Commerce Ministry to amend Foreign Business Act
The Commerce Ministry's Foreign Business Act Committee will amend Annex III of the act, in order to clarify whether the services sector will be open to foreign enterprises.
Committee chairman Pramon Sutivong yesterday said the law would be changed to give a clearer definition of "nominees", as well as a clearer picture of which businesses were off limits to foreign companies and which were open to them. By making terms and the law more precise, foreign investors would find it easier to make decisions. The panel would not review the first and second categories, since they involve national security and the environment. Telecommunications would be included in Annex III's list of reserved industries. The committee would study all comments by the end of the month and forward the final draft to the ministry to seek Cabinet approval. Pramon said the concentration on the services sector in Annex III and on telecommunications followed the controversial use of Kularb Kaew as a nominee in the purchase by Singapore's Temasek of Shin Corp. He said the clearer classifications of business types in Annex III should boost foreign investors' confidence in conducting business here and prevent future problems from ambiguous classifications. It was reported that the committee had sought to identify "nominees" through both shareholding and voting rights. Sakol Harnseubsai, secretary to the commerce minister, said the current law focused only on shareholding ratios, defining any company with 50 per cent of its total shares held by foreigners as a foreign company. The law focuses solely on the number of shares held by foreigners regardless of their voting rights. It ignores the voting rights of holders of preferred shares, which allow foreigners to have priority rights over local shareholders. Under the proposed amendment, the ministry would consider both shareholding ratios and voting rights in determining whether a Thai company was actually a foreign company. The law would also stiffen penalties in terms of imprisonment and fines. Sakol said the amended law would prompt 16 companies besides Kularb Kaew to remedy their shareholding structures and follow other conditions, in order to avoid being designated a foreign company. One of the 16 firms is United Communication Industry, which is now owned by Norway's Telenor.
Petchanet Pratruangkrai, Achara Pongvutitham The Nation
|
