Commerce minister puts initiative to amend FBA on back burner
Commerce Minister Chatchai Sarikulya has shelved plans to amend the Foreign Business Act of 1999 until the time is ripe, as Thailand still needs foreign investors to help resuscitate the comatose economy and changing the game rules now could rattle their
Chainarong Chochai, deputy director-general of the Business Development Department, said yesterday that late last month, the department proposed to the minister the indefinite postponement of the amendments as most industries felt that this was not the right time.
The minister agreed, but the three lists of permitted and protected businesses in the FBA’s appendix will be revised to allow more flexibility in conducting business.
Pongpun Gearaviriyapun, director-general of the department, said Chatchai’s decision resulted from consideration of the current state of the Thai economy and the investment climate, and not from pressure by foreign investors on the military regime.
From the investors’ perspective, news about FBA amendments could raise concerns over future business undertakings and investment choices.
While the department will wait for a more appropriate time to amend the FBA, it will proceed with investigating problems pertaining to nominees, where foreigners assign Thai citizens as shareholders to skirt laws limiting foreign ownership.
It will also review which businesses are reserved for locals only, or businesses requiring regular permit renewal.
For this year, the department, the Department of Special Investigation and the Tourism Ministry will work together to plumb the nominee issue in the tourism industry and related businesses, Pongpun said.
The Foreign Business Committee chaired by Chutima Boonyaprapatsorn, the permanent secretary of the ministry, will soon re-evaluate Lists 1, 2 and 3 in the FBA’s appendix. The commercial banking and insurance businesses will likely be removed, as they are already strictly regulated by specific agencies and governed by a special set of laws and regulations.
In the future, foreigners interested in engaging in those businesses will not have to obtain a permit from the Foreign Business Committee. They can seek operating licences from the Bank of Thailand and the Insurance Commission. However, related businesses, such as leasing, in-house (within group of companies) lending and consulting services will still require permits from the committee.
Chatchai had instructed all units of the ministry to amend laws and regulations to bring them up to today’s international standards and practices, so the Business Development Department recommended applying the 49.99-per-cent limit on foreign shareholdings to foreign shareholders’ management authority and voting rights. That unnerved foreign investors in Thailand, who pressured the government to drop the idea as it would serve to restrict business and investment rather than to promote them.
