not just double. But triple and quadruple. The people making these laws must be smoking something or on too many prescription drugs. Talk about protectionism. What do they think, a Thai is going to make a car better than BMW? Or maybe in their wacked out way of looking at things they consider it another covert payoff from rich people in Thailand.

Oh I forgot, we shouldn't talk about any of these issues, someone might lose face. OK. Forget about all I said, hold on one moment, ok, all good now, I have my happy smiley face on and everything is alright

You're a bit off. It's actually to benefit car makers from other countries such as Japan who make some of these cars in Thailand. The government protects those relationships by taxing other makers' cars heavily because Japanese and other nations' car factories employ a lot of Thais and bring in a lot of tax money. Makes sense if you think about it.

As to the OP, why can't they realize that changing policy like this only makes it apparent they don't want foreigners here? Sheesh. I mean, don't they realize we farang pump billions of dollars into their economy every second, give their women more handsome husbands and give the entertainment industry plenty of luk krung to entertain everybody?

Oh, wait, can't use that old line this time. Not to say that this article really said that much tangible, anyway.

[Jimjim]

Foreign Business Act says foreigners can open businesses in the professions - accounting, law, architects etc

Royal Decree says "no can do"

Interesting. I've never heard that before (not saying you're wrong). I'm interested to hear more about it. Do you know where I can find that information on the internet somewhere? Have a link?

Good discussion about owning things as a farang... but does the law-change mean a farang can own property (=house) or doesn't it ?

No, why would it?

[EddyB]

Good discussion about owning things as a farang... but does the law-change mean a farang can own property (=house) or doesn't it ?

No, why would it?

.. coz that would be great

(i normally only read the headlines, but this was worth checking into)

[Plus]

If you buy a BMW in eastern europe it costs you 30% more than if you buy in Germany. Fine. If you buy the same BMW in Thailand it costs you a multiple. Not just double. But triple and quadruple. The people making these laws must be smoking something or on too many prescription drugs. Talk about protectionism. What do they think, a Thai is going to make a car better than BMW?

No, that's what BMW thinks - they don't want to invest in supply chain for local production like Japanese did, 'cos then they'd have to compete on the same level, in the same tax bracket, with Japanese, and they've got no advantage there - power doesn't sell in Thailand, practicality and economy do. They prefer to sell thier brand name to rich cats instead.