Thailand eyeing tighter restrictions on foreign businesses

[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

[Ulic]

I am always curious to see what happens when countries shoot themselves in the foot. This would be very interesting

to see the aftermath if they pass these reforms. A 90% reduction in small foreign owned businesses I am sure. Not sure

who will have to pay severance packages to staff if some businesses close shop, the 51% majority shareholder I hope.

[BigSkip]

Just the Thai way of shooting themselves in the foot AGAIN, better put: STUPID IS... IS WHAT STUPID DOES.............

[peptidebomber]

Execellent. For those who complain, no one asked you to start a 'business' in Thailand. Somehow foreigners stil think that Thai need them, think twice. Most Thai having university degrees are very well educated whether it is IT, economics etc and can work at any Multi National. For the small 'businesses' I think it is completely logic government helps to protect Thai interest.

Thais do need foreigners, middle and low income Thais would hit the hardest from changes like this.

My 30 thai staff would have to find new employment.

Thai university degrees are not worth a thing in the real world, my receptionist/cleaner has one!

[gopis108]

I dont know who came up wiyth this non-sense idea but it is most likely someone who has been getting away with shady business for years but when Farangs come along and do everything properly they then feel threatened,as usual.This proposal is one huge step for mankind-unfortunately it is backwards.....Why not come up with some sensible useful ideas like allowing foreigners to own propery under two Rai,or giving a proper permanent residence where the farangs do not have to run down to report to mummy every few months,or pay to go out of the country every time.There is so much non-sense here one could practically throw a dart at a blackboard and find something more sensible than this proposal.I know I know-if I dont like it I can go home,and that is precisely what I did.

[Tuskfish]

the country that has soooo many contributions on the world stage: like jasmine rice...and?.....oh, and nothing else. If they want more protectionism despite the 49% share in effect, and admit they cant compete with foreign business... I'll laugh when the place is one day an occupied territory of China. Happy we're working in the west next year...architectural firms are on their s*itlist as well...

My friend in HK thought I was mad when I said "watch this space in 50 years when China takes Thailand, Laos and Vietnam too"

[BigSkip]

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

Are you joking, business practices, customer service, law enforcement, lead the world.

1: a Thai property company swindled me out of 2m baht, and 2 law firms took over 300,000 from me and did a runner.

On 3 occasions I took products back within the warranty period and they smiled at me and said cannot help you. No warranty.

Yes shaurene, I was joking, thought it was rather obvious.

Yes "PEP" you were rather obvious...........you should have stated: April Fools instead..............

[ColdSingha]

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

don't do that! find yourself a nice thai person or company to partner up with. once you've handed over your 51%, business model and customer list they'll take care of everything else.. including your flights home

[Benmart]

Let it become law and let Thailand live with the consequences. It's their country and perhaps "they" may enjoy stewing in their own juices spiced with shortsightedness and ultra-nationalism.

[GAZZPA]

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.

[ColdSingha]

i'm assuming this is going to affect all the thousands of shell companies holding villas for foreigners as well?

yikes

[leggo]

mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm splash gurgle gurgle!

[whybother]

That's what you get from a puppet whose master orchestrated a change. Now the master elite are taking full advantage to shore up their interests.

Which puppet master? The one in charge more than 12 months ago when this was being discussed?

[Tuskfish]

What problem are they trying to fix exactly? An individual or group that inject a % of cash, deserve that % of control.... or did I misunderstand something about vote and shares on a very fundamental level?

Maybe I misunderstand your question... and sorry if you know this already....

There are loads of farangs who register a business here with their wife as the majority shareholder.

In my case the startup captial, operation costs and well everything was 100% invested by me and me only.

Receiving 100% control in return just isn't an option so having voting rights was the next best thing.

[kannot]

Why dont they stop wasting time and ban all foreign companies, foreigners per se and close the border to "The Greatest Country On Earth"

Give it 10 years before its 4th world.

