Department to announce six new inspection guidelines
The Business Development Department will next month announce six new guidelines for inspecting 27,000 companies in Thailand that are at risk of breaching the Foreign Business Act.
The department aims to prevent foreigners, and nominees for offshore entities, operating businesses where that is forbidden under the FBA.
Director-general Banyong Lim-prayoonwongse said yesterday that his department would soon announce clearer guidelines for inspecting firms that have foreign shareholders.
“The Asean Eco-nomic Com-munity and high competition in the seamless market will encourage free flow of investment and raise foreign capital in Thailand and the region. The government needs to set clear-cut measures to prevent foreign firms from breaching Thai laws and create a better environment for local and foreign investors,” Banyong said.
During its investigation, the department will focus on 27,000 foreign firms out of a total of 32,000 registered companies in which foreigners have shares. Those 27,000 firms will be closely monitored as foreigners hold shares of less than 50 per cent, while the remaining 5,000 firms have already been categorised as foreign as offshore investors hold more than 50 per cent.
Businesses that will be closely inspected are those categorised in Annex I, II, and III of the FBA, which are involved with the country’s security or stability or affect local competitiveness. Included are companies involved in such enterprises as rice farming and land leasing.
The six guidelines will be regarding percentage of shareholding, voting rights, administrative power, source of funds and investment capital, dividend payments, and financial transactions.
Banyong said the guidelines would be adopted by the department’s legal officers and the Department of Special Investigation (DSI) for inspecting businesses that are at high risk of breaching the FBA or have a nominee structure.
If the department finds any firm at risk of a breach under those guidelines, the case will be passed on to the DSI for in-depth investigation.
Meanwhile, to improve the environment for foreign investors, the department will this year remove two types of businesses from Annex III of the FBA. Those are businesses that are involved with trading of commodities in the futures market and securities businesses, which fall under Clauses 13 and 21 of Annex III respectively.
