Commerce Minister Chatchai Sarikulya has approved amendments to the controversial Foreign Business Act (FBA) but insists they involve mainly investment promotion, simplifying business procedures and facilitating trade and investment.
A barber cuts a client’s hair at a shop in Siam Square in Bangkok. Hairdressing is among the service sectors on the protection list for Thai nationals in the Foreign Business Act of 1999. The commerce minister has assured foreign investors that amendments to the FBA will not make Thailand more protectionist and restrictive. PATIPAT JANTHONG
Stanley Kang, chairman of the Joint Foreign Chambers of Commerce in Thailand (JFCCT), said he felt slightly relieved even though the minister did not say directly whether areas of foreign concern had been touched, particularly the definition of "foreign" in relation to voting rights, management control, shareholdings and capital.
"As far as we understand from the government's explanation, it is not likely that it will employ further restrictions, particularly for the 'foreign' definition," he said.
"Thailand has been open for foreign investment for 40 years, and the existing FBA is strict enough. It is not necessary to make any more controls."
Mr Kang said Gen Chatchai also urged foreign investors not to worry about the FBA, as any amendments still needed to go through many processes.
The JFCCT will submit recommendations to the Commerce Ministry by mid-December, but its position will remain unchanged that it will not support any changes to the FBA that make it more restrictive or protectionist.
The European Association for Business and Commerce (EABC) said its position was that liberalisation of trade and services was very important.
"If the government implements the three principles outlined by the minister, that will be the right direction, as the previous position would have restricted foreign businesses and investments," said EABC president Rolf-Dieter Daniel.
"However, we're not yet clear what the minister means or how it will be implemented."
The Commerce Ministry yesterday held a briefing on the FBA review to provide greater clarity and an opportunity for stakeholders to discuss changes.
It was attended by representatives from embassies, foreign chambers of commerce and foreign investors.
Foreign chambers have been lobbying the government, saying any amendments must not make the FBA even more protectionist and restrictive.
They are concerned the government will impose new conditions that would make what some businesses are doing illegal, while big law firms have urged the government to facilitate investment by multinational corporations.
Gen Chatchai said Thailand was undergoing reform to enhance its competitiveness and promote trade and investment.
The reviews of relevant laws are part of this process, and the FBA is being studied by the ministry with a view to enhancing the legislation in accordance with international practice without affecting the investment climate.
The study on amending the FBA, which will be concluded next month, will determine issues that are in accordance with the government's policy regarding foreign investment and could be undertaken by the present government.
The proposal will be submitted for cabinet approval early next year.
Nishikawa Issei, governor of Fukui prefecture in Japan, yesterday held discussions with the Industry Ministry about the FBA, saying Japanese investors were waiting for a clearer plan from the government about whether the Act would be amended.
They have also called on the government to be more flexible regarding work permits for Japanese investors representing small and medium-sized enterprises (SMEs) in Thailand.
The Fukui government recently signed a memorandum of understanding with the Industry Ministry for investment by Japanese SMEs in textiles and garments in Thailand.
They want to use Thailand as their base for producing and exporting to Asean markets.