Junta to clampdown on foreign businesses

[buksida]

Thailand’s military government is planning to amend the FBA (Foreign Business Act) to prevent foreign directors from controlling joint venture firms that are majority-owned by Thai shareholders.

Currently, foreigners are prohibited to hold more than 49% of the shares in a joint venture for it to qualify as a local company. But the present FBA makes it possible for foreign business partners to control joint ventures in Thailand, as it does not prohibit foreigners from making up the majority of the board of directors.

The arrangement has promoted investments in the country for decades, opening activities to foreign investors that would be otherwise restricted to foreign owned companies.

Mitsugu Saito, minister and deputy chief of mission of the Japan Embassy, said an amendment restricting foreign control over joint-venture companies like the one proposed in 2007 would have a serious impact on existing and future investment.

“The embassy is quite seriously concerned about the draft amendment,” Mr Saito told the Bangkok Post Sunday. “If the law is changed, the ownership of a joint venture has to be a Thai national, and they [the Japanese] will have to decide to give up foreign ownership or withdraw their business from Thailand.”

The American Chamber of Commerce in Thailand on Monday warned in a statement that any protectionist amendments to the current investment laws “will only further damage foreign investor confidence, likely lead to a significant reduction in foreign investment, and harm Thailand’s regional competitiveness.”

“We have been doing business with Thailand for several decades based on mutual trust and mutual friendship, but I am afraid that by changing the basic business environment in Thailand [at] short notice, companies will lose trust in the Thai government and the business environment in Thailand,” Mr Saito said.

Full Story: TBN

Samsung are already choosing Vietnam over Thailand for new factories and investment:
http://www.bangkokpost.com/news/asia/44 ... -expansion

[Big Boy]

Is this going to have a knock-on effect on all of those homes owned as part of a 'pseudo' business?

[buksida]

Possibly, they've been clamping down on foreigners buying property using 'companies' since Thaksin's days so this, if it goes through, will just give them more ammo.

Cambodia anyone?

[migrant]

Is this going to have a knock-on effect on all of those homes owned as part of a 'pseudo' business?

When I read about the law, even though the news focused on big business, I wondered if an underlying focus would be the homeowner structure.

Guess we will have to wait and see

[Farang]

Nothing is going to happen to any single-villa company owner. Except, of course, another round of hysterical whining as per tradition. This lamentation reappears as regularly as the Cleaning of Hua Hin Pier Restaurant Area or the ever-popular Removal of Red-Light District from Vicinity of the Main Temple.

Just another round of hysterics fueled by malice and envy.

[Takiap]

Yes Buksi, I read a similar article yesterday. It seems they are also considering reserving certain businesses only for Thais, including restaurants. Not sure if it will affect expats but the article did specifically mention targeting areas that attract lots of tourists and expats.
'Cant see much changing, at least not straight away.


Also read that Samsung have opted for Vietnam instead for their latest $3 bn project.

[Spitfire]

Read about this too and don't see how this is going to boost investment here....retrograde step really. The report I read said the Japs were getting all jumpy about it (as they have most at stake I guess) and their head of commerce here was saying it will mean many - thousands - giving up practical control of companies or relocating. He said many existing ones may choose to relinquish control but it will be a big negative for future investment as there are other more attractive options available now (e.g. Samsung making that perfectly clear).

Guess it's the stifling old condition of the Thai government's self-preservation paranoia of all things foreign manifesting itself again and pushed them into xenophobic control freakery mode.

Maybe I'm too cynical, but sometimes it's hard to imagine how ideas like this jump through the hoops and make it up the ladder to be seriously considered at the top level for implementation (unless it has a elite political agenda undercurrent to it). Surely it can't be just business/economic considerations as it wouldn't make much sense really as liberalization of markets and red tape/bureaucracy seems to work well for the business environment......not the other way round.

Hmmmmm.....

[JamesWest]

Thailand for Thais! Buffalo go home!

[HHTel]

Nobody has to worry because Farang says:

Nothing is going to happen

and so speaks the authority!!!!!

[Farang]

Finally I get some public recognition!!!!!!!!!

[B6PTW]

I was reading about Japanese companies going to leave Thailand if new business rules come into force, specifically if the 51% Thai part of the company which has no vote on the running of the company is to be given the power to vote and overrule the 49 % of the company Japanese owned.
My question is will this law apply to all companies such as those set up to own land for house building.?

[Name Taken]

I have no idea why any sane person would give up 51+% control of their company just to do business in Thailand.

[buksida]

And so it begins ...

BOI admits a 10% decline in Foreign Investment
Thailand’s Board of Investment (BoI) admits that foreign investment is declining : foreign investment in the first 10 months of this year dropped by 10 per cent compared with the same period last year

Chokedee Kaewsang, BoI deputy secretary-general said foreign investment in the first 10 months of this year dropped by 10 per cent compared with the same period last year because Thailand could not support the investment projects that turned to use higher technologies.

He estimated the overall value of projects seeking BoI promotional privileges at Bt700 billion this year, lower than the corresponding figure last year.

The projects center on the automotive, electrical, electronic and machinery industries.

Kosit Panpiemras, Bangkok Bank executive chairman, said the government’s economic stimulation efforts through monetary and fiscal policies would not bear fruit if it continued to implement populist policies in the way that prevents household debt from falling.

He suggested that the government cooperate with the private sector to catch up with the changes of global markets.

Thai exports are declining despite the global economic expansion.

Mr Kosit urged the government to closely supervise production. Thailand’s economic growth rate is predicted at 3-4 per cent next year due to its low base this year, he said, noting that previous populist policies and household debt continue to heavily affect the Thai economy and prevent its growth from reflecting the real potential of the country.

http://www.thailand-business-news.com/b ... tment.html

[PeteC]

Does one hand know what the other is doing?

Thailand eyes becoming regional trade centre

http://www.nationmultimedia.com/nationa ... 48303.html

[usual suspect]

Did I hear right that Toyota have just invested in a very large site near Yangoon..with the idea of a new plant there rather than increasing production here in Thailand..?
IF this 10% fall increases, would this effect the strength of the Baht against other currencies..??