Based on the latest information, the new law is likely to come into effect in October - well before the legislative assembly's term expires with a new election, expected in November or December.

Commerce Minister Krirk-krai Jirapaet is working well with members of the NLA to finalise the legal points of the amendments, with agreement on most issues.

Assuming the amended law comes into force soon, any company registered in Thailand that gives foreign shareholders a majority voting right, regardless of whether the foreigners hold less than 50 per cent of the shares, will be regarded as alien.

Businesses under the Act's Annexe 3 (the least restrictive of the three annexes) could come under the Grandfather Clause and continue if notification is filed with the registrar of the Foreign Business Act.

However, businesses under Annexe 2 will be able to continue for only a limited time before restructuring, moving to a new set-up or ceasing business altogether.

Service businesses listed in Annexe 3 that are governed by specific legislation, such as banking, finance and insurance, will be exempted.

There are a number of alternative solutions for businesses after the new law is enforced.

First, new businesses under Annexe 3 can apply to the Board of Investment for promotion, and under Section 12 of the new Foreign Business Act, they will get an automatic licence.

Second, voting rights must be restructured. Benefits, such as profit-sharing, retrenchment of investment and other matters, can be retained.

Third, agreements among shareholders or joint-

venture partners may be needed to ensure the smooth operation and management of a business, as well as equitable distribution of profits.

Suvarn Valaisathien

Suvarn Valaisathien (suvarnv@ji-net.com) is a lawyer and former deputy commerce minister.