Ministry to clamp down on illegal foreign traders

Ministry to clamp down on illegal foreign traders

The Commerce Ministry is to improve law enforcement to address the issue of nominees of foreign companies infringing on local businesses protected by the Foreign Business Act (FBA).

The move comes in response to complaints from business operators who have felt the pinch from the influx of foreign firms doing business protected by the FBA through their Thai nominees.

Commerce permanent secretary Chutima Bunyapraphasara said there were complaints from operators that in recent years Chinese traders have entered Thailand to operate fruit wholesaling businesses in provinces such as Chanthaburi and Chiang Mai, which produce fruits such as durian and longan.

Foreign fruit traders can do business in Thailand only for sale to export markets but many sell products locally, which is prohibited under the 1999 Foreign Business Act.

In Chanthaburi alone, there are about 100 fruit wholesale operations, called long in Thai, but 60% are owned by foreigners or have Thai people as nominees.

A number of foreigners also operate restaurants without obtaining permission from the Commerce Ministry.

It has prompted the ministry to set out measures to ensure the FBA is enforced effectively.

The Business Development Department has been instructed to outline measures and plans to enable the FBA to cope with changes in global circumstances because some operations no longer need protection.

Ms Chutima said the revisions and measures to protect local businesses should be finalised soon to help fruit growers ahead of the coming harvest season.

Besides the protection, she said Thailand was on course to free up business for foreigners, especially in those sectors where Thai operators are able to compete with foreigners.

She said the ministry have held several public hearings in recent months with operators in sectors that are deemed ready for competition.

Some businesses listed on the annexes for List 3 of the FBA will be considered for removal.

List 3 is a group of businesses in which Thais are deemed not ready to compete with foreigners. Foreigners seeking to engage in List 3 activities are required to apply for and obtain a foreign business licence before beginning operations.

Pongpun Gearaviriyapun, director-general of the Business Development Department, said the government was considering allowing 10-11 sectors to have foreign investment. These include leasing, loan finance, representative offices, regional offices and businesses that operate as partners or under government contracts.

The government earlier agreed to liberalise foreign investment in four businesses: commercial banks, representative offices of foreign banks, life insurance and non-life insurance.

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