The Thai government has approved plans to tighten rules regulating foreign businesses - a move analysts say could damage an already shaky economy.
The Cabinet has agreed "in principle" to changes in the Foreign Business Act, said spokeswoman Netpreeya Chumchaiyo.
Few details have yet emerged, but there are fears the plans could force foreign firms to reduce their Thai holdings.
The Joint Foreign Chambers of Commerce in Thailand (JFCCT) has already said it is "gravely concerned" about the plans.
Foreign investors in Thailand are already nervous, after last month's stock market crash.
The downturn was sparked by the government's sudden decision to limit the amount of money that could be withdrawn by investors - a plan that was then partially rescinded in an effort to bring market levels back up again.
The coup and the New Year's Eve bombings have also raised questions about Thailand's stability for investment.
Loopholes
The exact details of the new proposals have yet to be spelt out, but they are expected to include rules limiting foreign ownership in Thai businesses to about 50%, while redefining voting rights for local subsidiaries.
Different regulations currently apply to different industry sectors, but at the moment, 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 companies may be forced to alter their shareholding structures and sell shares to Thai investors in order to stay within the law.
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
Large investors such as supermarket chains Tesco and Carrefour could be among those firms affected, according to stock market analysts.
Last week Commerce Minister Krikkrai Jirapaet said that if the new rules were passed, companies would be given time to adjust their share structures.
But JFCCT President Peter van Haren said: "Such a radical change of this law, of the Foreign Business Act, will lead to a further erosion of business confidence."
"What we want is for the government to delay the endorsement of the law for six months, and then go to the beginning by talking with us and taking that consultation into consideration," he told the French news agency AFP.
Foreign control
The use of local nominees to enable foreigners to have overall control over businesses in Thailand has been highlighted by the ongoing 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, and was one of main reasons for the protests which ultimately led to his removal from office.
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