[ColdSingha]

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.

more than a few business owners i know are currently opening offices in Cambodia as we speak with a long term view that goes beyond expansion and towards migration

[csroland]

But at the same time it welcomes foreign investors.

Yes, yes. Welcome money

Good bye farang, just leave the money with us. We will take care of it

[whybother]

Those companies are all under the BOI (Board of Investment) and 100% foreign ownership has always been available.

What they really will do is going after those front-end companies with their Thai wife and the farang owns 49% in the company.

Nana Plaza is another typical example. Its controlled by foreigners (US citizens) and also they only own 49% they have preferential shares.

Their are thousands of guesthouses and small hotels that are running under the same structure.

I believe those businesses are of risks but not the large scale companies.

With a BOI company you get twice tax incentives up to 100% for 7 years and an additional 3 years.

I did not know that, thanks for the precision.

So looking at what you wrote, it is definitively aimed at foreign owned small businesses. It is almost some kind of econo-racism against the farang owner.

It's not just small business. DTAC is one BIG company that is affected by these laws.

[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

don't do that! find yourself a nice thai person or company to partner up with. once you've handed over your 51%, business model and customer list they'll take care of everything else.. including your flights home

She already has it!

[nullx8]

What problem are they trying to fix exactly? An individual or group that inject a % of cash, deserve that % of control.... or did I misunderstand something about vote and shares on a very fundamental level?

not exactly ... what you saying is correct for Standard/ordinary shares ..

you put 49% of assets .. you own 49% and have 49% votes

but with preferred shares .. you can inject (nice word btw) .. 1000% but your power inside the company is still zipp !

this is to actually allow investments inside a company to be happen without loosing the control over it.

so you can have as example have the thai side hold 5% of the comany in ordinary shares

and you as the foreigner holds 4% of the ordinary shares

and a group of persons (investors) do hold 91% of Prefered shares .. 100% legal.

of course agreements can be made outside the constructs .. but this is another story.

prefered shares however are protected and always beeing first to be paid out.

so if a company makes just enough to pay the prefered shareholder dividend .. the ordinary shareholder (which will include the 51% thai) will get out empty handed ..

as the prefered investors have traded the right to control the comapny with the right to be paid first.

this also counts in a bankrupt case and other scenarios as well.

btw, basically ALL large thai companies operating in this way .. its very common ..

this is btw also why its legally possible foa the singaporean finance ministery to "OWN" AIS

and telenor owns DTAC .... they not really operate the companies .. but the money is from there.

even the super loyal enterprises like Siam commercial bank or Siam cement operating this way

[laobali]

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

5bloody5!

[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.

I can appreciate their intention to protect local business, that's fine if that's what was actually happening.

The clients we have, the projects we manage, the traineeships we offer would never be available to people in our city if it wasn't for my investment. I don't mean to sound like I want an award. I just mean to illustrate how we are not competing with local business, we are creating it. And if they are to take away the only way I can protect my investment, it's gone.

Edited November 20, 2014 by Tuskfish

[flakes]

Execellent. For those who complain, no one asked you to start a 'business' in Thailand. Somehow foreigners stil think that Thai need them, think twice. Most Thai having university degrees are very well educated whether it is IT, economics etc and can work at any Multi National. For the small 'businesses' I think it is completely logic government helps to protect Thai interest.

Okay,,,Yes Thais are so capable persons ?So then we no longer need to give them our houses, land ,hotels companies and whatever else they used to get for free from us.

Government its twisted instead of saying : Hey foreigners you can not invest in anything in Thailand.

However the government is not saying that..They say: We are open for foreign investors you can invest in anything you want.The catch is of course that only u will never control your investments.Even worse in time you will be kicked out of your own investment and thais will end up for free with your investment..

And we cant complain about it ?

Thats fishy mate..

[contraman]

Thai businesses will never be efficient or competitive if they are to be continually protected by draconian laws.

