Thai DBD to propose measures against formation of nominee companies

[webfact]

DBD to propose measures against formation of nominee companies

BANGKOK, 30 June 2014 (NNT) - The Department of Business Development (DBD) will propose to the National Council for Peace and Order (NCPO) several measures to prevent formation of nominee companies.

DBD Director-General Phongpan Jiarawiriyapan stated that the measures will require the NCPO to amend the Alien Business Act B.E. 2542 by adding an extended definition of the word ‘nominee’.

Currently the law states that a foreigner can only hold no more than 50% of a company’s share.

The proposed amendments call for greater inspection on the power of foreign committee members in a company over other committee members and an increase in the punishment terms for violators.

The Director-General said authorities should be more cautious when examining the backgrounds of individuals seeking to establish a company and, most importantly, she proposed a company should only need at least one person instead of 3 to establish a company.

She deemed that the proposed measures would eliminate the formation of nominee companies.


-- NNT 2014-06-30

[Always18]

I'm sure it would be infinitely more productive for Thailand if the those in current control of the country introduced measures to reduce xenophobia and actually encourage foreign investment by scrapping these archaic rules!

[robblok]

I'm sure it would be infinitely more productive for Thailand if the those in current control of the country introduced measures to reduce xenophobia and actually encourage foreign investment by scrapping these archaic rules!

Thais just hate having a level playing field and foreign companies often have educated people in charge instead of people who can't do a thing but have a fancy name.

Why would anyone setup a company if they cant own 100% of the shares, unless the Thai side brings in knowledge or money.

Foreign investment is important.. but Thais are just scared to death about competition.

[IMA_FARANG]

I'm sure it would be infinitely more productive for Thailand if the those in current control of the country introduced measures to reduce xenophobia and actually encourage foreign investment by scrapping these archaic rules!

----------------------------

Those laws were written at a time when for a number of reasons "foreign investors" and their nominees were putting the foreigners and their nominees in control of a lot of Thai companies into the control of foreign owners.

Mostly Japanese and Chinese at that time.

May not be quite the same situation now. but the point of those laws is still valid.

They might need to be modified to provide for real investors, but they are still valid.

Always watch your enemy closely, and your "friends" closer.

Only your "friends" know your secrets, so only they can best betray you.

These days those "friends" are large international corporations, many from Europe and the U.S.

Never trust a "banker", or "businessman" farther than you can throw him or her.

[ChrisY1]

A backward move for many intended single investors in a smal enterprise......the nominee method has been useful for many successful businesses....eliminating this system will almost stop foreigners with good ideas!

[kmj]

I'll just propose a few measures so it looks like I'm doing my job...

[Thai at Heart]

If they do this there will be some massive foreign corpora rations caught out.

Note, this comes at a moment when Thai corporations are being held.over the coals about their actions over labour.

CP gets what CP wants from the Thai government . without fail.

[pisico]

I'm sure it would be infinitely more productive for Thailand if the those in current control of the country introduced measures to reduce xenophobia and actually encourage foreign investment by scrapping these archaic rules!

Xenophobia is in the Thai social DNA.

Read the 12 Mandates from the time of a military dictator in 1938: Pibhun.

When that seasoned, wily politico; El Suthepo; declared publicly to the world while he was Deputy Prime Minister: "I don't trust Farang!"

He was merely expressing what Thais actually think and feel about Farangs.

Direct experience from real life: 4 years ago a maid that was hired by my then GF asked her:"Why you teach him (me) Thai? That's not good. Then he will know what he are talking about."

My GF was not only appalled, but also surprised to understand many of Thai attitudes towards foreigners: underlying Xenophobia.

In modern Psychology, some fears may cause a feeling of superiority simply because of a fear of being inferior.

Thailand does not know how to compete. They have been feeding their feeling of: Oh, we are so special! for generations and do not know how to shake it. The lack of proper education is the root of the problem and the blind abidance to authority.

ASEAN may impact this society positively and prompt Thais to change or be doomed to continue being a country in the eternal process to fully develop... but without foreign investment?

[thailiketoo]

I'm sure it would be infinitely more productive for Thailand if the those in current control of the country introduced measures to reduce xenophobia and actually encourage foreign investment by scrapping these archaic rules!

Thais just hate having a level playing field and foreign companies often have educated people in charge instead of people who can't do a thing but have a fancy name.

