Thai investors can take complete ownership of service businesses in Japan after the recent ratification of the first protocol to amend the Asean-Japan Agreement on Comprehensive Economic Partnership (AJCEP).
Deputy Commerce Minister Weerasak Wangsuphakijkosol said on Thursday that Japan on June 12 ratified the first protocol to amend the AJCEP, which extends the agreement applied since late 2008 to cover trade in services, investment and the movement of citizens, in addition to market access for goods.
The first protocol will become effective on Aug 1 this year.
Mr Weerasak said Japan agreed to open trade in services because Thailand is interested in such businesses and believes they have potential.
The agreement allows more trade in services than Japan previously permitted Thailand under the World Trade Organization and Thailand-Japan Economic Partnership Agreement.
The protocol will let Thai entrepreneurs hold a 100% stake in service businesses such as advertising, restaurants, conferences, touring and tour guides, spas, hotels, catering, medical and dental services, nursing, call centre services, and other activities such as cleaning, laundering, ironing and hairdressing.
The movement of citizens and temporary work permits will be granted to service providers, investors and spouses, including their children, from Asean countries for businesses in the specified groups and categories for up to five years, Mr Weerasak said.
Thailand agreed to open up sectors to Japan such as weather and meteorology, R&D services, interpretation and translation services, and scientific consulting services by scientists and statisticians. Japanese entrepreneurs can hold a 70% stake in such businesses.
Asean members and Japan began talks on the AJCEP in 2005. The agreement took effect three years later, focusing on trade, while talks regarding investment and services were under way. It was Japan's first multilateral free trade agreement.
The first protocol to amend the pact was signed by Japan on Feb 27, 2019 and by Asean members in March and April 2019.