Thailand eyeing tighter restrictions on foreign businesses

[maddermax]

Another disturbing aspect of living here is how the police handle emergency situations. A friend of mine recently died on his own in his apartment. He was not married, but was about to marry his Thai girlfriend. They tell me that the police came and took everything from his apartment, ie, computers, documents, medals, etc. It took several attempts and a diplomatic incident to get them returned to his girlfried but the medals were never returned.

Does anybody know if this is legal and what you need to do to prevent it happening to you? Is there any difference if you are married to a non-Thai?

Thanks in anticipation.

[ColdSingha]

sounds to me like they are saying they want zero foreign controlled businesses now (unless meet BOI conditions)

however foreigners are welcome to invest in thai controlled businesses

all thai companies currently controlled by foreigners both big and small will have to relinquish control to their majority thai partners

have i got this right?

[MediaWatcher]

ramrod711, on 20 Nov 2014 - 15:09, said:

Now a draft law put forward by the Ministry of Commerce would restrict foreign firms from being able to use preferred stock to retain control of their businesses.

"This proposed change would have far-reaching ramifications that would affect thousands of existing firms here, big and small, and would certainly deter future foreign investment," said Marcus Burtenshaw, executive director of real estate consultancy Knight Frank Thailand.

And just 3 days ago;

Special Report: Thailand welcomes all investors

This only goes to "prove" what many say/think, that is, Thailand wants you to invest, but wants to "control" the investment.. in other words, they want your money, knowhow, intelligence etc, but doesn't really want you.

[loonodingle]

What do you think they discuss in their meetings prior to the announcements???

I will get the ball rolling with these master pieces.

1: Damn Pesky Foreigners coming here to our country, well we will show them.

2: Lets announce the destruction of Foreign Company's we would be far better off without them.

3: Lets drive our stock market down by at least 10% today.

4: Lets blame the Foreigners for our woes.

[Khun Paul]

This is one area where internationally Thailand can be seen to shooting themselves in the foot, all in the name of protectionism. If i was an invester I would look anywhere in SE Asia but NOT Thailand that's for sure.

[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?

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

Low skills, poor training and development, poor customer service attitude, inward looking, lack of personal accountability, poor language skills - just for starters.

I know firms that were set up here, by farangs, in the outsourced services sector. All closed eventually, with a few people loosing quite a bit of money. Recruiting and retaining good staff, Thai directors taking out but not actually contributing, accounting discrepancies, never ending red tape, hassle from immigration and the tourist police on the employed farangs etc etc.

I do know some successful IT companies - all down to the hands on management of the principle farang boss. Now, that may have to change. I know one very large successful farang business been here long time. That is again hands on managed by farangs. If this changes, can't see any of them staying.

[NamKAheng]

Top that with the other news:

http://www.thaivisa.com/forum/topic/778055-thailands-board-of-investment-boi-admits-that-foreign-investment-is-declining/

[loonodingle]

sounds to me like they are saying they want zero foreign controlled businesses now (unless meet BOI conditions)

however foreigners are welcome to invest in thai controlled businesses

all thai companies currently controlled by foreigners both big and small will have to relinquish control to their majority thai partners

have i got this right?

You got it in one.... Well done.. you still have phone a friend and 50-50 left ;-)

Its bonkers hey. I know several people who will be off that employ in excess of 100 Thai's.

[Oryx816]

I don't know why this is even a surprise. It is part of the plan to return happiness to the Thai people by getting rid of those annoying farangs and "protecting" Thai interests. They need protecting because they cannot compete with competent people.

They never see the big picture, jealousy clouds any judgment they may have.

Som nom na.....

[Tuskfish]

sounds to me like they are saying they want zero foreign controlled businesses now (unless meet BOI conditions)

however foreigners are welcome to invest in thai controlled businesses

all thai companies currently controlled by foreigners both big and small will have to relinquish control to their majority thai partners

have i got this right?

Fair summary I'd say (and thanks for suggestion of the cold singha... needed that)

Maybe the smaller companies are of little concern to them economically. Sure I can cite a long list of reasons why these small organisations stimulate growth but does it make a big enough impact on the bottom line? I'd guess not.

Also, maybe they have plans to revise said BOI conditions but somehow I doubt that.

