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Scrapping foreign stake limit ‘will boost Thai aviation industry’

Jun 18. 2020
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By The Nation

The move to allow wholly foreign-owned companies to manufacture aircraft and aircraft parts in Thailand will boost foreign investment in the country, said Kobsak Pootrakool, deputy secretary-general to the prime minister for political affairs.

The Cabinet recently approved a draft amendment drawn up by the Civil Aviation Authority of Thailand (CAAT) that will scrap the requirement for aviation-related manufacturers to be at least 51-per-cent Thai-owned.

The amendment is designed to boost investment in aviation manufacturing and related industries in Thailand, while boosting the country’s competitiveness as an aviation hub. The government has targeted aviation as a new so-called S-curve industry under the masterplan to attract foreign investment and technological know-how for development of the Eastern Economic Corridor (EEC) and Thailand as a whole.

"The amendment lifts the restriction that requires the major shareholder to be a Thai aircraft, air navigation company or Thai business, which discouraged foreign companies from investing. … But with the revision of the law, there will be more investment. Thailand will benefit and the benefits will extend from the aviation industry to the automotive industry in the future," said Kobsak.

The amended law prescribes the rules for technology transfer and investment privileges in three aviation industry sectors: production of aircraft, production of major aircraft components, and aircraft maintenance at Type 1 repair units (for aircraft weighing 5,700 kilograms or more).

Foreign businesses granted licences must maintain 80-per-cent Thai staff in their workforce for the full duration of the licence, expected to be 10 years.

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