English Translation of Proposed Amendments to the Thai Foreign Business Act Available to Public

The 2014 draft amendments to the Thai Foreign Business Law currently being debated have been published in English by ThaiLawForum for public scrutiny.

If the draft amendments remain unchanged before potentially being passed into law, it would impose restrictions against joint-venture companies in Thailand from being majority controlled by foreigners.

Register a business in Thailand with the experienced corporate attorneys at Chaninat and Leeds.

The Thai Commerce Ministry affirmed the amendments are being proposed to protect the interests of Thai businesses from foreign domination, though opponents of the proposal say it merely serves to suppress competition.

The Thai Ministry of Commerce is discussing and evaluating the proposed amendments and its potential impacts on businesses in Thailand. To date, a finalized version has not been announced and changes could still be made to the latest copy currently available.

Read the English translation of the Thailand Foreign Business Law draft amendments.

Related Articles:
Foreign Business Act Amendments Worry Foreign Businesses in Thailand
Foreigners Can Own More Types of Businesses in Thailand

56 Phuket Firms Suspected Of Breaching FBA

56 companies operating in Phuket are believed to be contravening the Foreign Business Act by having Thais acting as nominees so that foreigners can hold majority control.

In addition, among the 56 Phuket companies, 24 firms were only incorporated this year and are not yet properly operating, 13 conduct a business listed in Annex III of the FBA, eight refused to co-operate with the investigation, and three companies failed to respond when contacted by the authorities. It is thought most have Russian investment.

Thailand attorneys explain that the use of "nominee" shareholders is expressly forbidden by the Foreign Business Act 1999. It is a criminal often with significant penalties including fines and imprisonment. Prior to the introduction of the revised act of 1999 it was common to utilize loan-pledge agreements as a method for foreign minority shareholders to control majority Thai shareholders.  This entails the Thai shareholders borrowing funds from the foreigner and “pledging” the shares back as security. However, the Act of 1999 made this practice illegal. While enforcement of the Thai nominee prohibitions of the Foreign Business Act has been infrequent, the practice is risky particularly if a company has engaged the use of professional nominees whose name appears on multiple company registrations.

Related Documents 

Foreign Business Act 

Related Articles 

The Foreign Business Act and Other Foreign Business Restrictions

Flickr photo credit: Edwin.11