The New Draft Foreign Business Act
The first draft was issued by the Thai Ministry of Commerce in December 2006. A second draft was done in March and the third and final draft was approved by the cabinet in April 2007. The main points of contention are :
- 1. The draft proposes to extend the definition of alien (foreign individuals or companies) as being that any company where foreigners hold half or a majority of the voting rights would be classified as alien and thereby restricted from participation in businesses regulated under the Foreign Business Act.
- 2. limited grandfathering is included. All foreign owned companies as under the new definition and that have been operating for a year have to apply to the Ministry of Commerce for a certificate with a year. Once the certificate has been issued they have to adjust their shareholding or voting profile to conform to the new definition of the act within 3 years. This would exclude most service businesses.
- 3. 100% foreign ownership was allowed for retail and wholesale businesses under the Foreign Business Act with the condition that 100 million Baht capital was fully paid or 20 million Baht per shop. That has now been abolished under the new Foreign Business Act.
Read more about this topic: Foreign Business Act Of 1999 (Thailand)
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