Thailand to ease foreign business ownership rules
Cabinet orders amendments to law seen as overly restrictive and unnecessarily protectionist
The Thai cabinet has agreed in principle to amend the Foreign Business Act to reduce the number of restrictive regulations and make the country more investor-friendly.
The Law Reform Commission had urged updating the 25-year-old law, which it argued was overly protective of Thai business operators and no longer suitable to the changing economic situation.
After approving the recommendation, the cabinet instructed the Ministry of Commerce on Tuesday to draft amendments to remove rules and regulations that hinder the country’s economic development.
This is particularly important for the startup sector, which typically requires new technology and increased investment from foreign sources, according to deputy government spokesman Karom Polpornklang.
The commission, under the Council of State, the government’s legal arm, wants any regulations that hold back the development of future businesses and industries, now seen as a potential key contributors to the country’s gross domestic product (GDP), amended, he said.
The proposal to amend the law has already won the approval of the ministries of Finance, Commerce, Interior and Labour, along with the National Economic and Social Development Council and the Board of Investment, said Mr Karom.
The Ministry of Finance, in particular, has recommended that revisions were critically required in the parts of the law that regulate the types of businesses allowed to be operated by foreigners in Thailand and the proportion of shares required to be held by Thais, he said.
Currently, the maximum percentage of foreign shareholdings in a company registered in Thailand is limited to 49%, while many types of businesses are strictly reserved for Thai citizens only.
The 49% cap has led to numerous cases in which foreigners use Thai nominees to hold shares on their behalf.
As such, the Ministry of Commerce is now responsible for drawing up a more attractive limit, said Mr Karom.
The principle underlying the new rules will no longer be about “protecting” domestic business operators, but instead “supporting” them to enhance their capacity to compete with others, whether owned by Thais or foreigners, said Mr Karom.
Source: https://www.bangkokpost.com/business/general/3008767/thailand-to-ease-foreign-business-ownership-rules
