Thailand eyeing tighter restrictions on foreign businesses

[whybother]

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.

I wonder why the Yingluck government wanted to get back to the "pre-Thaksin feudal system", since these law changes were proposed while they were in power.

[Tuskfish]

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..

From one point of view KhunJeroen I respect your view. You're right that there are plenty of skills inside Thailand.

However what about the genuine foreigners with a thai wife/husband who are younger than retirement age? Many of these people are generating excellent opportunities for those who would not otherwise have them.

The clients we have would not deal directly with a Thai organisation who didn't have a farang owner. That may not be fair to the skilled Thai, but that's a reality I didn't cause.

[Dr. Zorg]

Absolutely absurd. Typical Thailand. Can't leave "well enough alone."

There are definitely more serious issues to address.

[Beetlejuice]

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

Totally agree and glad you appreciate the situation -

Pertaining to farang owned businesses in Thailand, they do use the hard labours of Thai workers and the Thai systems to benefit themselves. In their home countries, maintenance, tax, the running, bills, wholesale goods prices, services, labour and the work force would cost these companies much, much more. Many are taking out of the country far more than they are putting in and are raking in huge profits way more than they could archive back in Farangland.where the business expenditures are massive and in many cases defeats the object of owning and running businesses in the west, especially the smaller companies.

The Thais are using common sense and trying to ensure that their people also gain a lions share out of the deal from foreign run companies in the Kingdom if granting these companies the advantages of using their resources of cheap labour and access to lower running costs.

The old saying; one can`t have their cake and eat it.

[ColdSingha]

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

ok this explains why governments around the world are pressuring thailand to rethink. (i had a hard time thinking they were batting for the little guys )

[Jim walker]

The soldiers are not worried about the small fish heading out of Thailand there only concern will be when the big boys start to leave and a few of the high rise offices in down town Bangkok are empty and a few of the huge industrial estates are free to rent once more and by the time the penny sinks in what is happening it will be all to late just like the tourists they have started to vote with their feet now all 25million of them comes a point when enough is enough and its bye bye Thailand forever easier places in Asia to do business and possibly pay less wages.

[allan michaud]

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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?

The question is, in what sector can Thai's be truly competitive, without resorting to either corruption, nepotism or the tried and trusted violence and intimidation?

[GAZZPA]

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

yikes

I guess it would have to right? Very scary, how many foreigners went this route? Not me thankfully,,,,, good luck everyone that did, we can only hope that the lunacy ends. If ti does end still might be time to sell up though,, watch them villa prices fall!

[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.

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

Apparently Malaysia is an interesting option too but I dont really understand it, my vague understanding was that because of the ASEAN linkage you could run a Malaysian company as a 100% owner from Thailand

I don't want to jump to too many conclusions from one news article, but if this really happens we will most likely setup back in Australia and sack all the Thais we employ

[wilcopops]

My guess is that this is from the same team that brought you the stock market crash after the last coup........ I don't want to say "i told you so" - ...but I did!

[Tuskfish]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

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?

The question is, in what sector can Thai's be truly competitive, without resorting to either corruption, nepotism or the tried and trusted violence and intimidation?

True Allan, but not always true

In our case it's simply English language competency - clients want to speak to a native speaker

[mogo51]

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

Ground control to Major Tom, are you taking the p,,s? You just have to get off the drugs.

[laobali]

Somebody must have spend the entire weekend to read (and finally understand) the context of the contract they signed to join ASEAN and all possible consequences that come with it.

Hope the last farrang entrepreneur leaving the country won't forget to turn off the light.

Don't you mean blow out the candle?

[Morakot]

Sources within the Ministry of Commerce said the committee overseeing the draft law is resolute in the belief that it is vital to protect Thai interests.

On the contrary, I don't think these proposals are in the interest of Thailand.

[Jimbo2014]

This is a great idea! - it worked really well in Zimbabwe and South Africa - oh wait... maybe its not such a good idea

[Christie Paul]

This policy will initially and temporarily enrich some elites, whilst impoverishing tens of thousands of Thais.

