Thailand to ease foreign business rules, boosting investment appeal
Commerce Ministry to amend Foreign Business Act, gives helping hand to startups
The Commerce Ministry intends to streamline business registration by excluding 10 service businesses from List 3 of the Foreign Business Act. This move aims to boost investment within the nation.
Auramon Supthaweethum, the Director-General of the Department of Business Development (DBD), indicated that the ministry evaluated the service businesses on List 3 to adapt to evolving economic conditions.
List 3 covers areas like various services, retail, wholesale, and some construction, where Thai companies are considered not yet fully competitive. Foreign majority-owned businesses wishing to operate in these List 3 sectors generally require a specific permit, known as a Foreign Business License (FBL), issued by the DBD.
On April 22, the Cabinet sanctioned an urgent amendment to the Foreign Business Act of 1999, aimed at removing business obstacles and enhancing Thai competitiveness. The department is set to review shareholding limits and types of businesses, engaging with pertinent private sector stakeholders.
The review will concentrate on four key areas: activities regulated by specific laws and agencies, those in alignment with government initiatives, services exclusive to affiliated groups, and concession-specific services.
Auramon stated that the proposal is pending Cabinet approval and is anticipated to enhance the investment environment and support foreign business operations.
The 10 service businesses span diverse sectors, including telecom services for operators without their own telecom networks; treasury centre services under the Exchange Control Act; lending services with collateral governed by the Securities and Exchange Law and the Derivatives Act; agents, advisors, or fund managers in futures trading regulated by the Derivatives Act; and agricultural commodities trading in the futures market.
Additionally, the scope includes software development supporting the government’s new S-curve industries initiative; administrative services such as human resources and IT management for affiliated groups; credit guarantee services within affiliates; leasing space for financial services equipment and employee vending machines; and petroleum drilling services.
This move could be great news for startups that rely on funding from both local and foreign investors. But the move, akin to a dual-edged sword, could also lead to reduced Thai ownership as foreign investment increases, reported Bangkok Post.
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