Travel agency suspected of breaching FBA with nominee

– Thailand news selected by Gazette editors for Phuket’s international community

PHUKET: A Bangkok travel firm is suspected of breaching the Foreign Business Act by having a Thai nominee to hold a majority share in the company, according to the Business Development Department.

Pongpun Gearaviriyapun, director-general of the department, said the tour agency was suspected of having Chinese principals, while employing a Thai to hold a majority share to get around the law.

She said that in cooperation with the Department of Special Investigation, her agency investigated 15 suspect firms, one of which is highly likely to have breached the FBA. Pongpun’s department is preparing to file that case with the DSI for a more in-depth probe.

The Business Development Department has asked the company’s shareholders to speak to the agency’s legal officers. The department will also be questioning the company’s directors and examining their documentation. If any have committed offences, their cases will be forwarded to state agencies for prosecution.

If found to be breaching the FBA, foreigners and Thai nominees could be subject to fines of Bt100,000 to Bt1 million and/or three years in prison.

In cooperation with the Tourism Ministry, the Commerce Ministry’s Business Development Department this year is closely scrutinising the travel industry, and not just in Bangkok. It is also concentrating on Pattaya, Phuket, Hua Hin and Chiang Mai.

Although it is stringently overseeing companies’ share structure, the department will relax some regulations, unlocking some businesses such as banking and insurance from the FBA’s Annex III.

Under the Foreign Business Act of 1999, Thailand does not allow foreign interests to hold more than 50 per cent of some types of businesses, such as telecommunications, rice milling, property development, media and tourism services. However, some foreigners have used Thai nationals as nominees to run such businesses.

The businesses listed in Appendix III of the FBA cover those in which Thais are not yet ready to compete with foreigners. Businesses protected for Thais include those in the retail and wholesale sectors.

— Phuket Gazette Editors