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Update December 20, 2014


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Update by Natrakorn Paewsoongnern
 
 
 
MAIL BAG  [email protected]
 

Restricting Foreign Ownership: Amendments to the FBA

Dear Editor,
The Thai government has recently announced plans to make Thailand the financial capital of Southeast Asia. This was later followed up with an announcement that the Ministry of Commerce is reviewing whether to further tighten the definition of a foreign owned business in the Foreign Business Act. This set off alarms among many Thai-Foreign joint ventures in Thailand, international bodies, and foreign nations. They feared that the Thai government is attempting to turnover control of these joint ventures to Thai nationals.
The Foreign Business Act of 1999 is an all-encompassing protectionist legislation that restricts foreign business from operating in large segments of the Thai economy including a broadly worded “other service businesses.” Under the Foreign Business Act, foreign investors can bypass the restrictions by creating a joint venture with Thai nationals with the Thai nationals holding a majority shares of the entity. The current reading of this requirement does not prevent foreigners from having majority control of the board of directors or owning superior voting shares. This has allowed foreign investors to keep control of the joint venture even when they owned less than 50% of company.
The Ministry of Commerce is looking at closing the loophole because they believe that allowing foreign nationals to control a Thai company takes advantage of the majority Thai shareholders. The proposed amendments would look at who controls the entity to determine whether an entity is Thai owned or foreign owned. This will affect many joint ventures formed in Thailand where foreign investors have submitted large amounts of capital, technology, and reputation. The Japanese government stated that the change will affect 45% of existing Japanese investments in Thailand.
The Ministry of Commerce’s purpose for amending the Thai Business Act might be reasonable however its actions will have a significant impact on investment in Thailand. While Thailand is the second largest economy in South East Asia, Thailand is still a developing country that needs investment. Thailand is in competition with its neighbors for foreign investment. Indonesia, Vietnam, Malaysia, and Myanmar are liberalizing their economies to attract foreign investment.
For more developed countries such as South Korea and Taiwan, Thailand may face retaliatory measures that prevent Thais from investing and owning businesses abroad. The European Union which is the second largest investor in Thailand has already issued a warning that any further restrictions to foreign ownership rights in Thailand will have detrimental effects on future technology, knowledge, and equity investment in Thailand from Europe.
If Thailand wants to be the financial hub of Southeast Asia, it should open up its business operations and services to foreign ownership to attract foreign investment. The potential amendment to the Foreign Business Act will scare away foreign investment during a period where Thai economy has stagnated. Government economic policies should recognize that Thailand exists in a competitive environment. Countries that border Thailand are opening their doors to foreign investment to raise the standard of living of their people. Thailand should do the same.
Signed,
Robert Virasin.
Legal Manager,
Siam Legal International



Burning season never ends

Dear Editor,
I made the move out to the country for clean air and the peace of the countryside. Well, that has turned out to not be true. My neighbors burn year round, even during the rainy season amazingly. The puyaiban does nothing, the police do nothing. In fact, nobody seems to care or notice that this is a problem.
When is the government’s education campaign going to be seen in the countryside?
Signed
Smoked out in Doi Saket


Christmas decorations already

Dear Editor,
I was stunned to see Christmas decorations going up in the middle of November, a full six weeks before the day. Stunned and rather appalled to be honest. This is far too early for such nonsense in a country that doesn’t even traditionally celebrate the holiday. In fact, it is not even a holiday here so I can only assume the real reason for this is crass commercialism.
It really is a pity that what used to be such a beautiful, family oriented holiday is now just a means to sell more stuff.
I am not normally a Scrooge but the prospect of 6 weeks of endless inane Christmas carols are enough to send me around the bend.
I would have hoped that the malls would see some sense and postpone the decorations and music until after they had finished celebrating a far more important holiday for Thai people; that of HM the King’s birthday and Father’s Day.
So, a call to all retailers; please celebrate Father’s Day first, then you can put up the meaningless Christmas decorations and the inane music.
Signed,
Bah Humbug


Do you know who I am?

Dear Editor,
I was at a government office recently where a man tried to jump the queue actually using the phrase, “Do you know who I am?” I was rather stunned by his behavior since it seemed nobody knew who he was.
However, his belligerent attitude only helped to further delay the officials dealing with his case, thus slowly everything down for everyone who came after him. The office did actually have a queue number system, which this man clearly felt he was too important to use.
I was quite heartened by the Thai response to this arrogant behavior as people refused to be intimidated and politely but firmly informed the man he had to queue.
So, kudos to those officials for standing firm.
Signed,
Queueing too


HEADLINES [click on headline to view story]

Restricting Foreign Ownership: Amendments to the FBA

Burning season never ends

Christmas decorations already

Do you know who I am?

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Note: Letters printed herein in no way reflect the opinions of the editors or writers for Chiang Mai Mail, but are unsolicited letters from our readers, expressing their own opinions. No anonymous letters or those without genuine addresses are printed, and, whilst we do not object to the use of a nom de plume, preference will be given to those signed.
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