Foreign ownership regulations need to be changed, says SEC

[webfact]

Foreign ownership regulations need to be changed, says SEC
ERICH PARPART
THE NATION

BANGKOK: -- THE Securities and Exchange Commission has said foreign ownership regulations should be relaxed in order to attract more foreign investors.

The call for the red-tape overhaul came as the Taiwan Stock Exchange revealed that getting rid of regulation barriers was key to luring back local companies that had listed abroad.

SEC deputy secretary-general Tipsuda Thavaramara told a seminar arranged by the Association of Thai Securities Companies that it was "almost embarrassing" that Thailand still had regulation barriers regarding foreign ownership.

Tipsuda also said the list of industries protected by the Foreign Business Act could be shortened to lower these foreign investment barriers. "The FBA list is quite broad, especially list 3, which also stated that foreigners who provide a service that is not contained on the list must still obtain a foreign business licence prior to commencing operations," she said.

"Therefore, an exemption has to be sought case by case, which is why the SEC has invented the NVDR [non-voting depository receipt] to allow access to financial benefits for foreigners who do not want to express any control, but there are complications and it is not the same as real holdings.

"It would be better if the FBA's list is shortened, as the market always has issues against NVDR but we always told them [the markets] that the regulations cannot be further relaxed because of the FBA."

Nevertheless, Tipsuda revealed that the SEC was working on vehicles to facilitate overseas investment and it expected to introduce an infrastructure trust early next year to go along with an infrastructure mutual fund.

This, she said, would allow investors to invest in a wider range of infrastructure, domestic and international, in order to support regional connectivity.

This would result in the introduction of a depository receipt that would be listed and traded on the SEC while allowing the listing of depository receipts based on shares already listed on exchanges in the Greater Mekong Sub-region (GMS).

Tipsuda said another vehicle that was going to be introduced next year was the GMS mutual fund, and the SEC planned to relaxed investment restrictions for retail mutual funds so all the fund assets could be invested in GMS products.

She said these included shares of listed companies in Laos, Cambodia, and Vietnam where mutual funds offered for retail would be allowed to invest up to 100 per cent in shares of listed companies that were not member countries of the International Organisation of Securities Commissions.

Meanwhile, Taiwan Stock Exchange president Michael Lin said Taiwan had worked hard to amend many regulations, including the country's Security Exchange Act, in order to lure back Taiwanese companies that had listed abroad.

He said doing so had attracted companies from the United States, Japan, Hong Kong, and Singapore.

"The regulation issues are the first and foremost barriers that need to be removed in order to attract foreign investment and lure back companies that went abroad to be listed," he said.

Lin revealed that currently there were 38 foreign companies listed on Taiwan Stock Exchange and the funds raised by these companies amounted to US$5.3 billion (Bt174 billion) in 2013, which was almost the same as the amount raised by local companies.

Source: http://www.nationmultimedia.com/business/Foreign-ownership-regulations-need-to-be-changed-s-30247351.html

-- The Nation 2014-11-10

[NongKhaiKid]

It's reported elsewhere that a senior Japanese diplomat in BKK has warned that if the plans to tighten the provisions of the Foreign Business Act go ahead at least half of the Japanese companies here will be waving ' Bye ' Bye.

Will the govt pay any attention or will face, bravado and ' never happen ' attitudes prevail and the risk is taken ?

Not so long ago a Thai official said companies in Europe were in trouble and Thai investors should get in there and fill their boots.

Completely different of course.

[RustBucket]

It's reported elsewhere that a senior Japanese diplomat in BKK has warned that if the plans to tighten the provisions of the Foreign Business Act go ahead at least half of the Japanese companies here will be waving ' Bye ' Bye.

Will the govt pay any attention or will face, bravado and ' never happen ' attitudes prevail and the risk is taken ?

Not so long ago a Thai official said companies in Europe were in trouble and Thai investors should get in there and fill their boots.

Completely different of course.

The government won't even understand it. They are soldiers, not politicians or civil servants in that field.

It's like putting a welder in charge of an ice cream factory.

[robertthebruce]

I've had this conversation before with a few Thai People, and 99 percent of them, don't want Foreigners to own anything, ??? But they are happy to own stuff abroad if they live in that Country.

I explained to them that , that was the same, but they could not see it ???

For me, it would be a Great start if they could move into the 21st Century and clean the place up, in all respects....

[kurnell]

Losing their money is all these wealthy parasites understand. If Japan pulled out and tourism went to shit then maybe they'd learn a quick lesson, though not for long.

[jaidam]

Seems indeed it will change, to make the rules for foreign control over their business here even more difficult. That they seem happy to lose Japanese investment says a lot about the intensity of this junta's xenophobia.