The country will only thrive if if businesses is open to all

Edited November 20, 2014 by contraman

[jcisco]

What problem are they trying to fix exactly? An individual or group that inject a % of cash, deserve that % of control.... or did I misunderstand something about vote and shares on a very fundamental level?

Maybe I misunderstand your question... and sorry if you know this already....

There are loads of farangs who register a business here with their wife as the majority shareholder.

In my case the startup captial, operation costs and well everything was 100% invested by me and me only.

Receiving 100% control in return just isn't an option so having voting rights was the next best thing.

Then I really do not understand , if you have voting rights and they are = 100% that is control? Or do you define control by who sits on the executive not the board? In which case I really should change profession.

[jspill]

So none are particularly welcome, visa runners, students, and now WP holders.

[weegee]

this is not about chasing away foreign businesses but protecting Thai ones.

What a load of old bol****s

Any Thai involvement with a firm that has a 49% foreign ownership is completely inert 99% of the time.

It is technically the foreigners business. The Thai side is a begrudged aspect to be able to register here at all.

So nothing to protect as far as Thais go.

More like facilitating the ability for the Thai side to take full control and end up stealing the business away from the foreigner.

This is going to bite them in the ass big time.

I thank my lucky stars that I am 100% trading under the radar. No tax, No regulation, Squirrel all the cash I can out of the country so that one day I can sell up and get out of this crap hole and start up my dream business somewhere a lot less ridiculous.

Exactly what happened in Vietnam about 15yrs ago....and the damage done there to foreign business investment, is still recovering.

[nisakiman]

The ones proposing this don't give a fig about the economy - it won't affect them anyway; they're wealthy enough to be immune to any recession. It's all about getting back to the pre-Taksin feudal system, where peasants know their place and the elite can get on with exploiting them like they used to. All these foreign businesses are undermining the balance of the historical model, where a small, educated elite, the favoured ones, control the whole country.

Whether they will prevail or not remains to be seen. The cat is out of the bag, now, and the rural population understand that they have a right to participate in the future of their country.

[Tuskfish]

What problem are they trying to fix exactly? An individual or group that inject a % of cash, deserve that % of control.... or did I misunderstand something about vote and shares on a very fundamental level?

Maybe I misunderstand your question... and sorry if you know this already....

There are loads of farangs who register a business here with their wife as the majority shareholder.

In my case the startup captial, operation costs and well everything was 100% invested by me and me only.

Receiving 100% control in return just isn't an option so having voting rights was the next best thing.

Then I really do not understand , if you have voting rights and they are = 100% that is control? Or do you define control by who sits on the executive not the board? In which case I really should change profession.

Not 100% - just more than the others

[GAZZPA]

Execellent. For those who complain, no one asked you to start a 'business' in Thailand. Somehow foreigners stil think that Thai need them, think twice. Most Thai having university degrees are very well educated whether it is IT, economics etc and can work at any Multi National. For the small 'businesses' I think it is completely logic government helps to protect Thai interest.

Do you have a Thai degree in economics? If you think Thailand does not need foreign investment and International trade you learnt jaff all from your degree.

I think you are probably right, Thailand should not make it easy for foreign investment. I also think this should be reciprocal,, so

All GSP, FTA and duty allowances for Thailand should be cancelled,, all Thai exports should be treated in the same way as foreign imports (200% duty), all cash donations to support Thailand should stop,, no Thai person can ever invest or own land or businesses outside of Thailand,, etc, etc

You need to seriously think about what you are saying.. FACT every country, East or West needs International trade, foreign investment and reciprocal agreements. That is the way of the modern world today and it isn't going to change,, (even for somewhere as important as Thailand). You saying you don't need anyone is ridiculous,,, watch what happens to Thailand if the Leaders of your country think like you and shut the doors.

Try and think with your brain and not your heart (and if you have any prejudice put is aside).