Foreign businesses have repeated their call for the government to allow foreign ownership of Thai businesses to exceed 49%, saying it will help tackle the controversial nominee issue.
Stanley Kang, chairman of the Joint Foreign Chambers of Commerce in Thailand, said the most pressing issue for foreign businesses is the limit on foreign ownership in certain areas to only 49%.
"If foreign businesses find a good Thai partner, there are no problems, but in the event that foreign businesses can't find a good partner, they need to rely on local nominees to operate their business in Thailand," Mr Kang said. "This grey area will continue to grow as long as foreign businesses are not allowed under Thailand's Foreign Business Act (FBA) to take full ownership of their investment here."
He said that while the Thai government is trying hard to lure foreign investment, now is an opportune time to amend the FBA to allow greater foreign ownership, particularly in the service sector.
"We want the FBA to be amended to allow for more foreign shareholders," Mr Kang said. "If the government does nothing, we expect that ongoing efforts to attract foreign investment will be quite tough."
Kalin Sarasin, chairman of the Thai Chamber of Commerce, said that after talks with foreign chambers from nearly 30 countries last Tuesday to discuss the FBA, especially for investment in the Eastern Economic Corridor, foreign businesses also proposed that legislators clearly state the types of service activities on List 3, as well as allow foreigners to freely invest without needing a licence from the Commerce Ministry.
The FBA limits foreign shareholding to 49% of a business and includes three lists of work for which foreign participation may be prohibited or restricted.
Activities in List 1 are designated as "businesses not permitted for foreigners to operate due to special reasons". Foreign companies are completely restricted from engaging in these activities.
Activities in List 2 are designated as "businesses related to national safety or security, or affecting arts and culture, traditional and folk handicraft, or natural resources and environment". Foreign companies may only engage in these activities upon cabinet approval.
Activities in List 3 are designated as "businesses in which Thai nationals are not yet ready to compete with foreigners". Foreign companies must apply for and obtain a foreign business licence before taking part in these activities.
Kulanee Issadisai, director-general of the Business Development Department, said the department is mulling opening some service businesses, particularly those related to the government's targeted industries, to more foreign investment.
Department officials are hearing comments from related agencies such as the Board of Investment, the Industrial Estate Authority of Thailand, the Lawyers Council of Thailand and the Federation of Accounting Professions.
Mrs Kulanee said the review will focus on businesses that have specific laws governing them for which Thai nationals are now ready to compete, as well as businesses related to the targeted S-curve industries now being promoted by the government.