I am considering closing down my company/business and moving to a business fronted by my wife, where I will work quietly in the sidelines on an O visa, and forget about jumping through the ever smaller hoops, wasting a fortune on SS, taxes,work permits, visas. Enuff's enuff.

The only thing that will reign in the xenophobia would be overseas reciprocation. Wouldn't it be priceless seeing the UK, US and other countries tell the Thai bigwigs(politicians and army/high ranking civil servants) that they must give their overseas mansions and businesses to farang to own, well at least 51%. A wonderful lesson in trust and risk management. They will be spitting feathers over it!

[Thai at Heart]

If they tighten the rules up, there will be an enormous exodus. They would do very well to heed the warnings of the Japanese minister.

The Japanes created this industry once already and went through the hardships of doing so in an undeveloped country. They can and will do it again if the Thais think they can extract any more rent than they have already taken.

[NongKhaiKid]

I've had this conversation before with a few Thai People, and 99 percent of them, don't want Foreigners to own anything, ??? But they are happy to own stuff abroad if they live in that Country.

I explained to them that , that was the same, but they could not see it ???

For me, it would be a Great start if they could move into the 21st Century and clean the place up, in all respects....

In the '90s my first landlady in Bkk was very rich, had a royal title and I learned from the estate agent she only rented to foreigners.

When I met her to get the seal of approval she made it clear that renting was all foreigners should ever be permitted to do but later in the conversation spoke of the property and bank account she had in the London area. i discreetly suggested the situation should be more balanced and her attitude was if foreign govts permit it should be taken advantage of but it must never happen in LoS.

Says it all really.

[BoonToong]

The government won't even understand it. They are soldiers, not politicians or civil servants in that field.

It's like putting a welder in charge of an ice cream factory.

I have met many extremely capable soldiers in my time that were intelligent, humane, honourable, analytical and wonderful leaders, qualities that would put most politicians or civil servants to shame.

Just because they wear boots, doesn't make them incompetent in politics.

[BoonToong]

Personally, I think the Thais have got this one right.

Some decades ago now, 'my' home country, Scotland, was sold off in huge lots to foreign buyers, particularly from Japan. Now a lot of Scotland is owned by non-Scots and it is my opinion that this should not have been allowed.

[NongKhaiKid]

Losing their money is all these wealthy parasites understand. If Japan pulled out and tourism went to shit then maybe they'd learn a quick lesson, though not for long.

if the Japanese, and others, were to pull out plus tourism failing I'm sure they would resort to the standard Thai business ' model ' increasing all costs, fees etc, no deals or incentives. Take it or leave it.

[jcisco]

If they would only just stop it with this foreign ownership crap and follow as with Singapore, HK and Malaysia being three obvious examples of doing the exact opposite and benefiting wildly. If they would also switch to territorial taxation the barriers to increasing activity in the country's banking, legal, service and of course workforce would be attractive to many.

People will take the risk of a weak regulatory governance, taxation, judicial and infrastructure for a multitude of reasons, regardless the activity would be great for the country. In many cases it would never be thai behind most businesses as with nah nationality really, so why is they think it would be and they are missing out.

Sigh

[shirtless]

Western and all foreign countries should reciprocate land and business ownership for Thai nationals hell its only fair,

[Bluespunk]

"Therefore, an exemption has to be sought case by case, which is why the SEC has invented the NVDR [non-voting depository receipt] to allow access to financial benefits for foreigners who do not want to express any control, but there are complications and it is not the same as real holdings."

Erm.....what?

[SteveFong]

I am still waiting for evidence that any US business was intending to increase their investment in Thailand,

on the contrary,

the US administration is trying to find ways of bringing back all the money that US corporations have over seas back to the US to create more jobs here before they have revolts

[jcisco]

Personally, I think the Thais have got this one right.

Some decades ago now, 'my' home country, Scotland, was sold off in huge lots to foreign buyers, particularly from Japan. Now a lot of Scotland is owned by non-Scots and it is my opinion that this should not have been allowed.

ah Scotland permitted foreign free hold sorta ownership oops, probably about as a big a screw up as the unregulated feudal system they land ownership exists under.

Westminster has been trying to drag Scotland to the 21 st century and entirely failed due to intransigent Scotland. And your complaining that the land is in foreign hands, the Scotland land case is an exceptional example as the last frontier of backwards all you can eat land acquisitions left in Europe or anywhere relevant. Most countries are a little more protective of their dirt than than cash n carry Scotland.

Bring some regulation to the environment claim back your land and be happy, won't get fixed till you fix yourself own system first.

[jabis]

There is lot more than simple freehold land ownership in the FBA, now to be tightened even more. It can only backfire as the investors lose confidence in the security of their assets once more. Can't imagine - for example let's say Toyota - to keep manufacturing goods in TH soil if the mother company has to relinquish full control over to local dealers. How can for example quality assurance and after sales departments work with the same standards, if the local branch is not accountable to the brand company?

