All 28 Foreign Chambers of Commerce protest new laws

FOREIGN BUSINESS ACT : 'We could withdraw our investments'
Foreign chambers say amendments to Act need greater consideration

The Joint Foreign Chambers of Commerce in Thailand (JFCCT) yesterday warned the government to suspend changes to the Foreign Business Act for six months to hear comments from them - or they would consider withdrawing investments in the Kingdom. "We cannot estimate how much capital for certain will go from Thailand if the government insists on amending this Act. However, it will not only cause a loss in certain capital, but other forms of benefits that Thailand will definitely lose," said Peter J Van Haren, chairman of the JFCCT.

The 28 foreign chambers in Thailand issued a joint statement yesterday asking the government to delay the plan to seek Cabinet approval for the amended Foreign Business Act. They said that changes to such a significant Act would definitely undermine foreign investor confidence.

The Commerce Ministry is due to propose today that the draft amendment be approved by the interim government.

Under the joint statement, the JFCCT encouraged the government to reflect further - for at least six months - on any potential changes to the Act or other rules governing foreign investment in Thailand. It suggested the government first organise an economic-impact study on any proposed changes.

The chambers said they backed any changes to the Act that promote economic liberalisation and opposed any amendments that take a step backward from the open investment environment in Thailand......

Full article at
http://www.nationmultimedia.com/2007/01 ... 023598.php (http://www.nationmultimedia.com/2007/01/09/business/business_30023598.php)

Thailand to limit foreign stake in firms to 50 per cent

BANGKOK: -- Thai government will limit foreign investors to holding no more than 50 per cent of the shares or the voting rights in companies here under legal changes approved Tuesday, Finance Minister Pridiyathorn Devakula said.

"Foreign investors who altogether hold more than a 50 per cent stake in a company must lower their stake within a year," Pridiyathorn Devakula said after a cabinet meeting. "Foreign investors who hold more than 50 per cent of voting rights must also reduce their voting rights within two years,"he added.

The 50-per cent cap will only apply to companies that deal with areas considered important to national security, or that have an impact on natural resources or Thai culture, he said.

The cabinet approved the changes to the Foreign Business Act "in principle" on Tuesday. Surayud said the government's top panel of legal advisers would continue to work on the details of the law to ensure precision and transparency.

"The Council of State is authorized to work on the details to make the law precise and transparent, without any need to be resubmitted for cabinet approval again," he told reporters. "It will take some time for the law to take effect," he added.

The Cabinet approved Tuesday the foreign business law amended by the Commerce Ministry. The amended act would include the requirement on the voting rights of the board members and increase the penalty for violators. Netpreeya Chumchaiyo, deputy government spokesman, said after the Cabinet meeting that the Council of State is assigned to review the draft amendments.

Earlier, Joint Foreign Chambers of Commerce warned that the amendment might affect their decisions to do business decision.

Commerce Ministry and Finance Ministry are scheduled to make seperate press conference at 3pm. Earlier Finance Minister Pridiyathorn Devakul vowed to press ahead with legal change that could overhaul the way foreign companies do business here despite warnings of potentially disastrous economic fallout.

Pridiyathorn insisted that foreign companies would not be scared off by the final version of the law, which has not yet been released. Foreign business community in Thailand has urged the government to postpone the changes for at least six months. "Why should we withdraw it? They have not yet seen the details. If they had seen the details, I am sure that they would be happy," Pridiyathorn said.
"Why should we postpone it when we have worked on it for three months. This is Thailand," he added. The minister was speaking after attending the cabinet meeting which will consider the changes.

Pridiyathorn said he had consulted some foreign investors about the changes to the Foreign Business Act and more than half of them had found the new rules acceptable. "I myself will talk with them. I have held talks with many investors but they have not seen all of the details and the commerce minister cannot disclose the bill before the cabinet gives its approval," he said.

"We have a record of welcoming foreign investment. We are not hostile to them. Foreign investors have made Thailand develop and we are certainly still adhering to this policy," he said.

