Thailand’s Ministry of Commerce has identified 22 violators of the Thai Foreign Business Act for holding more than half of the corporate shares when the law limits foreign ownership at a maximum 49 per cent.
Deputy Commerce Minister Nattawut Saikua said today that random checks by the Business Development Department found the 22 companies – 20 in Chonburi and two in Prachuap Khiri Khan – had breached the law by having Thai citizens holding shares in proxy for them.
Mr Nattawut said the 53 Thais and foreigners in the 22 companies are in large- and small-sized real estate businesses, tourism, food and beverages, service and textile businesses.
Seventeen are Thai citizens and 36 others foreigners. Penalties for violating the Foreign Business Act are a maximum three-year jail term or fine between Bt100,000 and Bt1 million, or both.
The Business Development Department has concentrated its inspections in five major tourism provinces – Chonburi, Phrachuap Khiri Khan, Phuket, Surat Thani and Krabi.
Mr Nattawut said the inspections were to ensure fairness for Thai business operators, adding that foreign ownership of more than 50 per cent in a company is allowed as long as the investors inform the Commerce Ministry. (MCOT online news)
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The Foreign Business Act of 1999 (“the Act”), which became effective on March 4, 2000, repealed and replaced the 1972 National Executive Council Announcement 281, better known as the Alien Business Law. The Act provides a definition of “alien” and identifies the scope of foreign participation in business in Thailand.
“Alien” is defined as:
• a natural person who is not of Thai nationality;
• a juristic entity that is not registered in Thailand;
• a juristic entity incorporated in Thailand with foreign ownership accounting for one-half
or more of the total number of shares and/or registered capital;
• a limited partnership or ordinary registered partnership whose managing partner or
manager is a foreigner.
Large Shopping Malls in Bangkok Will Be Closed until July 25th
Shopping malls under the Mall Group, including all branches of The Mall, the Emporium, Emquartier and Paragon Department Store, are also closed for 14 days, from today, except for supermarkets, food courts, pharmacy shops, eateries (take-out and delivery only), banks, mobile phone shops and vaccination sites.
Downside risks loom for Thai economy due to Prolonged COVID-19 Outbreak
The most important issue for the Thai economy at present would be the procurement and distribution of appropriate vaccines adequately and timely.
The Bank of Thailand (BoT) has revealed that Thailand’s economy faces significant downside risks, because a prolonged COVID-19 outbreak could cause the economy to underperform the baseline projection, squeezing business liquidity and slowing employment.(more…)
Subscribe via Email
How the COVID-19 situation may affect Thailand’s export sector
Thailand's export sector could face damage of 200-300 billion baht if the situation cannot be brought under control within six...
Thai baht becoming the region’s worst-hit currency in COVID pandemic
According to data from its tourism ministry as well as the World Bank, Thailand had only a little over 34,000...
Asia’s slow rate of vaccination is a thorn in the region’s economic recovery
Southeast Asia has been hit badly. Daily infections for Indonesia, Thailand, Vietnam are at their worst, on a seven-day moving...
TAT expects 850 billion baht ($25.7 bln) in tourism revenue after successful reopening
The Tourism Authority of Thailand (TAT) has set this year’s revenue target at 850 billion baht, 300 billion of which...
Download 1xBet mobile and play all over the world
Placing profitable bets or playing in a casino is now possible comfortably even without being tied to a computer. It...