A lot of questions, even in the media, that I think Japanese rarely raise - so deep concearn about the future has been voiced out by a trading partner for several decades - I see it as a warning sign.

[Thanet]

Personally, I think the Thais have got this one right.

Some decades ago now, 'my' home country, Scotland, was sold off in huge lots to foreign buyers, particularly from Japan. Now a lot of Scotland is owned by non-Scots and it is my opinion that this should not have been allowed.

Imagine Thailand with no Japanese investment though.

The industrial parks would be practically empty.

[SteveFong]

There is lot more than simple freehold land ownership in the FBA, now to be tightened even more. It can only backfire as the investors lose confidence in the security of their assets once more. Can't imagine - for example let's say Toyota - to keep manufacturing goods in TH soil if the mother company has to relinquish full control over to local dealers. How can for example quality assurance and after sales departments work with the same standards, if the local branch is not accountable to the brand company?

A lot of questions, even in the media, that I think Japanese rarely raise - so deep concearn about the future has been voiced out by a trading partner for several decades - I see it as a warning sign.

thought I saw the Japanese Yen was among the currencies growing increasingly weaker as their economy has been stalled for years and the US Dollar has been pummeling exports

that the Baht doesn't move just shows its insignificance, which is not the same as stability

if the Baht has tecnhically become stronger against the Yen, that doesnt seem to me a good sign for their willingness to be producing in Thailand, although, I don't know their deals

if they aren't the owners of their dealerships, that sounds strange though

Edited November 10, 2014 by SteveFong

[Thai at Heart]

Personally, I think the Thais have got this one right.

Some decades ago now, 'my' home country, Scotland, was sold off in huge lots to foreign buyers, particularly from Japan. Now a lot of Scotland is owned by non-Scots and it is my opinion that this should not have been allowed.

ah Scotland permitted foreign free hold sorta ownership oops, probably about as a big a screw up as the unregulated feudal system they land ownership exists under.

Westminster has been trying to drag Scotland to the 21 st century and entirely failed due to intransigent Scotland. And your complaining that the land is in foreign hands, the Scotland land case is an exceptional example as the last frontier of backwards all you can eat land acquisitions left in Europe or anywhere relevant. Most countries are a little more protective of their dirt than than cash n carry Scotland.

Bring some regulation to the environment claim back your land and be happy, won't get fixed till you fix yourself own system first.

I think he is talking about the English....

[Thai at Heart]

Personally, I think the Thais have got this one right.

Some decades ago now, 'my' home country, Scotland, was sold off in huge lots to foreign buyers, particularly from Japan. Now a lot of Scotland is owned by non-Scots and it is my opinion that this should not have been allowed.

Imagine Thailand with no Japanese investment though.

The industrial parks would be practically empty.

Just look at the wealth that has been donated to these sleeping partner shareholder for producing basically nothing.

One of them.is now tourism minister. There are a few hundred of them and they have been given billions by the h

Japanese. Why anyone would want to kill this goose is beyond me.

Maybe the army want to pursue the Myanmar model where u have to get into bed with the army to do business.

[robertthebruce]

Personally, I think the Thais have got this one right.

Some decades ago now, 'my' home country, Scotland, was sold off in huge lots to foreign buyers, particularly from Japan. Now a lot of Scotland is owned by non-Scots and it is my opinion that this should not have been allowed.

I doubt if they touched on Dundee.....ehhhhhhh

[robertthebruce]

Personally, I think the Thais have got this one right.

Some decades ago now, 'my' home country, Scotland, was sold off in huge lots to foreign buyers, particularly from Japan. Now a lot of Scotland is owned by non-Scots and it is my opinion that this should not have been allowed.

ah Scotland permitted foreign free hold sorta ownership oops, probably about as a big a screw up as the unregulated feudal system they land ownership exists under.

Westminster has been trying to drag Scotland to the 21 st century and entirely failed due to intransigent Scotland. And your complaining that the land is in foreign hands, the Scotland land case is an exceptional example as the last frontier of backwards all you can eat land acquisitions left in Europe or anywhere relevant. Most countries are a little more protective of their dirt than than cash n carry Scotland.

Bring some regulation to the environment claim back your land and be happy, won't get fixed till you fix yourself own system first.

Excuse me, Scotland is in the 21st Century...., we now have Wi-Fi, .... So we can listen to Terry Wogan....

[Tatsujin]

I've had this conversation before with a few Thai People, and 99 percent of them, don't want Foreigners to own anything, ??? But they are happy to own stuff abroad if they live in that Country.

I explained to them that , that was the same, but they could not see it ???