The revised law is expected to redefine shareholder rights and ownership structures for local subsidiaries of international firms. Companies have traditionally set up their operations in Thailand so that the local subsidiaries are nominally owned by Thais but controlled by foreigners.

-- AFP/The Nation 2007-09-09 via www.thaivisa.com (http://www.thaivisa.com)

...."Foreign investors who altogether hold more than a 50 per cent stake in a company must lower their stake within a year," Pridiyathorn Devakula said after a cabinet meeting. "Foreign investors who hold more than 50 per cent of voting rights must also reduce their voting rights within two years,"he added.

Jesus, does this guy ever think things through before he shoots off his mouth?


...."Why should we withdraw it? They have not yet seen the details. If they had seen the details, I am sure that they would be happy," Pridiyathorn said. "Why should we postpone it when we have worked on it for three months. This is Thailand," he added.

I guess not!
Get ready for the Fire Sale.

I wish our countries would mirror image the policy of property ownership of the other countries. If they own here then we should be able to own there. In the US they can own outright any property they want and as much as they want. Just doesn't seem fair.

[Jetsam]

Great everything under Thai management lol, would be good for the exchange rate :cheers:

Thailand revises business rules
By Kate McGeown
BBC News, Bangkok

The Thai government has announced plans to tighten rules regulating foreign businesses - a move analysts say could damage an already shaky economy.
Changes to the Foreign Business Act would see foreign firms being prevented from controlling more than 49% of the voting rights of a Thai business. But the changes will take two years to implement and key sectors, such as retail and banking, will be exempt.

Foreign investors are already nervous after last month's stock market crash.

'Grave concern'
The downturn was sparked by the government's sudden decision to limit the amount of money that could be withdrawn by investors - a plan it then partially rescinded in an effort to bring market levels back up again. September's coup and the New Year's Eve bombings have also raised questions about Thailand's stability for investment. Such a radical change of this law will lead to a further erosion of business confidence
Peter van Haren, Joint Foreign Chambers of Commerce in Thailand

The Joint Foreign Chambers of Commerce in Thailand (JFCCT) said it was "gravely concerned" about the proposed changes to foreign ownership controls.
"Such a radical change of this law will lead to a further erosion of business confidence," said its president Peter van Haren.
Thai stocks fell nearly 3% after the proposals were published.

Different regulations currently apply to different industries but while many businesses already have a 49% ceiling on foreign ownership, in practice foreigners often have overriding control, because the local subsidiary owners are merely nominees with little or no voting rights. By tightening up laws to consider voting rights as one of the key criteria for foreign ownership, many firms may be forced to alter shareholding structures and sell shares to Thai investors to stay within the law.

Exemptions Officials said about 15 publicly listed companies would be affected by the proposals, which have still to be approved by Parliament. But according to the draft proposals, industries such as retail, tourism, banking and insurance - in which foreign firms have substantial interests - would not be affected as they are governed by other laws. This would exclude firms such as Tesco and Carrefour from any impact. One analyst said that his initial impression was that the changes would not be as punitive for foreign investors as first thought.

"First indications are that the revision is somewhat less stringent than initially expected," said HSBC's Frederic Neumann. "The amendment brings the Thai direct investment regime broadly into line with international practice."

Foreign control over Thai businesses has been highlighted by the continuing investigations into the financial dealings of former Prime Minister Thaksin Shinawatra, who was ousted in a coup in September. Investigators are focusing on the Thaksin family's sale of its controlling stake in the telecommunications giant Shin Corp last year. The shares were bought by the Singapore-owned investment firm Temasek - effectively selling the company abroad, albeit partly through Thai subsidiaries. The sale fuelled allegations that Mr Thaksin had abused his power and betrayed national interests.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/b ... 243663.stm (http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/6243663.stm)

Published: 2007/01/09 14:14:01 GMT

[wowpow]

Confusion reigns. I see announcements that only 15 listed companies will be affected and also - in a reverse of previous statements - telephone companies will be exempt.

Whatever the outcome it has been announced at a disastrous time for the Thai economy which benefits hugely from investments from abroad.