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Published on March 8, 2008

"Amendments to the FBA in the past year have not affected foreign investor confidence. Government statistics show progressive arrivals of foreign investors each year," Kanissorn Navanugraha, director-general of the Business Development Department, said yesterday.

The department said registration of foreign investors had remained steady since 1999, averaging 20-30 companies a month.

The Board of Investment has also reported that foreign investment jumped by more than 50 per cent to Bt505.6 billion last year.

Only a few businesses in the service sector were troubled by the stringent regulations as the sector is protected under the act, Kanissorn said.

The government had tried to simplify procedures so more foreign companies could enter the service sector, he said.

Deputy Commerce Minister Banyin Tangpakorn, assigned to supervise the department, said the ministry would soon revise the act to make it more investor-friendly.

The Joint Foreign Chambers of Commerce of Thailand on Thursday called for the government to provide clearer investment conditions.

The ministry plans to relax the definition of "foreigner" under the FBA and will likely loosen the previous conditions, which were extended to cover control over voting rights and management by foreign investors, Banyin said.

Also, it would eliminate some businesses from the act's protection to allow more foreign investors.

"Obviously, this government has a clear policy to facilitate investors, as can be seen from the cancellation of the 30-per-cent reserve requirement on capital inflows. The ministry will proceed to provide more flexible conditions to draw more foreign investors here," Banyin said.

The ministry will also compare the act's conditions with those in other countries, particularly Vietnam, which has succeeded in attracting foreign investors in recent years.

So far, the department is considering liberalising 22 types of service businesses listed in the act's Annex III, which are reserved for Thais only.

A study of the protected businesses by Thammasat University will be completed in August. Businesses being studied by the department include brokerage, internal trade in agricultural goods, advertising, hotels, beverage and food retailing, computer service, warehouse control service, group consulting, pawnshops, schools and entertainment.

Petchanet Pratruangkrai

The Nation