Restrictions on foreign companies will not take place

Much to the relief of foreign companies, the Foreign Business Act (FBA) remains unchanged. Prime Minister Prayut Chan-o-cha announced this yesterday at a lunch meeting of the Joint Foreign Chambers of Commerce. "At this point, we're not touching the FBA. Possible future changes will only be improvements," he said.

And with that, a lot of the cold is out of the air, which the Department of Commerce brought in at the beginning of November by announcing the plan to close 'loopholes'. Although the law requires a company to be more than 50 percent Thai-owned for it to be considered a domestic company, the law does not prohibit the majority of the board of directors to be foreigners. Nor does the law prohibit the ownership of shares with different voting rights. This means that a company can actually be foreign owned.

The plan (or was it a trial balloon?), which would have been prompted by the Thai business community, immediately provoked scorn.

“If the government seriously considers amending the foreign company law to restrict foreign ownership, all hell will break loose for both current investors and those considering investing in the country. This has serious consequences for the investment climate and the economy in general,” warned David Lyman, former chairman and founder of the Joint Foreign Chambers of Commerce.

Last week, Minister Chatchai Sarikulya (Trade) had already tried to calm the unrest. He said changes to the law are mainly aimed at promoting investment, simplifying procedures and facilitating trade and investment.

Most of the XNUMX attendees at lunch yesterday responded positively to Prayut's pledge, although some believe the government is leaving many questions unanswered. Which questions those are, the article does not mention.

(Source: Bangkok Post, Dec. 4, 2014)

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