Thailand eyeing tighter restrictions on foreign businesses

[Whyamiandwhatamidoinghere]

The current law forms forbids foreign majority ownership in sectors win they dore Thai businesses are deemed not ready to compete with foreign companies.

Those include accountancy, legal services, architecture, engineering, brokerages, advertising, hotel operations, food and beverages and "other service businesses."

How in the hell can a Thai be majority owner and have this added leverage proposed if they don't have the business knowledge and heart to be competitive in the service sector? Moral of the story is dont start a business in Thailand unless you want to lose your investment.

[Timwin]

Here is an example how much better is to have fair terms for foreigner owned companies.

Estonia GDP per capita was in 1993 about 4650 dollars and GDP 3.88 billion dollars.

In 2013 the same ratio was 12043 dollars and GDP 24.48 billion dollars.

You can own your company 100 percent and only the profits are taxed when you take money out of your company. Flat income tax about 20 percent. Setting up everything is fast and efficient.

Compared to Thailand:

In 1993 the GDP ratio was 1945 dollars. GDP was 111 billion dollars.

In 2013 it was 3437 dolllars per capita and 387 billion dollars.

3.49 bigger economy vrs. 6.31 in Estonia.

The economy of Thailand is growing really at anemic rate compared to more free Estonia.

[MJP]

A post making a derogatory generalization has been removed.

[ExPratt]

Is this part of the "Hub" of ASEAN plan ?

[me313]

They want business to flow to other ASEAN countries in the region, a dispersement of capital and investment while Thai corporate interests become consolidated, probably into some larger monopolistic sort of centralized corporate system.

[noitom]

Presumably, all these quotes in this article are quoting this one source who wouldn't reveal his real name. Great source. Fill the article with quotes by a guy who "can pack up" and leave right away instead of genuine business men who remain foolish enough to invest in Thailand.

[rametindallas]

The current law forbids foreign majority ownership in sectors where Thai businesses are deemed not ready to compete with foreign companies.

Those include accountancy, legal services, architecture, engineering, brokerages, advertising, hotel operations, food and beverages and "other service businesses."

Why can't Thai business compete in these areas?

Substitute 'don't want to' for the word 'can't and it'll make more sense.

[GAZZPA]

Our move is already planned for the beginning of 2015.

A shame really, since we have a very fast growing and succesful IT-business here. But considering the racist-like and non-caring attitude, we have been facing from the authorities since the very beginning, it is simply not worth it. EVERYTHING is just too difficult and unsecure here. But worst is the racist-like attitude, which I am personally sick of it and which is the reason for our move.

We built a good business and created local jobs, but we are still treated like "shit" most of the times, we come in contact with the authorities. Just doing a work-permit takes more effort and requires more paper than used on a bloody 5-year rocket-scientist degree. This place is going down the drain and they have only themselves and their ignorance (stupidity) to blame for it. The article is a good example of their complete lack of international outlook and understanding of their own current situation.

Luckily, there are many countries nearby who are both grateful and happy, to welcome a company like ours. So not long until they can no longer see us as a problem anymore. "Thailand a developed country by 2025...." Good luck with that! They will for sure need it.

Wrong.

These moves have nothing to do with racist attitudes and non-caring attitudes by the authorities from the beginning. The authorities have been extremely lenient towards long stay foreigners and have turned a blind eye to most of their activities here in the past, but as I have said many times here on Thai visa, the blame falls squarely on those who have and continue to abuse the systems here, therefore having a knock on affect of creating the tightening up of the rules for everyone.

It is all very simple, those who are able to live or work in Thailand long term by abiding the terms and conditions imposed by the Immigration and trade departments have no problems and will not have any prejudices displayed against them. For those who for one reason or another are unable to hack it here have the choices of moving on if they feel will be more appreciated elsewhere as in your case and there are better opportunities for small company operators in other countries.

It would be a smart move on your part transferring your business operation abroad believing that the authorities there will give companies like yours an easier time, but I very much doubt that this would have any economical impact on Thailand at all and in any case, companies claiming to be highly successful in Thailand would somehow manage to get through the bureaucracy even if it mean`t hiring an adminstrative officer to do those tasks for them. But of course this depends on how successful these outfits really are and what are their prospects for the future?

