Foreign investors updated on regulations
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Foreign investors updated on regulations

Nominees remain a thorny issue

Ms Auramon, second from right, helmed a Thai government seminar on Foreign Business Act rules.
Ms Auramon, second from right, helmed a Thai government seminar on Foreign Business Act rules.

The Department of Business Development invited diplomats and representatives of international organisations in Thailand to attend a briefing on foreign investment under the Foreign Business Act (FBA) of 1999.

Auramon Supthaweethum, director-general of the department, said the meeting on Monday was meant to help foreign investors understand the law and ensure they invest in Thailand appropriately without breaking the law.

She said a point of emphasis was using Thais as nominees to operate businesses.

The attendees included the Joint Foreign Chambers of Commerce in Thailand, Japan External Trade Organization, Korea Trade-Investment Promotion Agency, and European Association for Business and Commerce.

The FBA is the main law regulating foreign participation in Thai business operations, which includes procedures to establish a business, types of businesses that are allowed, and procedures for applications for a foreign business licence and certificate.

The department said some foreign investors in Thailand were not complying with legal procedures, such as using Thais as proxy shareholders (nominees) to conceal foreign ownership and conduct business here.

This year the department plans to examine 26,019 nominee cases across four business sectors: tourism and related enterprises, real estate trading, hotels and resorts, and logistics.

These investigations are in six major tourist provinces: Chiang Mai, Chon Buri, Surat Thani, Phuket, Bangkok and Prachuap Khiri Khan.

"After an initial screening, 460 cases warranted examination of additional evidence," said Ms Auramon.

Recently the department collaborated with partner agencies to conduct on-site inspections in four provinces: Chiang Mai, Phuket, Bangkok and Chon Buri.

They investigated 91 legal entities suspected of having shareholding structures that violated the FBA.

The inspection focused on establishment location, accounting documents and shareholding arrangements, according to the department.

The department is preparing to launch an online service system dubbed e-Foreign Business to assist in applying for permission to operate a business under the FBA, expected to be operational in July 2024.

The agency is also amending the list of restricted businesses for foreigners (List Three) on an annual basis.

Ten service businesses are categorised as enterprises in which Thai nationals are competent to compete with foreigners.

Thus, these service businesses are no longer subject to the licensing requirements under the FBA, and a foreign business licence is not required prior to conducting business.

Ministerial regulations are being enacted to specifically exclude the 10 service businesses from List Three, before being submitted to the commerce minister and cabinet for approval, noted the department.

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