Edited November 20, 2014 by Tuskfish

[pepi2005]

Seriously, I was thinking it can't be much more complicated to set up a business than in Thailand,

where it's not even possible to work self-employed as a foreigner (something 90% of all Thais do) - no, as a foreigner you have to formally set up a company with all BS involved (shareholders etc.), have to set up a real office (even if you don't need any due to the nature of your work) and submit a stack of 3 cm paper, and my agent advised me that if I want to avoid blackmailing visits from local authorities, I would have to fly to another country to get my business visa and still do visa runs every 3 months.

After 3 years of doing this, I gave up out of frustration due to the bureaucratic hurdles which took valuable time that I would have needed to focus on my work. I now pay my taxes in another Asian country.

And not it should become even tighter??! What can become 'tighter' for foreigners than it already is? Well I'm sure the Thais will find a way...

Edited November 20, 2014 by pepi2005

[KamalaRider]

Classic case of the left hand doesn't know whet the right hand is doing, one minuet they encourage

people from all over the world to come to invest in Thailand and the next they come out with new

draconian masseurs how to stuff it all up... too many bureaucrats are spoiling the broth here...

No, they are not, investors are welcome to bring their money, but leave the money to be managed by Thais and they will send you a report of how well they manage it. They want you to sit and relax while they screw you.

It is that kind of nationalism that is killing this country.

But for the big industries, they will be sure to make some kind of loophole because you think Mercedes Benz, Toyota and big business like that will give the control of their companies to satisfy the nationalism of the Thais.

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.

Sorry, you are mistaken here, US citizens can own 100% of the company due to an agreement with the US.

[SOTIRIOS]

.why do anything yourself when you simply have to pass a law...and seize the fruits of someone else's labors....???

....similar things have happened several times in the past 12 years or so in Thailand....

....resulting in foreigners losing their assets....with no recourse.....

....how welcoming can you get.....

[NCFC]

Well there you go. If this announcement had been made during Yingluk's tenure this forum would be in meltdown. Oh the irony of seeing all you coup apologists (you know who you are) condemning this measure. For goodness sake, the coup and Suthep's actions were partly about Taksin for sure, but it was always about getting the old elite back to the trough, and this measure is just part of that process.

They tried it inn 2007 after the last coup but the international business community in Thailand pushed back. Now the elites and the beurocracy are having another go.

Sure the likes of Toyota and IBM are going to be protected, but it's the smaller foreign companies and guys taking care of their Thai families who are going to take the hit if this measure is ever approved. Sometimes you have to be careful what you wish for.

[nithisa78]

there will be other loop holes.

[ColdSingha]

sounds to me like they are saying they want zero foreign controlled businesses now (unless meet BOI conditions)

however foreigners are welcome to invest in thai controlled businesses

all thai companies currently controlled by foreigners both big and small will have to relinquish control to their majority thai partners

have i got this right?

Fair summary I'd say (and thanks for suggestion of the cold singha... needed that)

Maybe the smaller companies are of little concern to them economically. Sure I can cite a long list of reasons why these small organisations stimulate growth but does it make a big enough impact on the bottom line? I'd guess not.

Also, maybe they have plans to revise said BOI conditions but somehow I doubt that.

i wonder if this is a response to Thaksin's sale of Shin Corp and an effort to reverse the process:

http://en.m.wikipedia.org/wiki/Sale_of_Shin_Corporation_to_Temasek_Holdings

[carib102]

I don't understand what everyone is so worked up about. After your Thai monkey steals your "bag" you will have plenty of options. Chances are a kindly Thai lady will find you and bring you to a place where you can sleep for free in a 3x3 meter room with mosquito's swarming around you, you can arb nam with a bucket shower, you'll learn Buddhist principles and teach English to wayward children. Your lady will not be beautiful...instead she will be na rak...keeping with Thainess of course, since beautiful is a Western concept. At the end of everything it is still possible that you will recover your "bag" from the Thai monkey...and which point your na rak Thai girl will introduce you to another aspect of Thainess as she takes you back to the village to buy motocy's, trucks, tractors, land and a house...and the cycle can begin all over Just remember mai bpen rai!

Edited November 20, 2014 by carib102

[Taco]

The first thing that would happen with the implementation of law like this would be a collapse of real estate prices in all tourist related areas.=Bad for Thais

Second, a flushing out of some of the most creative businesses in the kingdom.=Bad for Thais

Third, a massive movement of farang owned business and their money to Cambodia due to ease of visas, regulation, inexpensive staff. =Bad for Thais.

I could go on and on about this but, what Thai would listen until its to late to reverse the flow?