For me, it would be a Great start if they could move into the 21st Century and clean the place up, in all respects....

But you are forgetting how poor and downtrodden the vast majority of Thai's actually are, they need the protectionism so that they don't get taken advantage of by all the really bad horrible greedy corrupt people outside the borders of Thailand.

Of course, it's fine for really bad horrible greedy corrupt people native to Thailand to take advantage of each other (and foreigners), but for a foreigner to do it is bad on so many levels.

The hypocrisy and double-standards here are laughable.

On another note, I know of 12 businesses in the last 6 months that have stopped being registered in Thailand and have moved to be registered in other Asian countries that don't have such stupidly blind restrictive policies. They won't ever be back no matter what Thailand does to change things and I'm sure there are many, many others.

[h90]

It's reported elsewhere that a senior Japanese diplomat in BKK has warned that if the plans to tighten the provisions of the Foreign Business Act go ahead at least half of the Japanese companies here will be waving ' Bye ' Bye.

Will the govt pay any attention or will face, bravado and ' never happen ' attitudes prevail and the risk is taken ?

Not so long ago a Thai official said companies in Europe were in trouble and Thai investors should get in there and fill their boots.

Completely different of course.

The government won't even understand it. They are soldiers, not politicians or civil servants in that field.

It's like putting a welder in charge of an ice cream factory.

Well but I suppose a welder can understand how to run an ice cream factory, if he tries his best and ask specialists.....After say 6 month he should have some basic understanding of it.

[jabis]

There is lot more than simple freehold land ownership in the FBA, now to be tightened even more. It can only backfire as the investors lose confidence in the security of their assets once more. Can't imagine - for example let's say Toyota - to keep manufacturing goods in TH soil if the mother company has to relinquish full control over to local dealers. How can for example quality assurance and after sales departments work with the same standards, if the local branch is not accountable to the brand company?

A lot of questions, even in the media, that I think Japanese rarely raise - so deep concearn about the future has been voiced out by a trading partner for several decades - I see it as a warning sign.

thought I saw the Japanese Yen was among the currencies growing increasingly weaker as their economy has been stalled for years and the US Dollar has been pummeling exports

that the Baht doesn't move just shows its insignificance, which is not the same as stability

Still JP money on the market equals nearly half of all foreign investment in TH - which makes it one of the most dangerous sectors for domestic market implosion in the finance sector, for the whole country. JPY also has a tendency to rebound - and there is a steady mild growth to be seen even on 12 month scale - especially with the aftermath of fukushima, and reforming the energy policies after.

[ramrod711]

Many countries allow foreign ownership, the Chinese have bought many historic buildings in the U.S.. The land remains in the country, it isn't like it can be removed. Taxes must be paid, permits must be obtained for building and foreign investors still require visas to enter the country. I see no problem with foreign buyers owning land, the argument that prices will be driven up is ridiculous, it only applies to rich Thais. Most working class people in any country don't own multiple properties.

[JOC]

<Nevertheless, Tipsuda revealed that the SEC was working on vehicles to facilitate overseas investment and it expected to introduce an infrastructure trust early next year to go along with an infrastructure mutual fund.

This, she said, would allow investors to invest in a wider range of infrastructure, domestic and international, in order to support regional connectivity.> QUOTE

She just repeated the old Thai mantra: We want your money, but................................................

[SteveFong]

Personally, I think the Thais have got this one right.

Some decades ago now, 'my' home country, Scotland, was sold off in huge lots to foreign buyers, particularly from Japan. Now a lot of Scotland is owned by non-Scots and it is my opinion that this should not have been allowed.

Imagine Thailand with no Japanese investment though.

The industrial parks would be practically empty.

Just look at the wealth that has been donated to these sleeping partner shareholder for producing basically nothing.

One of them.is now tourism minister. There are a few hundred of them and they have been given billions by the h

Japanese. Why anyone would want to kill this goose is beyond me.

Maybe the army want to pursue the Myanmar model where u have to get into bed with the army to do business.

am I missing something, or did not the Army take over Thailand this year?

[TallGuyJohninBKK]

The Bangkok Post's headline on the article warning of an "exodus" of Japanese investment seems a bit overblown and sensationalized, based on what the article actually says.

The article starts out talking about potentially half of Japanese companies being AFFECTED by the proposed change. But then further down in the article, in fact, the Japanese minister is quoted is saying that IF the latest FBA amendment were to pass, many of the impacted Japanese companies probably WOULD choose to surrender operational control rather than withdraw their investment from Thailand.

Meanwhile, you've got to wonder about their political sense when the same guy is quoted as saying that "no one" (in his world, prior to the latest one) expected there would be another military coup in Thailand. Has there ever been a time in Thailand's recent political history where there wasn't another one in the offing somewhere???