60 days given for proposals to amend Foreign Business Act
UMESH PANDEY
Proposals to amend the Foreign Business Act should be ready in about 60 days, according to Commerce Minister Krirk-krai Jirapaet. Companies that still had problems with their ownership structure under the new rules would be given time to make adjustments as the government did not want to hurt foreign investors, Mr Krirk-krai said on Tuesday night at the Foreign Correspondents Club of Thailand.
The legal refinements are intended make the country more attractive to foreign investors and clear up uncertainties since the acquisition of Shin Corp by Singapore's Temasek Holdings.
Mr Krirk-krai said a panel of academics and business leaders was looking to ''refine'' and ''amend'' laws to clarify the definition of foreign businesses and nominees, create clear limits on ownership, and a definitive list of activities in which overseas investors can and cannot participate.
In any case, he said he wanted to see a stronger balance between liberalisation of the country's economy and accountability to the country.
Foreign investors have been on edge and deals have dried up since government investigations began into the structures used by Temasek to acquire Shin from the family of ousted prime minister Thaksin Shinawatra earlier this year.
Temasek maintains that it directly owns 41.7% of Shin, below the 49% foreign-ownership limit set for telecommunications companies.
Mr Krirk-krai said that once the new legal recommendations are approved, authorities would give various companies time to amend their ownership structures if there were still problems.
''We should give an adjustment period for corporate citizens to avoid them being implicated; this will help foreign investor confidence,'' he said.
''This will allay fears that you may be implicated unfairly. ... I assure you that we will see to it that fairness is done, that justice is done, and it will attract confidence of foreign investors to this country.''
Source: http://www.bangkokpost.com/Business/09Nov2006_biz39.php
This should be interesting
INVESTMENT FOREIGN OWNERSHIP
We've a seminar about Foreign Business Act last month in Phuket and Samui which present by senior officer from the Ministry of Commerce below is a summary from Phuket one which may be useful:
Summary of major content
of “The Foreign Business Act “ seminar,
Oct.23rd’06,Phuket
By:Sirirat@thaiaccounting.com
I.The 3 lists
1.As a foreigner who would like to do business in Thailand ,they check their business in industry with the 3 lists in the Foreign Business Act(FBA),if the business is in list one,they have to joint venture with Thai partner in order to do that business
2,If the business is in list 2,they can apply a license which need approval from the Ministry of MOC,if they get the license,they can do with 100 % shares
3.If their business is in list 3 they can apply a license that need approval from the director general and if they can get approval,they can hold 100% shares
4.If you can not find your business in the 3 lists,it means that you can do that business with 100% foreign share
5.According to the officer list 3 is much easier to apply than list 2 and usually there are 20 of applications a month and about 15 pass the inspection to the board level
II.Nominee issue
According to section 36 of the FBA ,foreigner who use nominee shareholder is subjected to penalty and/or imprisonment
1. He recommended that the company who know that they are using nominees have to restructure the shareholders to be the reliable one,reliable one means they should have enough money to invest to the share amount declared or they should have evident of the source of money they invested
2. Investigation
As there are 500,000.- companies registered with DBD,they will check the nominee matter only if someone complain to DBD with enough evident,most of the case complaint came from fighting between the foreigner and their shareholder or employee
The FBA section is going to investigate one province which is not Phuket next week,result from a complaint that there are almost hundred of companies have the same address of business registration,therefore the team of officer will investigate those companies
He has no schedule yet for investigation in Phuket ,he recommend that one who have nominees structure take action to do it the right way asap. before someone come
As the process of paying penalty or imprisonment will be done after the board of DBD approve to pass the case to police, up to now ,
there were only one case(Shin Corp). that has been passed to the police
III. The new business registration laws
The Thai shareholders under laws# 102/2549 of DBD have to declared their 6 months bank deposit or evident of the source of investment fund,his comment on if the Thai shareholder getting money from loan from someone is that the laws is not prohibit if they can show evident such as.. loan agreement.
IV. Government policy
He explained that as many foreign organization such as chamber of commerce or U.S. ambassador has requested a meeting with the MOC and MOF regarding Nominee issue and the foreign investment,the government policy now is to try to balance between local people and foreigner interest since they realize that Thailand still need foreign investment
Regarding amendment of the laws,his comment is that it will take time as the current one took 6 years to be revised and implement,therefore,we may not see any amendment within the period of the current government.
***************************
Summary of major content
of “The Foreign Business Act “ seminar,
Oct.23rd’06,Phuket
By:Sirirat@thaiaccounting.com
I.The 3 lists
1.As a foreigner who would like to do business in Thailand ,they check their business in industry with the 3 lists in the Foreign Business Act(FBA),if the business is in list one,they have to joint venture with Thai partner in order to do that business
2,If the business is in list 2,they can apply a license which need approval from the Ministry of MOC,if they get the license,they can do with 100 % shares
3.If their business is in list 3 they can apply a license that need approval from the director general and if they can get approval,they can hold 100% shares
4.If you can not find your business in the 3 lists,it means that you can do that business with 100% foreign share
5.According to the officer list 3 is much easier to apply than list 2 and usually there are 20 of applications a month and about 15 pass the inspection to the board level
II.Nominee issue
According to section 36 of the FBA ,foreigner who use nominee shareholder is subjected to penalty and/or imprisonment
1. He recommended that the company who know that they are using nominees have to restructure the shareholders to be the reliable one,reliable one means they should have enough money to invest to the share amount declared or they should have evident of the source of money they invested
2. Investigation
As there are 500,000.- companies registered with DBD,they will check the nominee matter only if someone complain to DBD with enough evident,most of the case complaint came from fighting between the foreigner and their shareholder or employee
The FBA section is going to investigate one province which is not Phuket next week,result from a complaint that there are almost hundred of companies have the same address of business registration,therefore the team of officer will investigate those companies
He has no schedule yet for investigation in Phuket ,he recommend that one who have nominees structure take action to do it the right way asap. before someone come
As the process of paying penalty or imprisonment will be done after the board of DBD approve to pass the case to police, up to now ,
there were only one case(Shin Corp). that has been passed to the police
III. The new business registration laws
The Thai shareholders under laws# 102/2549 of DBD have to declared their 6 months bank deposit or evident of the source of investment fund,his comment on if the Thai shareholder getting money from loan from someone is that the laws is not prohibit if they can show evident such as.. loan agreement.
IV. Government policy
He explained that as many foreign organization such as chamber of commerce or U.S. ambassador has requested a meeting with the MOC and MOF regarding Nominee issue and the foreign investment,the government policy now is to try to balance between local people and foreigner interest since they realize that Thailand still need foreign investment
Regarding amendment of the laws,his comment is that it will take time as the current one took 6 years to be revised and implement,therefore,we may not see any amendment within the period of the current government.
***************************