The Japanese Cham-ber of Commerce (JCC) will shortly set up a committee to study the impact of the Bank of Thailand's 30-per-cent withholding requirement and the proposed amendments to the Foreign Business Act. JCC president Tetsuji Banno said several Japanese investors had voiced their concerns over the central bank's recent decision to impose the measure on capital inflows.

However, Banno said the requirement was unlikely to affect Japanese investors' decisions in the short and medium term as none of JCC's 1,200 members had expressed an intention to withdraw investment from Thailand. Banno yesterday met with Deputy Industry Minister Piyabutr Cholvijarn and Board of Investment secretary-general Sathit Charnchaokul to address concerns from Japanese investors.

Banno said the new committee would summarise the result of its study next month. Then he will use this information in discussions with the central bank and Commerce Ministry. Although the withholding requirement would affect foreign institutions which approve loans to local companies, Japanese companies here normally seek loans from their parent companies in Japan.

Banno said Japanese investors were confused by the proposed revisions to the Foreign Business Act, even though some issues have been partially clarified by the Commerce Ministry. Japanese investors would like to discuss details of the law with the ministry.

He said that while these legal changes should not affect Japanese investors' decision to invest in Thailand, they did have a psychological impact on investment. He called on the government to relax enforcement of the regulations.

Banno attributed the slowdown of foreign investment to the global economy rather than changes in the law. He said the government should in future introduce new regulations to attract foreign investment.

Chalida  Ekvitthayavechnukul

The Nation