Wow,did you read your post before you hit reply?

To start with, are you comparing overstayers and people who don't care about laws, to people who run a business, comply and abide by all the laws?

Can't hack it? What about those who want to live here, have invested money have a family and want to stay? Just get out you don't belong here?

And no economical impact, my business would lose at least 30 staff, flow on from that would double if we weren't in business, and Im only a medium to small business like millions of others.

But usual the advice, don't like it leave. Don't dare question or speak up, you have no rights here!

I suggest that you read my post again.

I am meaning the behind the scenes farang business owners using Thais to front their businesses, such as the farang discrete business owners working online, running farms without work permits, bars, massage parlours and you name it, they`re into it that the authorities are well aware of and this has brought down more tightening up of the rules and added restrictions.

Farangs that are share holders and running legitimate businesses in Thailand should have no problems and as I said; those who are unable to function here by working strictly by the rules may find easier and better opportunities in other countries or preferably their home countries where they will not be hindered by limitations and their activities not scrutinised by the authorities.

You are talking about illegal activities, of course they exist here but that is not what this is about. Corruption and back handed payments is rife in Thailand and of course there are illegal businesses operating.

But you are off topic. What the Government is talking about here is implementing legislation that means legitimate, foreign investment is all but impossible to consider.

You need to understand that it makes Thailand an unlikely option for future investments and legitimate businesses will move elsewhere. This will be a huge issue for Thailand, no one wins in this scenario.

If you want to tackle the illegal practices then arrest the corrupt police who take the payments and enforce the law.

[GAZZPA]

This should of happened a long time ago. All these farangs taking money off hard working Thais!

Thailand has long been the country of innovation and self sustainability! Western nations should be grateful to be allowed to business at all in the Kingdom, they try to learn the Thai's business practices, customer service, law enforcement, in which all fields Thais lead the world.

555

[umbanda]

This is nothing!

Another proposal is on the way. To made Thai the universal business language!

[Johnnie99]

This should not come as a surprise, given that the much more open market of the ASEAN community will hit Thailand like a rock from a great height. They are finally waking up to the financial dangers.

Can you imagine?

A Singaporean, with English as their first language, will be able to set up a school virtually without restriction.

Edited November 21, 2014 by Johnnie99

[Strangebrew]

Thai's can't compete because if they try to play on level playing field and follow the rules 555555 Yah right that is the stumbuling block" RULES". They rather you come here invest 100% of the money and get 49% of the profit. After that is Thainess.

[alant]

The current law forbids foreign majority ownership in sectors where Thai businesses are deemed not ready to compete with foreign companies.

Those include accountancy, legal services, architecture, engineering, brokerages, advertising, hotel operations, food and beverages and "other service businesses."

Why can't Thai business compete in these areas?

Because they wont learn by mixing with other global experiences so they will never learn and be ready

[whybother]

This should not come as a surprise, given that the much more open market of the ASEAN community will hit Thailand like a rock from a great height. They are finally waking up to the financial dangers.

Can you imagine?

A Singaporean, with English as their first language, will be able to set up a school virtually without restriction.

Actually, they probably won't. There are still restrictions on the types of companies that can operate in other countries under the AEC. That applies to all ASEAN countries, not just Thailand.

[culicine]

The current law forbids foreign majority ownership in sectors where Thai businesses are deemed not ready to compete with foreign companies.

Those include accountancy, legal services, architecture, engineering, brokerages, advertising, hotel operations, food and beverages and "other service businesses."

Why can't Thai business compete in these areas?

I can understand engineering...but hotels and hospitality? Seriously? So Thais have a majority hold in the big hotel chains here? No surprises why they would want to keep the status quo. And what about agriculture?

[Thai at Heart]

The current law forbids foreign majority ownership in sectors where Thai businesses are deemed not ready to compete with foreign companies.

Those include accountancy, legal services, architecture, engineering, brokerages, advertising, hotel operations, food and beverages and "other service businesses."