Kitung farang... pai nai?

[HUAHIN62]

So the traditional elites needs to protect their businesses against the foreign threat. Unfortunately this will only be the beginning of "reforms" that will tank the economy. In 5 to 10 years when an elected party come to power they will be faced with an economy thats been run down and with B 4 to B 5 tn in additional debt. These elites are busy pulling off the biggest heist Thailand have ever seen. They have already pushed through the oil blocks and the mega projects, earning themselves billions. The promises of transparency was hollow as was the reason for the coup. What is most concerning is the lack of action by western nations. If the freedom of speech was limited in say a country like Russia as they are limited here how many sanctions would have been imposed?

[Time Traveller]

When will these ungrateful foreigners learn? Thai people don't need democracy or jobs.

[djhotsox]

Why do I get the feeling that while all the other South East Asian Nations are taking two steps forward, Thailand is taking one (giant) step backwards?

[soalbundy]

So the traditional elites needs to protect their businesses against the foreign threat. Unfortunately this will only be the beginning of "reforms" that will tank the economy. In 5 to 10 years when an elected party come to power they will be faced with an economy thats been run down and with B 4 to B 5 tn in additional debt. These elites are busy pulling off the biggest heist Thailand have ever seen. They have already pushed through the oil blocks and the mega projects, earning themselves billions. The promises of transparency was hollow as was the reason for the coup. What is most concerning is the lack of action by western nations. If the freedom of speech was limited in say a country like Russia as they are limited here how many sanctions would have been imposed?

that's because the international community takes Russia seriously,whereas Thailand.........most people don't even know what street it's on

Edited November 20, 2014 by soalbundy

[skippy]

I have no issues with locals owning my assets.

[CapFarmer]

All part of Thailand's plan to become a major financial hub.

[KamalaRider]

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.

Are you trying to be funny or do you really mean what you say?

In the western world, we have 15 year old computer geeks more educated in IT than 25 year olds with a university degree in IT.

I have worked with around 30 "programmers" here in Thailand during my eight years here and none comes even close to compete with programming skills or creativity to solve normal everyday programming problems with a farang.

Thai culture puts a halt on creative thinking as no one wants to stand out in the crowd.

Thais can't even understand and learn from English written computer literature as their language skills are too poor.

For those few Thais that can, they themselves, flees Thailand and ends up in another country who pays more, don't have illiterate bosses etc.

Edited November 20, 2014 by KamalaRider

[ChrisY1]

ASEAN is coming in a couple of months time........and it's obvious, that some of the well known business people have got into these Commerce peoples heads, and are scared what's going to happen. I say scared.....I should say "don't have a clue".......

Tightening these rules will see investments going elsewhere.........but to the Thais......it appears they don't care.

Stupid business sense!

[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

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

If you read the post again I think you will find that our peptidebomber is being sarcastic and actually means the exact opposite. Dread the thought that anyone should have anything complimentary to say about the Thais and Thailand on Thai visa.

[Thai at Heart]

At last this article makes one thing clear:

Using preferred shares for controlling a business is not illegal (yet).

As for the proposed changes, I think they are a very very very bad idea.

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

They are taking the piss - this makes it sound as if foreigners were allowed to own a majority share in farms, rubber plantations, furniture factories, car repair shops ...

Infuriating, in fact.

The ridiculous thing is that families use this structure all throughout Thai business to retain their managerial control of rhr company along with raising capital. It is fundamental to the way the Asians run their business.

So itis absolutely racist in its implementation if they change this law.

[BestBitterPhuket]

When local companies are not ready to compete, then the government should do everything to bring in foreign companies in those sectors to facilitate knowledge, skill and technology transfers in order to lift the local sector in the LONG term. The Thai policy is the opposite. The stupidity is tragic. Only short term solutions and personal greed serve as the platform. All the empty talk about reform, and then the new government serves anti-reforms of the worst kind.

[davo2003]

I spent 6 yrs vacationing in Thailand, then finally arrived recently to check on semi-retirement and part time business possibilities. Am now in the Philippines. $10,000 USD in a Philippine bank, 1,000 USD proof monthly income, no 90 day check ins or annual check ins and practically everyone speaks English. Of course there is a down side. The ratio of women to men is so high I remain perpetually tired. I love Thailand but the strict requirements make it too difficult to invest or retire for me. I will visit though since there are indeed plenty of things to admire there. Cheers.