Why would anyone setup a company if they cant own 100% of the shares, unless the Thai side brings in knowledge or money.

Foreign investment is important.. but Thais are just scared to death about competition.

Americans can own 100%.

U.S. companies operating in Thailand are afforded national treatment, or an “equal playing field,” with Thai companies.

http://bangkok.usembassy.gov/doing-business-local.html

Edited June 30, 2014 by thailiketoo

[robblok]

I'm sure it would be infinitely more productive for Thailand if the those in current control of the country introduced measures to reduce xenophobia and actually encourage foreign investment by scrapping these archaic rules!

Thais just hate having a level playing field and foreign companies often have educated people in charge instead of people who can't do a thing but have a fancy name.

Why would anyone setup a company if they cant own 100% of the shares, unless the Thai side brings in knowledge or money.

Foreign investment is important.. but Thais are just scared to death about competition.

Americans can own 100%.

I know but us mere mortals cannot.

[jaidam]

The way I read this, existing companies will be grandfathered in to the old way of company structure. I mentioned to my lawyer recently that I was considering closing down my company as retirement looms. He said I can sell the company name as it was formed 12 or so yrs ago and does not have the same nominee/other rules as a newly formed company.

[Loles]

They try to banish the foreigner capital .... very smart thing, I guess

[Payboy]

Couldn't get the goods on DTAC then.

[Makai128]

Lose the foreign investors..

No Thai will ever invest their money in a company where the farang is the director.

No farang is going to invest his own money in a company where the Thai is the director.

Edited June 30, 2014 by Makai128

[thailiketoo]

Lose the foreign investors..

No Thai will ever invest their money in a company where the farang is the director.

No farang is going to invest his own money in a company where the Thai is the director.

Minor International. What you just come to town?

[Thai at Heart]

Lose the foreign investors..

No Thai will ever invest their money in a company where the farang is the director.

No farang is going to invest his own money in a company where the Thai is the director.

Well that's just patently not true at all.

[DrTuner]

One partner instead of three is actually an improvement for those establishing legit companies. A hubby&wife shop becomes a possibility. Now, about those work permit rules...

Edited June 30, 2014 by DrTuner

[tingtongteesood]

They should change the rules so that anyone can run a company as long as they are not trying to work in one of the Thai only jobs, but have a proviso that at least whatever percentage, maybe say 50% of the money made must stay within Thailand to benefit the country. That would be fair and easy enough for those who choose to live here and the other 50% could be used for expansion abroad maybe if necessary. Like marriage and divorce, if you choose to leave the country permanently then your business must leave 50% of what it made minus your initial investment for start up costs here. Fair ?

[cacruden]

Enforcement of the spirit of the law is important, and should be applauded. Either your a foreign controlled company or not. I do agree that they should change the laws so that it is easy to setup a "foreign" owned company (and registered as such) -- and it should be afforded the same rights and responsibilities as Thai owned companies (with the exception of areas that Thailand deems of national or security interest). Currency controls (including "how much can be repatriated") should be eliminated completely - they are counter productive and encourage bad behaviour and are generally the sign of a weak country (weakened by mismanagement usually). Most small companies that are setup by the owner is usually operated by the owner - which means he is residing in Thailand as such that money would likely all stay in Thailand (with the exception of deposits and registrations done in Singapore because of a more secure banking system). Large foreign takeovers of Thai companies can be reviewed by a Foreign Takeover review board if that is what the government wants to do. Encouraging people to "skirt the intention of the law" is just encouraging unethical and bad behaviour.

[thailiketoo]

In short, the AEC will transform ASEAN into a region with free movement of goods, services, investment, skilled labour, and freer flow of capital.

The ASEAN Leaders adopted the ASEAN Economic Blueprint at the 13th ASEAN Summit on 20 November 2007 in Singapore to serve as a coherent master plan guiding the establishment of the ASEAN Economic Community 2015.

http://www.asean.org/communities/asean-economic-community

[rametindallas]

Once the AEC is in force, a 'foreigner' can set up and own a local company in a more compliant member state and then open a branch in Thailand without all the controls now in existence. Patience, AEC will pull the teeth of many anti-foreigner business laws in Thailand.

[DrTuner]

AEC is <deleted>. They'll just invent restrictions like language skill requirements to put up new barriers. EU/Schengen it is not.

[jacko45k]

Condo sales flagging are they?