The Foreign Business Act was a law enacted by the Chuan Leekpai-controlled National Legislative Assembly of Thailand in 1999 that limited foreign ownership of certain Thai industries. Its predecessor was the Alien Business Act of 1972, enacted by a military junta. Industries which must be majority-owned by Thais included the newspaper business, radio stations, television stations, rice farming, animal husbandry, fishing, land trading, mining, wholesaling and retailing, restaurants, and all service businesses. The law criminalized nominees, any Thai who held shares on behalf of a foreigner. Nominees could be fined 100,000 to 1 million baht and face up to 3 years in prison. However, the law did not prohibit foreigners from being the majority in the board of directors and also did not prohibit having different classes of shares with differing voting rights. This loophole allowed thousands of foreign-controlled businesses to operate in Thailand.
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 :
The foreign business community have objected to the draft on the following bases.
A foreigner can engage in business activities that are:
Foreigners must notify the Director-General of the DBD in order to obtain a foreign business certificate.
Thailand is currently bound by several agreements such as the U.S. – Thai Treaty of Amity and Economic Relations of 1833 (the “US-Thai Treaty of Amity”), Thailand – Australia Free Trade Agreement (TAFTA), Japan – Thailand Economic Partnership Agreement (JTEPA), ASEAN Framework Agreement on Services (AFAS), and ASEAN Comprehensive Investment Agreement (ACIA). Only the US-Thai Treaty of Amity allows U.S. nationals and/or companies to hold majority or whole of the shares in companies to engage in business on the same basis as Thai companies but with certain requirements, i.e.:
The Treaty of Amity between the United States and Thailand, however, prevents US nationals/entities from engaging in the following restricted activities:
FBA issues regulations from time to time. It is to exclude certain foreigners’ service business activities, as detailed in Ministerial Regulations.
The Foreign Business Act was a law enacted by the Chuan Leekpai-controlled National Legislative Assembly of Thailand in 1999 that limited foreign ownership of certain Thai industries. Its predecessor was the Alien Business Act of 1972, enacted by a military junta. Industries which must be majority-owned by Thais included the newspaper business, radio stations, television stations, rice farming, animal husbandry, fishing, land trading, mining, wholesaling and retailing, restaurants, and all service businesses. The law criminalized nominees, any Thai who held shares on behalf of a foreigner. Nominees could be fined 100,000 to 1 million baht and face up to 3 years in prison. However, the law did not prohibit foreigners from being the majority in the board of directors and also did not prohibit having different classes of shares with differing voting rights. This loophole allowed thousands of foreign-controlled businesses to operate in Thailand.
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 :
The foreign business community have objected to the draft on the following bases.
A foreigner can engage in business activities that are:
Foreigners must notify the Director-General of the DBD in order to obtain a foreign business certificate.
Thailand is currently bound by several agreements such as the U.S. – Thai Treaty of Amity and Economic Relations of 1833 (the “US-Thai Treaty of Amity”), Thailand – Australia Free Trade Agreement (TAFTA), Japan – Thailand Economic Partnership Agreement (JTEPA), ASEAN Framework Agreement on Services (AFAS), and ASEAN Comprehensive Investment Agreement (ACIA). Only the US-Thai Treaty of Amity allows U.S. nationals and/or companies to hold majority or whole of the shares in companies to engage in business on the same basis as Thai companies but with certain requirements, i.e.:
The Treaty of Amity between the United States and Thailand, however, prevents US nationals/entities from engaging in the following restricted activities:
FBA issues regulations from time to time. It is to exclude certain foreigners’ service business activities, as detailed in Ministerial Regulations.