This will be followed by social unrest and the reinstatement of Thaksin.

[Baerboxer]

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?

Rhetorical question?

[KamalaRider]

I have had plans to employ some extra staff here in Thailand, but now it seems I have to halt those plans and move to another country with my company.

I can still live here on a NON-O visa but my present staff will have to get another job with someone else.

Very soon, I can "retire" from work so these events fits my future plans perfectly if they are going to continue us farangs.

I can run (oversee) my business from anywhere in the world, but I feel sorry for all those who have invested in properties, restaurants, land, house, etc. through a Thai company.

They probably will loose everything.

My Thai wife is fuming right now, she don't want to move to another country within the ASEAN but start to acknowledge that we have to.

[laobali]

This policy will initially and temporarily enrich some elites, whilst impoverishing tens of thousands of Thais.

This will be followed by social unrest and the reinstatement of Thaksin.

No doubt followed by more social unrest, then a coup.

[gemini81]

Lately and onto into the future seems like the only good thing coming out of Thailand is FLIGHTS!

[VINCENT2012]

Foreign Business Act could allow foreigners to own a majority share in certain sectors.

not could allow....should allow is the term in all the sector, when we put 50 % of the money.

now if thais want the control, why dont they put all the money at the biggining ?

but like always ....sorry no money, no idea , i dont know ..etc etc !

come on man give us a break, only fools make business in those stupid conditions

[whybother]

This policy will initially and temporarily enrich some elites, whilst impoverishing tens of thousands of Thais.

This will be followed by social unrest and the reinstatement of Thaksin.

When this was being raised over 12 months ago while Yingluck was in government, I wonder if that was their plan.

[Baerboxer]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

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?

The question is, in what sector can Thai's be truly competitive, without resorting to either corruption, nepotism or the tried and trusted violence and intimidation?

True Allan, but not always true

In our case it's simply English language competency - clients want to speak to a native speaker

Language skills, or lack of, as you rightly say. Add to that the vast over staffing, total lack of customer service ethos, and incompetence and you see why they can't compete.

Service staff in the big branded hotels are usually really good - trained, supervised and managed by non Thais. Compare that to the service in any branded IT shop in any mall. Mrs. BB had wait nearly 2 hours to get served by True. Then it took several people half and hour to sort out a simple problem. Too much time spent on SMS, Line, FB and nose picking!

[whybother]

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?

Rhetorical question?

Actually, not really. I know a couple of Australian accounting firms that were looking to outsource some of their accounting here.

[EyesWideOpen]

I love the kaos and uncertainty of Thailand. Never a dull moment and always good for a laugh.

Unless you had a business here. Otherwise I agree, certainly a laugh a minute

with bizarre government proclamations....

[catweazle]

Thailand is stumbling back into stone age... Instead of making Thailand more attractive to tourists and foreign investors alike, they show their racist sentiment openly and without being ashamed. Wrong move guys! For me - 2 out of our 4 Thai/foreign businesses are closed now (over the past 6 months) and counting! No more tax income from there anymore my Thai Nazi friends, sorry!!!! Several Thais lost their job because of this, one Thai sub-contractor lost a client, plus has the Thai accountant lost two contracts and will lose the remaining two as well. Well done!

[Baerboxer]

They really can't understand that people aren't cuing up to hand over money and allow Thais to manage their businesses, own 51%, and do as they please.

Seriously, how can they really think like this. Scary, that any Thai government can come up with these suggestions. Are the so called business people here so sacred of their abilities that they can't face real competition? Or screwing everyone so much they don't want the gravy train derailed?

The business sectors protected will never improve and will simply cling to that protectionism.

[shirtless]

This is typical usually its the voters that forget the news of last week , Who would invest in a country where you will have little or no control over your business, One week their welcoming you with open arms the next they propose to take away your control.This statement itself will cost them there is simply to many options .Thailand can forget the 3.5% growth for next year and forever more.

[Nakajima]

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 of "mai pen rai"

[Gringogazzer]

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.

Rather obvious to a man whose been took for 2.3 million by the "uneducated" in two slices, not one, doesn't quite cut the mustard...