Why can't Thai business compete in these areas?

I can understand engineering...but hotels and hospitality? Seriously? So Thais have a majority hold in the big hotel chains here? No surprises why they would want to keep the status quo. And what about agriculture?

Both industries are restricted....

[Traveling Sailor]

A move like this could be the nail in Thailand's financial coffin. The impact, both in the short and long term, would be dire. It seems Thailand is oblivious to the emerging markets on it's door step, Myanmar in particular.

Well said! It seems like every day now the "government" puts out another "ruling" that moves Thailand further away from a democracy and closer to a Banana Republic. I wonder if someone has a copy of the playbook from China or North Korea and found it to be good reading.

[micmichd]

"If Thailand owes me nothing...Let it be nuked"

This post from a Farang economic "expert" is really worth being noted

[GAZZPA]

This is nothing!

Another proposal is on the way. To made Thai the universal business language!

[Christie Paul]

Try to relax and then think properly.

Thailand like most countries is controlled by the elite of the country. And like most countries the government serves that elite and not the country as a whole. If you're unsure of this, ask one of the 25,000 elderly Britons that are forecast to perish this winter because they are unable to heat their squalid homes. Or that chap in the US that is looking at serving jail time for feeding the poor. It goes on and on.

Those of us who have been a while have seen Thailand when it was moving forward and could hardly do no wrong. Thai airways was admired the world over. The Thai Gem and Jewellery Fair attracted business form all over the world and was neck and neck with Hong Kong's fair. The film industry was taking off and even Hollywood based outfits looked to Thailand as a production centre.

There was no where in Asia which could compete for value, prospects and dang, if the place wasn't fun. The word was out and known the world over - there was only one place in Asia to be and that was Thailand.

But for the last few years its been it's not been well. A kind of neurosis has taken over. All the good bits are shrinking and the lousy dumb bits are being augmented. Charm is being eroded by arrogance, initiatives are mostly DOA, miserable rules and regulations have displaced that round about way in which you could almost get anything done.

Thailand is going through a phase of self destruction. And there's no point whining about it or becoming exasperated. Instead open your eyes and plan accordingly.

It's going to get worse, the numerous government initiatives, increasing rules and regulations and the attitude towards falangs in particular, should leave no doubt of that. And we will become even more of a target, because we don't have any political power. If you're unsure how that works, ask an Australian aboriginal.

Our <deleted> and assets are in increasing jeopardy here. And those who are unwilling or unable to move them out of harms way will pay a serious price.

Fortunately, there are other places.

[dieseldave1951]

ha ha ha bussiness practices BRIBE BRIBE BRIBE BRIBE MORE MORE MORE

This should of happened a long time ago. All these farangs taking money off hard working Thais!

Thailand has long been the country of innovation and self sustainability! Western nations should be grateful to be allowed to business at all in the Kingdom, they try to learn the Thai's business practices, customer service, law enforcement, in which all fields Thais lead the world.

555

[Tuskfish]

Wow

If that is for real then we may just have to consider shutting down, sacking all the locals we currently support and go with international freelancers instead

And you will not be alone in that thinking.

I have been thinking this through and the claim that it is to "protect local Thai business who are not yet ready to compete".. Well if that statement really was true then dont grant any foreign investments in the areas you are trying to protect, right?

Also, the status quo is 49% ownership is foreign but Board can be foreign so Executive decisions are made by foreigners,, so proposed changes,, board has to be Thai and executive decisions have to be Thai made.. Thinking about the second option, how does this protect local business? The Thai board will still have resources and expertise of a foreign company,, do they think that a Thai board will make "moral" decisions not to trample on local businesses too much? To pull back the aggressive expansion plans as it will kick Mr and Mrs not ready into the weeds?

Get real, this is about money, the top nobs gleaning money.. Foreigners invest money, own less then half their investment from day 1 and then give all decision making over to locals..

I think we should ALL just tell them where to go, pack up and tender the enormous amount of foreign money here to neighbouring countries. Its about time the foreigners made Thailand realise how much we ALL need International business and said enough! We take our business elsewhere....!

I am going to have a very serious look at it over the coming weeks.

Agreed, this topic certainly has my attention.

My final comment on the topic tonight would be for some of us it's actually a case of...

How much do you trust your wife?

Sure she is the majority share holder but she is a teacher who makes her own salary and has little clue of what happens in "her" business anyway.

Regardless of percentages on paper it's 100% my business and 100% my decision on what happens.

However as much as I believe in our relationship, it's an unhealthy and unnecessary risk to take in business and probably in a relationship too.

I guess the other thing to consider for myself and others in this boat would be...

If you move your business back to your home country because of this, does that remove the risk? i.e. the real risk in my case is if we were to separate and she turned nasty. In which case it may not matter which country my assets/business are in anyway....

Maybe the voting rights is a false sense of security anyway

Food for thought for some of us, although I suspect different for those who actually have real Thai investors involved

Even people that have been in LOS a long time seem incognizant that it is not about the wife so much as it is about the family, leaving her no cultural option but to do their bidding. And it may be folly to expect the wife to warn you of impending disaster when youthful conditioning implants a susceptibility for becoming a de facto sleeper agent at a moment's notice. What makes it so hard to spot in advance is the Thai disdain for planning, allowing the trust and faith to be genuine...TFN. A contract of any kind in LOS is just a pause in the negotiation.

I see two gross generalisations in your comment, two of which do not apply here

Already been warned and protected more than once - certain members of the family know full well they can't play that game and will never get through her - because that would mean losing us both and them losing the support we offer voluntarily

Edited November 21, 2014 by Tuskfish

[Tuskfish]

They want business to flow to other ASEAN countries in the region, a dispersement of capital and investment while Thai corporate interests become consolidated, probably into some larger monopolistic sort of centralized corporate system.

You're right

Also, I don't mean to sound argumentative when I say "And who are we to say otherwise?"

I am yet to witness a government that puts small business before big business, local or foreign owned.

me313, not directed at you.... but I could also say "So many farangs want Thailand to be more like western countries, well by doing this, it could be said that they are"

[Tuskfish]

"If Thailand owes me nothing...Let it be nuked"

This post from a Farang economic "expert" is really worth being noted

The world has no experts

Only differing levels of experience and self-confidence

[natway09]

Dire consequencies for this country if they can not see the big down side in this impending decision.

The Thai/Chinese elite may benefit but for the average working Thai this could be disaster.

On the upside,Cambodia, Laos & Myanmar could end up with 0% unemployment

[micmichd]

If you need nukes as arguments, then your experience is probably what I would call nightmares.

How much would I trust my wife (ie my majority shareholder) ?

>= 51 pct, that's her share, and (being younger than me) she will probably (hopefully) survive me. Her daughter will (also hopefully) have a good steady income and some social security, too.

Economies in developing countries are not easy to handle. You need two speeds, one for pulling the cart, and one for getting all passengers in it. Look at China it that helps you around.

I consider old Farangs and Expats to be on side with the pullers, side by side with their younger Thai ladies (or boys, or whatsoever)

And I consider the young ones (starting with students and bagpackers) the passengers in the Tuk Tuk. They are the future, and they have no problem with age differences (other topic).

BTW does anyone know details about how to handle "creative economy" (arts, music, performances) in the LOS ?

[Christie Paul]

Russia during the Bolshivek revolution. Germany before the war. The north of England, when Thatcher came to power. Iraq, before being liberated by the Americans. All excellent times to sell up and move one asses and assets out.

And that is what many people (including wise Thais) are doing right now.

[manhood]

^{There Thai Government and their ministers seems to be totally crazy: Why should i run a business in Thailand, dont have the control over my business but take all the risk????}

^{Thailand is over stretching the band for foreigners, either run a business or like to life in Thauiland and bring all the money, work for thais and much much more!}T

Thailand is running into beeing the last in a row of asian countries somebody like to invest anyt hing! Bye bye Thailand

[micmichd]

Farewell Farang

[wow64]

Good idea make it even harder.

Thailand is already loosing ground to its neighbors when getting business here.